Location: {{HOTELADDRESS1}}
{{HOTELADDRESS2}}
ID Number: {{IDNUMBER}}
Date:
MICROTEL INN LICENSE AGREEMENT
BETWEEN
MICROTEL INNS AND SUITES FRANCHISING, INC.
AND
{{ENTITYNAMECAPS}}
TABLE OF CONTENTS
PAGE
1. THE LICENSE .......................................................... 1
2. GRANT OF LICENSE ..................................................... 2
3. LICENSEE'S RESPONSIBILITIES .......................................... 2
4. LICENSOR'S RESPONSIBILITIES .......................................... 5
5. PROPRIETARY RIGHTS ................................................... 6
6. RECORDS AND AUDITS ................................................... 7
7. INDEMNITY AND INSURANCE .............................................. 8
8. TRANSFER ............................................................. 9
9. CONDEMNATION AND CASUALTY ............................................ 12
10. TERMINATION .......................................................... 12
11. AGREEMENT IS NON-RENEWABLE ........................................... 15
12. RELATIONSHIP OF PARTIES .............................................. 15
13. MISCELLANEOUS ......................................................... 15
GUARANTY
ATTACHMENT A
ATTACHMENT B
ATTACHMENT C
LICENSE AGREEMENT
License Agreement dated , ("Agreement") between
Microtel Inns & Suites Franchising, Inc., a Georgia corporation ("Licensor")
and {{ENTITYNAMECAPS}}, a {{ENTITYTYPE}} ("you or Licensee"), whose address
is {{ENTITYADDRESS}}.
PARTIES AGREE AS FOLLOWS:
1. The License.
Licensor has been licensed the exclusive right to license a unique concept
and system (hereinafter "Hotel System") relating to the establishment and
operation of economy-budget hotels offering minimal amenities, that are
intended to compete directly with the hotels in each target market, that are
considered "super economy" or "hard budget" hotels within the lodging
industry, and that operate under the name "MICROTEL", "MICROTEL INN",
"MICROTEL INN & SUITES", OR "MICROTEL SUITES" (collectively referred to
herein as "Microtel Hotels"). Microtel Hotels feature modern up-scale
accommodations, and down-sized standard guest rooms or one (1) room suites.
You have independently investigated the risks of the business to be operated
hereunder, including current and potential market conditions, competitive
factors and risks, have read Licensor's "Offering Circular for Prospective
Franchisees", and have made an independent evaluation of all such facts.
Aware of the relevant facts, you desire to enter into this Agreement in order
to obtain a license to use the Hotel System in the operation of a {{BRAND}}
hotel located at {{HOTELADDRESS1}}, {{HOTELADDRESS2}} (the "Hotel").
A. The Hotel. The Hotel comprises all structures, facilities,
appurtenances, furniture, fixtures, equipment, and entry, exit, parking and
other areas from time to time located on the land identified on the plot plan
most recently submitted to and acknowledged by Licensor in anticipation of
the execution of this Agreement, or located on any land from time to time
approved by Licensor for additions, signs or other facilities. The Hotel
currently includes the facilities listed on Attachment A hereto. No change in
the number of approved standard guest rooms or suites (which are hereinafter
referred to collectively as "Guest Rooms") and no other significant change in
the Hotel shall be made without Licensor's approval. Redecoration and minor
structural changes that comply with Licensor's standards and specifications
shall not be considered significant. You represent that you are entitled to
possession of the Hotel during the entire License Term, as defined in
Paragraph 10 hereof, without restrictions that would interfere with any of
your obligations under this Agreement.
B. The Hotel System. The Hotel System is composed of elements, as
designated from time to time by Licensor, designed to identify Microtel
Hotels to the consuming public and/or to contribute to such identification
and its association with quality standards. The Hotel System at present
includes, without limitation, the tradenames, trademarks, and service marks,
"MICROTEL", "MICROTEL INN", "MICROTEL INN & SUITES", "MICROTEL SUITES" and
such other tradenames, trademarks, and service marks as are now designated
(and may hereafter be designated by Licensor in writing) as part of the Hotel
System (hereinafter the "Proprietary Marks"); prototypical architectural
plans, designs, and layouts, including, without limitation, site plan, floor
plan, roof plan, plumbing plan, lobby plan, electrical plan, and landscape
plan; a national "800" number system for reservation referrals (the "MRS"); a
national Microtel directory (the "National Directory"); management and
personnel training, and training programs and materials; management and
operational procedures and techniques as prescribed in the Confidential
Manual (hereinafter the "Manual"); standards and specifications for
construction, equipment, and furnishings, as described in the Manual;
advertising, marketing, and promotional programs; and such other improvements
that Licensor may make from time to time.
2. Grant of License. Licensor hereby grants to you a license (the "License")
to use the Hotel System only at the Hotel, only in connection with the
operation of the Hotel, and only in accordance with this Agreement, beginning
with the date hereof and terminating as provided in Paragraph 10 hereof (the
"License Term"). During the License Term, neither Licensor nor any affiliate
of Licensor nor any franchisee, shall develop or license any Microtel Hotel
within the territorial boundaries as defined in Attachment B hereto (the
"Exclusive Territory"). Your rights to the Exclusive Territory shall
automatically terminate if the Hotel's Quality Assurance Score (defined in
Paragraph 4.C. hereof) falls below 425, or its then-current equivalent, and
you are unable to increase the score to 425 within thirty (30) days of the
inspection, or if this Agreement is otherwise terminated in accordance with
Section 10 hereof. This Agreement does not limit Licensor's right, or the
rights of any parent, subsidiary, division or affiliate of Licensor, to use
or license to others the Hotel System or any part thereof at any location
outside of the Exclusive Territory. Further, Licensor, or its parent,
subsidiary, division or affiliate may conduct any business activity or
license other hospitality concepts under brands other than the Proprietary
Marks outside and within the Exclusive Territory. You acknowledge that
Licensor, its parent, subsidiaries, divisions and affiliates are and may in
the future be engaged in other business activities including activities
related to transient lodging, which may be or may be deemed to be competitive
with the Hotel System; that facilities, programs, services and/or personnel
used in connection with the Hotel System may also be used in connection with
such other business activities of Licensor, its parent, subsidiaries,
divisions or affiliates; and that you are acquiring no rights hereunder other
than the right to use the Hotel System in connection with the Hotel as
specifically defined herein in accordance with the terms of this Agreement.
3. Licensee's Responsibilities.
A. Operational and Other Requirements. During the License Term, you shall:
(1) maintain a high moral and ethical standard and atmosphere at the
Hotel;
(2) maintain the Hotel in a clean, safe and orderly manner and in first
class condition;
(3) provide efficient, courteous, and high-quality service to the
public;
(4) operate the Hotel twenty four (24) hours a day, every day;
(5) strictly comply in all respects with the Hotel System and the
Manual and with all other policies, procedures and requirements of
Licensor which may be from time to time communicated to you;
(6) strictly comply with Licensor's reasonable requirements to use only
reliable sources of supplies for the Hotel including any suppliers
approved by Licensor;
(7) strictly comply with Licensor's requirements as to:
(a) the types of services, products, and amenities that may be
used, promoted or offered at the Hotel;
(b) use of the Proprietary Marks, and display, style and type of
signage;
(c) directory and reservation service listings of the Hotel,
including any computerization thereof;
(d) training of persons to be involved in the operation of the
Hotel, including all expenses incurred by you associated
therewith;
(e) participation in all marketing, reservation service,
advertising, training and operating programs designated by
Licensor as System-wide (or area-wide) programs in the best
interests of hotels using the Hotel System;
(f) maintenance, appearance and condition of the Hotel; and
(g) quality and type of service offered to customers at the Hotel.
(8) use such automated equipment as may be necessary to connect to the
MRS;
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(9) participate in and use the MRS, including any additions,
enhancements, supplements or variants thereof which may be
developed during the term hereof;
(10) adopt improvements or standard changes to the Hotel System as may
be from time to time designated by Licensor, which improvements
are not intended to cause undue hardship;
(11) strictly comply with all governmental requirements including the
filing and maintenance of any required trade name or fictitious
name registrations, pay all taxes, and maintain all governmental
licenses and permits necessary to operate the Hotel in accordance
with the Hotel System;
(12) permit inspection of the Hotel by Licensor's representatives at
any time and give them free lodging for such time as may be
reasonably necessary to complete their inspections;
(13) insure that no part of the Hotel or the Hotel System is used to
further or promote a competing business or other lodging facility,
except as Licensor may approve for those competing businesses or
lodging facilities owned, licensed, operated or otherwise approved
by Licensor or its parent, divisions, subsidiaries and/or
affiliates;
(14) in all respects use your best efforts to reflect credit upon and
create favorable public response to the name "Microtel";
(15) promptly pay to Licensor all amounts due Licensor, its parent,
divisions, subsidiaries and/or affiliates as royalties or fees or
for goods or services purchased by you;
(16) comply with Licensor's requirements concerning confidentiality of
information, and, specifically: treat the Manual and all
supplements and revisions as confidential; use all reasonable
efforts to keep the information confidential; not copy the Manual
in any way, nor make it available to any unauthorized person;
disclose information contained in the Manual only to persons who
must have access to it in connection with their employment with
you; and obtain each such person's agreement in writing to keep
such information confidential; and
(17) conduct your advertising in a dignified manner and conform to the
standards and requirements as Licensor may specify from time to
time in writing; submit samples of all advertising and promotional
materials to Licensor for approval; and discontinue use of any
disapproved material upon receipt of such written notice.
B. Performance of the Work. You agree to perform the construction and
renovation work including, without limitation, the purchase of furniture,
fixtures, and equipment set forth on Attachment C hereto and incorporated
herein by reference (the "Work"). You acknowledge that your agreement to
perform the Work is an essential element of the consideration relied upon by
Licensor in entering into this Agreement. Your failure to perform the Work in
accordance with Licensor's requirements and specifications (including the
progress, milestone, completion and other dates specified in Attachment "C")
shall constitute a material breach of your obligations under this License.
C. Upgrading of the Hotel. Licensor shall review the Quality Assurance
Scores of the Hotel upon each five (5) year anniversary of the opening of the
Hotel. If over the previous five (5) year period, the Hotel has failed to
maintain an average score of four hundred fifty (450) or greater out of a
possible five hundred (500) (or its then-current equivalent), Licensor may
require modernization of the Hotel, softgood rehabilitation (including but
not limited to carpet, drapes, bedspreads) or other upgrading of the Hotel.
If the upgrading requirements contained in this Paragraph 3.C. cause you
undue hardship, you may terminate this Agreement by paying a fee computed
according to Paragraph l0.E.
D. Fees.
(1) For each month (or part of a month) during the License Term, you
shall pay to Licensor
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by the tenth (10th) of the following month:
(a) a royalty fee equal to four percent (4%) of the Gross Room
Revenues of the Hotel during the first twelve (12) month period
following the Opening Date ("Year 1"); five percent (5%) of
Gross Room Revenues during the twelve (12) months period
thereafter ("Year 2"); and six percent (6%) of Gross Room
Revenues thereafter until the expiration or termination of this
License ("Years 3-20");
(b) a "Marketing/Reservation Contribution" of three percent (3%) of
the Gross Revenues during Year 1; two and one half percent
(2.5%) during Year 2; and two percent (2%) in Years 3-20.
Beginning in Year 3, Licensor may, in its sole discretion and
at any time, increase the Marketing or Reservation Contribution
amount above by no more than ten percent (10%) per year;
provided that your Marketing & Reservation Contributions shall
not exceed a maximum of two and one half percent (2.5%). You
hereby acknowledge that each such increase, if any, shall not
be imposed unless Licensor imposes a similar increase on all
licensees operating under the Hotel System according to license
agreements that contain provisions similar to this Paragraph
3(D)(1)(b) that provides for such increased contributions by
licensees; and
(c) an amount equal to any sales, gross receipts, or similar tax
imposed on Licensor and calculated solely on payment required
hereunder, unless the tax is an optional alternative to an
income tax otherwise payable by Licensor.
(2) "Gross Room Revenues" shall mean the gross receipts attributable to
or payable for the rental of guest rooms at the Hotel, including,
without limitation, the net proceeds (after deduction of the
expenses of adjustment and collection) of use and occupancy, or for
business interruption, rent loss, or similar insurance with respect
to the Hotel (provided that insurance proceeds shall be included in
Gross Room Revenues only to the extent actually received). Gross
Room Revenues shall not include gratuities to employees or service
charges levied in lieu of such gratuities, which, in either case,
are payable to employees, or federal, state, and local taxes or
fees collected by you for transmittal to the appropriate taxing
authorities.
(3) All monthly payments required by this Agreement shall be submitted
to Licensor together with all reports required under this
Agreement. Licensor may require that all monthly payments required
under this Agreement shall be made by telegraphic transfer,
automatic debit arrangement, or other means as Licensor may specify
from time to time, to a bank account designated by Licensor. In the
event such arrangements are made, Licensor shall be responsible for
the cost of connection to such service and you shall maintain
sufficient funds in your bank account to pay all such debited
obligations. Any payment or report not actually received by
Licensor on or before such date shall be deemed overdue, or, if an
automatic debit or similar arrangement is utilized and funds are
insufficient to cover your payment obligation, any amounts unpaid
on or before such date shall be deemed overdue. If any payment is
overdue, you shall pay to Licensor, in addition to the amount
overdue, interest on such amount from the day it was due until paid
at one and a half percent (1.5%) per month or the maximum rate
permitted by law, whichever is less. Entitlement to such interest
shall be in addition to any of the remedies Licensor may have.
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(4) A standard initial fee for additional guest rooms equal to the
higher of a) Three Hundred and Fifty Dollars ($350) per room or b)
the then-current per room charge for the Application Fee per
additional room shall be paid by you to Licensor on your submission
of an application to add any Guest Rooms to the Hotel. As a
condition to Licensor granting its approval of such application,
Licensor may require you to upgrade the Hotel, subject to Paragraph
3.C.
(5) Local and regional marketing programs and related activities may be
conducted by you, but only at your expense and subject to
Licensor's requirements. Reasonable charges may be made by Licensor
for optional advertising materials ordered or used by you for such
programs and activities.
(6) Presently Licensor is not connected to any global distribution
systems (e.g, Sabre or Apollo, or other on-line distribution
system), and has no central commission payment program to travel
agents. However, in the event such systems and programs are
implemented, you shall pay all commissions and fees for
reservations you accept through these and any other source, whether
processed through Licensor, Licensor's MRS, third party reservation
systems, or directly to you. You shall also be responsible for any
telephone line charges and the cost of equipment related to the
MRS.
4. Licensor's Responsibilities.
A. Training. During the License Term, Licensor shall continue to specify
and provide required and optional training programs at various locations that
Licensor shall designate. Reasonable charges may be made for required
training materials. Travel, lodging and other expenses incurred by you and
your employees shall be borne by you. If such training is held at your Hotel,
you must provide Licensor's representatives lodging at the Hotel at no cost
to Licensor.
B. Reservation Services. During the License Term, so long as you are in
full compliance with your material obligations hereunder, Licensor shall
afford you access to the MRS.
C. Consultation on Operations, Facilities and Marketing. Licensor shall
provide you with a set of confidential prototypical plans and specifications,
which must be adapted by your architects and engineers. We will review your
site layout and working drawings prepared by your architects, and any other
related plans and specifications. In addition Licensor shall, from time to
time at Licensor's sole discretion, make available to you consultation and
advice in connection with operations, facilities and marketing, including
lists of suppliers for Hotel fixtures, furnishings, signs, and other
equipment. Licensor shall also periodically evaluate the performance of the
Hotel, but in any case at least once each year, by assessing the quality of
the Hotel's facility and services according to certain criteria developed by
Licensor (the "Quality Assurance Score").
D. Use of Marketing/Reservation Contribution. The Marketing/Reservation
Contribution shall be used by Licensor for costs associated with advertising,
promotion, publicity, market research and other marketing programs and
related activities, cost of maintaining and producing a National Directory,
as well as the MRS, services and overhead for individuals directly related to
national and local marketing and reservations. For the purpose of this
Paragraph 4.D., overhead shall be limited to individuals directly related to
the Reservation or Marketing departments such as the Vice President of
Marketing and costs related to the financial management of the fund. Licensor
shall not use any of the funds in the Marketing and Reservation Contributions
to pay for marketing directly related to the sale of franchises. Licensor is
not obligated to expend funds for marketing or reservation services in excess
of the amounts received from licensees using the Hotel System. In the event
excess amounts remain at the end of any taxable year, all expenditures in the
following taxable year(s) shall be made first out of accumulated earnings
from previous years, next out of earnings in the current year, and finally
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from contributions. Marketing and Reservation Contributions shall not be an
asset of Licensor, and an audit of the operation of the Marketing and
Reservation Contributions shall be prepared annually by an independent
certified public accountant selected by Licensor and shall be made available
to you on request. Licensor shall maintain the National Directory, listing
the address and telephone number of all Microtel Hotels.
E. Application of Manual. Licensor shall provide you, on loan, one (1)
copy of the Manual. All hotels operated within the Hotel System shall be
subject to the Manual, as it may from time to time be modified or revised by
Licensor, including limited exceptions which may be made by Licensor based on
local conditions or special circumstances. Each change in the Manual must be
explained in writing to you at least thirty (30) days before it goes into
effect.
F. Other Arrangements for Marketing Etc. Licensor may enter into
arrangements for development, marketing, operations, administrative,
technical and support functions, facilities, programs, services and/or
personnel with any other entity and may use any facilities, programs,
services and/or personnel used in connection with the Hotel System in
connection with any business activities of its parent, subsidiaries,
divisions or affiliates.
G. Inspections/Compliance Assistance. Licensor has the right to inspect
the Hotel at any time, with or without notice to you, to determine if the
Hotel is in compliance with the standards and rules of operation set forth in
the Manual. If the Hotel fails to comply with such standards and rules of
operation, Licensor may, at its option and at your cost, require an action
plan to correct the deficiencies. You shall then take all steps necessary to
correct any deficiencies within the times established by Licensor. Licensor's
approval of an action plan does not waive any rights it has or may have under
this Agreement, nor does it relieve you of any obligations under this
Agreement.
5. Proprietary Rights.
A. Ownership of the Hotel System and Proprietary Marks. You acknowledge
and shall not contest, either directly or indirectly, Licensor's exclusive
license to use the Hotel System and any element(s) or component(s) thereof,
and you acknowledge it is Licensor's right to grant licenses to use all or
any element(s) or component(s) of the Hotel System. You specifically agree
and acknowledge that Licensor is the exclusive licensee of all right, title
and interest in and to the Proprietary Marks together with the goodwill
symbolized thereby. You shall not contest directly or indirectly the validity
or ownership of the marks either during the term of this Agreement or at any
time thereafter. All improvements and additions whenever made to or
associated with the Hotel System by the parties to this Agreement or anyone
else, and all Proprietary Marks, and all goodwill arising from your use of
the Proprietary Marks shall inure to the benefit of and become the property
of Licensor. Upon expiration or termination of this Agreement, no monetary
amount shall be assigned as attributable to any goodwill associated with your
use of the Hotel System or any element(s) or component(s) of the Hotel System
including the name or marks.
B. Trademark Disputes. Licensor shall have the sole right and
responsibility to handle disputes with third parties concerning use of all or
any part of the Hotel System, and you shall, at your reasonable expense,
extend your full cooperation to Licensor in all such matters. All recoveries
made as a result of disputes with third parties regarding use of the Hotel
System or any part thereof shall be for the account of Licensor. Licensor
need not initiate suit against alleged imitators or infringers and may settle
any dispute by grant of a license or otherwise. You shall not initiate any
suit or proceeding against alleged imitators or infringers or any other suit
or proceeding to enforce or protect the Hotel System.
6
C. Protection of Name and Marks. Both parties shall make every effort
consistent with the foregoing to protect and maintain the Proprietary Marks
and their distinguishing characteristics. You agree to execute any documents
deemed necessary by Licensor or its counsel to obtain protection for the
Proprietary Marks or to maintain their continued validity and enforceability.
You agree to use the Proprietary Marks only in connection with the operation
of the Hotel and in the manner authorized by Licensor and you acknowledge
that any unauthorized use thereof shall constitute infringement of Licensor's
rights. You must notify Licensor immediately, in writing, of any infringement
or challenge to your use of the Proprietary Marks or of any unauthorized use
or possible misuse of Proprietary Marks or Licensor's proprietary
information.
6. Records and Audits.
A. Monthly Reports. At least monthly, you shall prepare a statement which
shall include all information concerning Gross Rooms Revenue, other revenues
generated at the Hotel, room occupancy rates, reservation data and other
information required by Licensor that may be useful in connection with
marketing and other functions of Licensor, its parent, subsidiaries,
divisions or affiliates (the "Data"). The Data shall be the property of
Licensor. By the tenth (10th) day of each month, you shall submit to Licensor
a statement setting forth the Data for the previous month and reflecting the
computation of the amounts then due under Paragraph 3.D hereof. The statement
shall be in such form and detail as Licensor may reasonably request from time
to time, and may be used by Licensor for its reasonable purposes. Licensor
shall not willingly or knowingly provide Data on your property as an
inducement to develop other hotel brands in your market area.
B. Preparation and Maintenance of Records. You shall, in a manner and form
satisfactory to, Licensor and utilizing accounting and reporting standards as
reasonably required by Licensor, prepare on a current basis (and preserve for
no less than four (4) years), complete and accurate records concerning Gross
Rooms Revenue and all financial, operating, marketing and other aspects of
the Hotel, and maintain an accounting system which fully and accurately
reflects all financial aspects of the Hotel and its business. Such records
shall include but not be limited to books of account, tax returns,
governmental reports, register tapes, daily reports, and complete quarterly
and annual financial statements (profit and loss statements, balance sheets
and cash flow statements).
C. Audit. Licensor or its designated agents shall have the right at any
time to examine and copy, at its expense, all books, records, and your tax
returns related to the Hotel and, at its option, to have an independent audit
made. If an inspection or audit should reveal that payments have been
understated in any report to Licensor, then you shall immediately pay to
Licensor the amount understated upon demand, in addition to interest from the
date such amount was due until paid, at one and one half percent (1.5%) per
month or the maximum rate permitted by law, whichever is less. In such event,
Licensor shall also have the right to require that all your future financial
statements related to the Hotel be audited at your expense for each fiscal
year by an independent certified public accounting firm selected by you and
approved by Licensor. If an inspection discloses an underpayment to Licensor
of five percent (5%) or more of the total amount that should have been paid
to Licensor during any six (6) month period, you shall, in addition to
repayment of such understated amount, with interest, reimburse Licensor for
any and all costs and expenses incurred in connection with the inspection or
audit (including, without limitation, reasonable accounting and attorneys'
fees). The foregoing remedies shall be in addition to any other remedies
Licensor may have, including, without limitation the remedies for default.
D. Annual Financial Statements. At Licensor's request, you shall submit to
Licensor as soon as available but not later than ninety (90) days after the
end of your fiscal year, complete financial statements for such year. You
shall certify them to be true and correct and to have been prepared in
accordance with generally accepted accounting principles consistently
applied, and any false certification shall be a breach of this
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Agreement. Licensor may also request, from time to time, gross operating
profits percentages and certain operating statistics (i.e. energy and repairs
costs) which you must provide.
7. Indemnity and Insurance.
A. Indemnity. It is understood and agreed that nothing in this Agreement
authorizes either party to make any contract, agreement, warranty or
representation on the other's behalf, or to incur any debt or other
obligation in the other's name, and that neither party shall in any event
assume liability for, or be deemed liable hereunder as a result of, any such
action, or by reason of any act or omission of the other party or any claim
or judgement arising therefrom. You shall indemnify and hold Licensor and its
parent, affiliates, subsidiaries, officers, directors, agents, and employees
harmless against any and all claims arising directly or indirectly from, as a
result of, or in connection with, your operation of the Hotel, including
claims of intentional or negligent conduct by you, and any claims of acts or
omissions by Licensor relating to the operation of the Hotel System (even
though Licensor is not actively involved in the operation or supervision of
the Hotels), as well as the costs, including reasonable attorneys' fees, of
defending against them. You agree that all of the obligations of Licensor
under this Agreement are to you, and no other party is entitled to rely on,
enforce, or obtain relief for breach of such obligations either directly or
indirectly or by subrogation. Licensor shall not indemnify or hold you
harmless against any action or claim by any third party based upon Licensor's
exercise of any of its rights in accordance with the terms of this Agreement.
B. Insurance. During the License Term, you shall comply with all insurance
requirements of any lease or mortgage covering the Hotel, and Licensor's
specifications for insurance as to amount and type of coverage as may be
reasonably specified by Licensor from time to time in writing, and shall in
any event maintain as a minimum the following insurance underwritten by an
insurer approved by Licensor:
(1) employer's liability and workers' compensation insurance as
prescribed by applicable law; and
(2) comprehensive general liability insurance (with products,
completed operations and independent contractors coverage) and
comprehensive automobile liability insurance, all on an occurrence
basis naming Licensor and its then current parent, subsidiaries,
divisions, affiliates and their successors and assigns as
additional insureds and underwritten by an insurer approved by
Licensor, with single-limit coverage for personal and bodily
injury and property damage of at least Five Million Dollars
($5,000,000) for each occurrence. In connection with all
significant construction at the Hotel during the License Term, you
shall cause the general contractor to maintain with an insurer
approved by Licensor comprehensive general liability insurance
(with products, completed operations and independent contractors
coverage) in at least the amount of Five Million Dollars
($5,000,000) for each occurrence with Licensor and its then
current parent, subsidiaries, divisions, affiliates and their
successors and assigns named as additional insureds.
C. Changes in Insurance. Simultaneously herewith, annually hereafter, and
each time a change is made in any insurance or insurance carrier, you shall
furnish to Licensor certificates of insurance including the term and coverage
of the insurance in force, the persons insured, and the fact that the
coverage may not be cancelled, altered or permitted to lapse or expire
without thirty (30) days' advance written notice to Licensor.
8. Transfer.
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A. Transfer by Licensor. Licensor shall have the right to transfer or
assign all or any part of its rights or obligations in this Agreement to any
person or legal entity, and you hereby consent to such transfer.
B. Transfer by Licensee.
(1) You understand and acknowledge that the rights and duties set forth
in this Agreement are personal to you, and that Licensor has
granted this license in reliance on your business skill, financial
capacity, and character, and that of your partners or shareholders.
Accordingly, neither you nor any immediate or remote successor to
any part of your interest in this license, nor any individual,
partnership, corporation, or other legal entity which directly or
indirectly owns any interest in this license or in you shall sell,
assign, transfer, convey, give away, or otherwise encumber any
direct or indirect interest in this License (including any
ownership interest in you), the Hotel, or a substantial portion of
the assets (including building and real estate) of the Hotel
without the prior written consent of Licensor. Licensor's written
consent shall not be required to mortgage the Hotel premises to a
bank or other financial institution, provided that you remain the
mortgagor of the Hotel.
(2) If the transfer is equal to less than a fifty percent (50%) equity
interest in you and does not have the affect of transferring
control (as described in Paragraphs (3) and (4) below), the
transfer shall not require the prior approval of Licensor, provided
that you notify Licensor in writing of such transfer within thirty
(30) days following such transfer.
(3) If a transfer, alone or together with other previous, simultaneous,
or proposed transfers, would have the affect of transferring a
controlling interest in the License, you, the Hotel, or greater
than fifty percent (50%) of the assets (including building and real
estate) of the Hotel, such transfer shall require Licensor's prior
approval, and Licensor may, in its sole discretion, require any or
all of the following as conditions of its approval, which approval
shall not be unreasonably withheld:
(a) all of your accrued monetary obligations to Licensor and its
subsidiaries and affiliates and all other outstanding
obligations related to the Hotel shall have been satisfied and
you are not otherwise in default of such obligations;
(b) the transferee, and all shareholders in the transferee, shall
demonstrate to Licensor's satisfaction that the transferee and
its shareholders or general partners, as appropriate, meet
Licensor's then-current qualifications being applied to new
applicants including, business standards, ability to conduct
the Hotel (as may be evidenced by prior related business
experience or otherwise), and have adequate financial resources
and capital to operate the Hotel;
(c) transferee and the shareholders or general partners in the
transferee shall execute the standard form license agreement
then being offered to new Hotel System licensees (provided,
however, that the royalty fee and the Marketing/Reservation
Contribution shall be the greater of (i) the then-current fees
or (ii) the same as the amount being paid by the transferee on
the date of the transfer, which amount shall thereafter be
adjusted in accordance with the terms of the license agreement
executed) and such other ancillary agreements as Licensor may
require for the Hotel, and the general manager shall complete
the initial training program then in effect for new licensees;
(d) the Hotel shall be upgraded to conform to the then-current
standards and specifications for hotels operating under the
Hotel System if the most recent
9
(e) Quality Assurance Score was below four hundred and fifty (450).
In any event, all deficiencies noted on the most recent
inspection must be remedied by the transferee within ninety
(90) days of such transfer. You shall complete any upgrade
required under this Paragraph 8.B(3)(d) within the time
specified by Licensor;
(e) you shall pay a transfer fee equal to Two Thousand Five Hundred
Dollars ($2,500.00), for a term equal to the balance of the
original term of this Agreement. No fee shall be required for
transfers to the spouse, issue, parent, or sibling of a partner
or shareholder in you, or from one partner or shareholder to
another. If the transferee requests approval of a term greater
than the remaining term of this Agreement, the then-current
standard minimum application fee, prorated according to the
period of time requested which exceeds the original term of
this Agreement, shall be paid to Licensor;
(f) the transferor shall have executed a general release, in a form
satisfactory to Licensor, of any and all claims against
Licensor and its officers, directors, shareholders, and
employees, in their corporate and individual capacities,
including, without limitation, claims arising under federal,
state, and local laws, rules, and ordinances;
(g) the transferee, and all shareholders or general partners in the
transferee, shall enter into a written assignment, in a form
satisfactory to Licensor, assuming and agreeing to discharge
all of your obligations under this Agreement;
(h) you shall remain liable for all obligations to Licensor and its
subsidiaries and affiliates in connection with the Hotel prior
to the effective date of the transfer and shall execute any and
all instruments reasonably requested by Licensor to evidence
such liability.
(4) For the purposes of this Agreement, "control" shall mean the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a person, corporation
or other business entity, whether through the ownership of voting
securities, by contract, or otherwise.
(5) Any purported assignment or transfer, by operation of law or
otherwise, not having the prior written consent of Licensor shall
be null and void and shall constitute a material breach of this
Agreement, for which Licensor may then terminate without
opportunity to cure pursuant to Paragraph 10.C. of this Agreement,
and seek injunctive relief as well as monetary damages.
C. Transfers of the License or Equity Interest in Licensee Upon Death.
Upon the death or mental incompetency of you or a person owning all or any
interest in you, the executor, administrator, or personal representative of
such person shall transfer within three (3) months after such death or mental
incompetency his interest to a third party approved by Licensor. Such
transfers, including, without limitation, transfers by devise or inheritance,
shall be subject to the same conditions as any inter vivos transfer. However,
in the case of transfer by devise or inheritance, if the heirs or
beneficiaries of any such person are unable to meet the conditions in this
Paragraph 8, the personal representative of the deceased shareholder shall
have reasonable time to dispose of the deceased's interest in you, which
disposition shall be subject to all the terms and conditions for transfers
contained in this Agreement. If the interest is not disposed of within nine
(9) months, Licensor may terminate this Agreement.
D. Registration of a Proposed Transfer of Equity Interests. Securities in
you may be offered to the public only with the prior written consent of
Licensor, which consent shall not be unreasonably withheld. All materials
required by federal or state law for the sale of any interest in you shall be
submitted to Licensor for
10
review prior to filing with any government agency; and any materials to be
used and any exempt offering shall be submitted to Licensor for review prior
to their use. No offering by you shall imply (by use of the Proprietary Marks
or otherwise) that Licensor is participating as an underwriter, issuer, or
offcer of you or Licensor's securities; and Licensor's review of any offering
shall be limited solely to the subject of the relationship between you and
Licensor. You and other participants in the offering must fully indemnify
Licensor in connection with the offering. For each proposed offering, you
shall pay to Licensor a non-refundable fee of Five Thousand Dollars
($5,000.00), or such greater amount as is necessary to reimburse Licensor for
its reasonable cost and expenses associated with reviewing the proposed
offering, including, without limitation, legal and accounting fees.
E. Non-Waiver of Claims. Licensor's consent to a transfer of any interest
in the license granted herein shall not constitute a waiver of any claims it
may have against the transferring party, nor shall it be deemed a waiver of
Licensor's right to demand exact compliance with any of the terms of this
Agreement by the transferee.
F. Licensor's Right of First Refusal. If in the event, any party holding
any direct or indirect interest in this Agreement, in you, or in all or
substantially all of the assets of the Hotel desires to accept any bona fide
offer from a third party to purchase such interest, you shall notify Licensor
as provided in Paragraph 13.F. hereof, and shall provide such information and
documentation relating to the offer as Licensor may require. Licensor shall
have the right and option, provided the third party wishes to remove the
Hotel from the Hotel System, exercisable within thirty (30) days after
receipt of such written notification, to send written notice to the seller
that Licensor intends to purchase the seller's interest on the same terms and
conditions offered by the third party. If Licensor elects to purchase the
seller's interest, closing on such purchase shall occur within ninety (90)
days from the date of notice to the seller of the election to purchase by
Franchisor. If Licensor elects not to purchase the seller's interest, any
material change thereafter in the terms of the offer from a third party shall
constitute a new offer subject to the same rights of first refusal by
Licensor as in the case of the third party's initial offer (minor changes to
the offer shall not constitute a new offer and shall be subject to the notice
period of the initial offer). Failure of Licensor to exercise the option
afforded by this Paragraph 8.F. shall not constitute a waiver of any other
provision of this Agreement, including all of the requirements of this
Paragraph 8.F., with respect to a proposed transfer. In the event the
consideration, terms, and/or conditions offered by a third party are such
that Licensor may not reasonably be required to furnish the same
consideration, terms, and/or conditions, then Licensor may purchase the
interest proposed to be sold for the reasonable equivalent in cash. If the
parties cannot agree within thirty (30) days on the reasonable equivalent in
cash of the consideration, terms, and/or conditions offered by the third
party, an independent appraiser shall be designated by Licensor at Licensor's
expense, and the appraiser's determination shall be binding.
G. No Right of First Refusal. In the event that you receive an offer from
a third party to purchase the Hotel and the third party wishes to keep the
Hotel in the Hotel System, Licensor shall have no right of first refusal
provided the third party meets the qualifications set forth in Paragraph 8.
11
9. Condemnation and Casualty.
A. Condemnation. You shall, at the earliest possible time, give Licensor
full notice of any proposed taking of the Hotel by eminent domain. In the
event the Hotel is taken by eminent domain, Licensor shall give due and
prompt consideration, without any obligation, to transferring this Agreement
to a nearby location selected by you and approved by Licensor as promptly as
reasonably possible, and in any event within four (4) months of the taking.
If the new location is approved by Licensor and the transfer authorized by
Licensor, and if you open a new hotel at the new location in accordance with
Licensor's specifications within two (2) years of the closing of the Hotel,
the new hotel shall thenceforth be deemed to be the Hotel licensed under this
Agreement. If a condemnation takes place and a new hotel does not, for
whatever reason, become the Hotel under this Agreement in strict accordance
with this Paragraph 9.A. (or if it is reasonably evident to Licensor that
such shall be the case), this Agreement will terminate forthwith upon notice
thereof by Licensor to you, without the payment of liquidated damages
hereunder.
B. Casualty. If the Hotel is damaged by fire or other casualty, you shall
expeditiously repair the damage. If the damage or repair requires closing the
Hotel, you shall immediately notify Licensor, shall repair or rebuild the
Hotel in accordance with Licensor's standards, shall commence reconstruction
within four (4) months after closing, and shall reopen the Hotel for
continuous business operations as soon as practicable (but in any event
within twenty four (24) months after closing of the Hotel), giving Licensor
ample advance notice of the date of reopening. If the Hotel is not reopened
in accordance with this Paragraph 9.B., this Agreement shall forthwith
terminate upon notice thereof by Licensor to you, with the payment of
liquidated damages calculated in the manner set forth in Paragraph 10.E.
C. No Extensions of Term. Nothing in this Paragraph 9 shall extend the
License Term, but you shall not be required to make any payments pursuant to
Paragraphs 3.D. for periods during which the Hotel is closed by reason of
condemnation or casualty.
10. Termination.
A. Expiration of Term. This Agreement shall expire without notice
effective 20 years from the authorized opening date, subject to earlier
termination as set forth herein. The parties recognize the difficulty of
ascertaining damages to Licensor resulting from premature termination of this
Agreement, and have provided for liquidated damages in Paragraph 10.E. below,
which liquidated damages represent the parties' best estimate as to the
damages arising from the circumstances in which they are provided.
B. Default with Opportunity to Cure.
(1) Except as provided in Paragraphs 10.C. hereof, you shall have
thirty (30) days (unless otherwise specified herein or in the
notice by Licensor) from receipt of written notice of a default
within which to remedy such default. If any such default is not
cured within that time, or such longer period as applicable law may
require (or such longer period as may be reasonably required by you
to cure any non-monetary default if you immediately commence,
diligently and in good faith pursues, and cures such default), this
Agreement shall terminate without further notice to you effective
immediately upon the expiration of the thirty (30) day period,
expiration of any extended period as described above, or such
longer period as applicable law may require. Alternatively,
Licensor may, at its option, suspend your access to the MRS until
such default has been cured to Licensor's satisfaction. You shall
be in default hereunder for any failure to comply with any of the
requirements imposed by this Agreement, as it may from time to
12
time reasonably be supplemented by the Manual, or to carry out the
terms of this Agreement in good faith.
(2) If during the twelve (12) months preceding a notice of default in
(1) above you shall have engaged in a violation of this Agreement
for which a notice of default was given and such default was
remedied, the period given to remedy defaults thereafter shall, if
and to the extent permitted by law, be ten (10) days instead of
thirty (30).
(3) In any judicial proceeding in which the validity of termination is
at issue, Licensor shall not be limited to the reasons set forth in
any notice sent under this Paragraph l0.B.
(4) Licensor's notice of termination or suspension of services as
described in Section l0.B(1) shall not relieve you of your
obligations hereunder.
C. Immediate Termination by Licensor. This Agreement shall immediately
terminate without notice to you if:
(1)(a) you, or any guarantor of your obligations hereunder (a
"Guarantor"), shall generally not pay its debts as they become
due or shall admit in writing its inability to pay its debts,
or shall make a general assignment for the benefit of
creditors; or
(b) you, or any Guarantor, shall commence or consent to any case,
proceeding or other action seeking reorganization, arrangement,
adjustment, liquidation, dissolution or composition of you or
your debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, or seeking appointment of
a receiver, trustee, custodian or other similar official for it
or for all or any substantial part of its property; or
(c) you, or any Guarantor, shall take any corporate or other action
to authorize any of the actions set forth above in Paragraphs
(a) or (b); or
(d) any case, proceeding, or other action against you or any such
guarantor shall be commenced seeking to have an order for
relief entered against it as debtor, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution or
composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of
its property, and such case, proceeding or other action (i)
results in the entry of an order for relief against it which is
not fully stayed within seven (7) business days after the entry
thereof, or (ii) remains undismissed for a period of forty-
five (45) days; or
(e) an attachment remaining on all or a substantial part of the
Hotel or of your or any Guarantor's assets for thirty (30)
days; or
(f) you or any Guarantor fails, within sixty (60) days of the entry
of a final judgment against you in any amount exceeding Fifty
Thousand Dollars ($50,000), to discharge, vacate or reverse the
judgment, or to stay execution of it, or if appealed, to
discharge the judgment within thirty (30) days after a final
adverse decision in the appeal; or
(2) you cease to operate the Hotel at the Location or under the
Proprietary Marks, or lose possession or the right to possession of
all or a significant part of the Hotel, except as otherwise
provided in Paragraph 9 hereof; or
(3) you contest in any court or proceeding Licensor's ownership of the
Hotel System or any part of it, or the validity of any of the
Proprietary Marks; or
(4) a breach of Paragraph 8 hereof occurs; or
13
(5) you fail to continue to identify the Hotel to the public as a
Microtel Hotel; or
(6) any action is taken toward dissolving or liquidating you or any
Guarantor, if it is a corporation or partnership, except for death
of a partner; or
(7) you or any of your principals is, or is discovered to have been,
convicted of a felony (or any other offense if it is likely to
adversely reflect upon or affect the Hotel, the Hotel System, the
Proprietary Marks and the goodwill associated therewith, the
Licensor, the Licensor's parent or your affiliates or subsidiaries
in any way); or
(8) you knowingly maintain false books and records of account or
knowingly submit false reports or information to Licensor; or
(9) you intentionally disclose or divulge the contents of the Manual or
other trade secrets or confidential information provided to you by
Licensor to any unauthorized person or fail to exercise reasonable
care to prevent such disclosure; or
(10) you intentionally or negligently make any material false
statements or omissions to Licensor in connection with your
Application.
D. De-identification of Hotel Upon Termination. You shall take whatever
action is necessary to assure that no use is made of any part of the Hotel
System at or in connection with the Hotel or otherwise after the License Term
ends. This shall involve, among other things, returning to Licensor the
Manual and all other materials proprietary to Licensor, removal of all
distinctive signs, changing the telephone listing and removal of all items
bearing the Proprietary Marks. Further, until all modifications required by
this Paragraph l0.D. are completed, you shall (i) maintain a conspicuous sign
at the registration desk in a form specified by Licensor stating that the
Hotel is no longer associated with the Hotel System, and (ii) advise all
customers or prospective customers telephoning the Hotel that it is no longer
associated with the Hotel System. Anything not done by you within thirty (30)
days after the License Term ends, may be done at your expense by Licensor or
its agents, who may enter upon the premises of the Hotel for that purpose.
E. Payment of Liquidated Damages. If this Agreement terminates pursuant to
Paragraphs 3.C., 9.B., 10.B. or l0.C. above at any time after the first
twenty four (24) months of operation, you shall promptly pay Licensor (in
addition to any amounts then due to Licensor, and only as liquidated damages
for the premature termination of this Agreement, and not as a penalty or as
damages for breaching this Agreement or in lieu of any other payment) a lump
sum based on the average occupancy rate for the twelve (12) months preceding
the termination as follows:
(1) if the occupancy rate was less than fifty percent (50%) then you
shall pay no liquidated damages;
(2) if the occupancy rate was fifty percent (50%) to fifty nine and
nine tenths percent (59.9%) then you shall pay an amount equal to
twelve (12) months of fees required under Paragraph 3.D(l)(a)-(b);
(3) if the occupancy rate was sixty percent (60%) to sixty nine and
nine tenths percent (69.9%) then you shall pay an amount equal to
twenty four (24) months of fees required under Paragraph
3.D(l)(a)-(b);
(4) if the occupancy rate was seventy percent (70%) or greater then you
shall pay an amount equal to thirty six (36) months of fees
required under Paragraph 3.D(l)(a)-(b);
If this Agreement terminates at any time during the first twenty four (24)
months of operation, you shall promptly pay to Licensor liquidated damages
equal to thirty six (36) times the average monthly fees paid under Paragraph
3.D(l)(a)-(b).
11. Agreement is Non-Renewable. This Agreement is non-renewable.
14
12. Relationship of Parties.
A. No Agency Relationship. You are an independent contractor. Neither
party is the legal representative or agent of, or has the power to obligate
(or has the right to direct or supervise the daily affairs of) the other for
any purpose whatsoever. Licensor and you expressly acknowledge that the
relationship intended by them is a business relationship based entirely on,
and defined by, the express provisions of this Agreement and that no
partnership, joint venture, affiliate, agency, fiduciary or employment
relationship is intended or created by reason of this Agreement.
B. Licensee's Notices to Public Concerning Independent Status. You shall
take such steps as are necessary and such steps as Licensor may from time to
time reasonably request to minimize the chance of a claim being made against
Licensor for anything that occurs at the Hotel, or for acts, omissions or
obligations of you or anyone associated or affliated with you or the Hotel.
Such steps may, for example, include giving notice in private rooms, public
rooms and advertisements, on business forms and stationery, and any other
materials, making clear to the public that Licensor is not the owner or
operator of the Hotel and is not accountable for what happens at the Hotel.
Unless required by law, you shall not use the word "Microtel" or any similar
words in your corporate, partnership, or trade name, nor authorize or permit
such use by anyone else. You shall not use the word "Microtel" or any other
name or mark associated with the Hotel System to incur any obligation or
indebtedness on behalf of Licensor.
13. Miscellaneous.
A. Severability and Interpretation. The remedies provided in this
Agreement are not exclusive. In the event any provision of this Agreement is
held to be unenforceable, void or voidable as being contrary to the law or
public policy of the United States or any other jurisdiction entitled to
exercise authority hereunder, all remaining provisions shall nevertheless
continue in full force and effect unless deletion of the provision(s) deemed
unenforceable, void or voidable impairs the consideration for this Agreement
in a manner which frustrates the purpose of the parties or makes performance
commercially impracticable. In the event any provision of this Agreement
requires interpretation, such interpretation shall be based on the reasonable
intention of the parties in the context of this transaction without
interpreting any provision in favor of or against any party hereto by reason
of the drafting of the party or its position relative to the other party. Any
covenant, term or provision of this Agreement which, in order to effect the
intent of the parties, must survive the termination of this Agreement, shall
survive any such termination.
B. Binding Effect. This Agreement shall become valid when executed and
accepted by Licensor at Atlanta, Georgia. It shall be deemed made and entered
into in the state of Georgia and shall be governed and construed under and in
accordance with the laws of the state of Georgia. In entering into this
Agreement, you acknowledge that you have sought, voluntarily accepted, and
become associated with Licensor who is headquartered in Atlanta, Georgia and
that this Agreement contemplates and shall result in business relationships
with Licensor's headquarter's personnel. The choice of law designation
permits, but does not require that all suits concerning this Agreement be
filed in the state of Georgia.
C. Exclusive Benefit. This Agreement is exclusively for the benefit of the
parties hereto and it shall not give rise to liability to a third party,
except as otherwise specifically set forth herein. No agreement between
Licensor and anyone else is for the benefit of you.
D. Entire Agreement. This is the entire Agreement (and supersedes all
previous agreements including without limitation, any commitment agreement
between the parties concerning the Hotel) between the parties
15
relating to the Hotel. Neither Licensor nor any other person on Licensor's
behalf has made any representation to you concerning this Agreement or
relating to the Hotel System, which representation is not fully set forth
herein or in Licensor's "Offering Circular for Prospective Franchisees."
No change in this Agreement shall be valid unless in writing signed by
both parties. No failure to require strict performance or to exercise any
right or remedy hereunder shall preclude requiring strict performance or
exercising any right or remedy in the future.
E. Licensor's Withholding of Consent. Licensor's consent, wherever
required, may be withheld if any default by you exists under this
Agreement. Approvals and consents by Licensor shall not be effective
unless evidenced by a writing duly executed on behalf of Licensor.
F. Notices. Any and all notices required or permitted under this
Agreement shall be in writing and shall be delivered by any means which
shall provide evidence of the date received, to the respective parties at
the following addresses unless and until a different address has been
designated by written notice to the other party:
Notices to LICENSOR: Microtel Inns & Suites Franchising, Inc.,
13 Corporate Square, Suite 250
Atlanta, Georgia 30329
(404) 321-4045
Notices to you: {{ENTITYNAMECAPS}}
{{PCADDRESS1}}
{{PCADDRESS2}}
Attn: {{PCNAME}}
Any notice shall be deemed to have been given at the date and time it
is evidenced to have been received.
G. Descriptive Headings. The descriptive headings in this Agreement are
for convenience only and shall not control or affect the meaning or
construction of any provision in this Agreement.
H. Management of the Hotel. You must at all times retain and exercise
direct management control over the Hotel's business. You shall not enter
into any lease, management agreement or other similar arrangement for the
operation of the Hotel or any part thereof (including without limitation,
food and/or beverage service facilities), with any independent entity
without the prior consent of Licensor.
I. Conversion of other Properties. Due to the unique nature of both the
interior and exterior of Microtel Hotels, it is Licensor's intent not to
accept conversion of other properties in the Hotel System. In the event
that Licensor violates this clause, you may at your option terminate this
Agreement upon notice to Licensor, and in such case you shall not be
required to pay liquidated damages required under Section 10.E hereof if
all fees owing to Licensor and its affiliates are paid in full upon
termination and you perform all post termination obligations specified in
Paragraph 10. Alternatively, in the event that Licensor violates this
clause, you may at your option remain in the Hotel System and cease to pay
royalties required under Section 3.D(l)(a) hereof; however, you shall
still pay the Marketing/Reservation Contribution required under Section
3.D(l)(b) hereof.
J. Guest Room Rates. You acknowledge that the Hotel System is designed
to emphasize a value oriented concept and to compete directly in the true
value lodging segment. However it is your responsibility to establish room
rates for the Hotel. Rates must be submitted to Licensor prior to the
deadline for the upcoming National Directory and you may not charge a rate
in excess of the rate published in the National Directory for a particular
time period.
16
(signatures on the following page)
17
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first stated above.
LICENSEE:
{{ENTITYNAMECAPS}}
By:
By: {{SIGNEENAME}}
By: {{SIGNEETITLE}}
Attest:
Attest: Secretary
LICENSOR:
MICROTEL INNS & SUITES FRANCHISING, INC.,
By:
By: Jon Leven
Vice President Franchise Administration
and Reservations
Attest:
Asst. Secretary
18
GUARANTY
As an inducement to Microtel Inns & Suites Franchising, Inc., ("Licensor")
to execute the above License Agreement, the undersigned, jointly and
severally, hereby unconditionally warrant to Licensor and its successors and
assigns that all of licensee's representations in the License Agreement and
the application submitted by the licensee to obtain the License Agreement are
true and guarantee that all of the licensee's obligations under the above
License Agreement, including any amendments thereto whenever made (the
"Agreement"), shall be punctually paid and performed.
Upon default by the licensee or notice from Licensor, the undersigned
shall immediately make each payment and perform each obligation required of
the licensee under the Agreement. Without affecting the obligations of the
undersigned under this Guaranty, Licensor may without notice to the
undersigned extend, modify or release any indebtedness or obligation of the
licensee, or settle, adjust or compromise any claims against the licensee.
The undersigned waive notice of amendment of the Agreement and notice of
demand for payment or performance by the licensee.
Upon the death of an individual guarantor, the estate of such guarantor
shall be bound by this Guaranty but only for defaults and obligations
hereunder existing at the time of death, and the obligations of the other
guarantors shall continue in full force and effect.
The Guaranty constitutes a guaranty of payment and performance and not of
collection, and each of the guarantors specifically waives any obligation of
Licensor to proceed against the licensee on any money or property held by the
licensee or by any other person or entity as collateral security, by way of
set off or otherwise. The undersigned further agree that this Guaranty shall
continue to be effective or be reinstated as the case may be, if at any time
payment or any of the guaranteed obligations is rescinded or must otherwise
be restored or returned by Licensor upon the insolvency, bankruptcy or
reorganization of the licensee or any of the undersigned, all as though such
payment has not been made.
IN WITNESS WHEREOF, each of the undersigned has signed this Guaranty as of
the date of the above Agreement.
Witnesses: Guarantors:
{{GUARANTOR1}}, Legal Signature
{{GUARANTOR2}}, Legal Signature
19
ATTACHMENT A
THE HOTEL
Facilities (Paragraph 1):
Site--Area and general description: A {{BRAND\w hotel to be located at
{{HOTELADDRESS1}},
{{HOTELADDRESS2}}
Number of approved Guest Rooms: {{ROOMS}}
Number of Suites included: None
Ownership of Licensee (Paragraph 8):
{{ENTITYNAMECAPS}} 100%
20
ATTACHMENT B
EXCLUSIVE TERRITORY
The Exclusive Territory is defined as that area bordered by:
21
ATTACHMENT C
THE WORK
You acknowledge that every detail of the Hotel System is important to
Licensor and other licensees operating under the Hotel System in order to
develop and maintain the standards and public image of the Hotel System. You
agree to comply with the details of the Hotel System as specified by Licensor
in the Manual, or otherwise in writing, and not to deviate therefrom.
Specifically, you acknowledge that the Hotel is intended to offer minimal
amenities and to compete directly with hotels offering the lowest average
room rate in each target market. You therefore agree that it shall offer or
install only those amenities that are approved in advance by Licensor.
The dates below set forth the development schedule for the Hotel.
1) You shall submit preliminary plans, including site layout and outline
specifications adapting Licensor's then-prototypical plans on or before a
date 3 months from the date of this License.
2) You shall submit complete working drawings and specifications for the
Hotel and Hotel premises, including its proposed equipment, furnishings,
facilities and signs with such detail and containing such information as
Licensor may request on or before a date 5 months from the date of this
License.
The Plans as submitted to Licensor shall conform to then prevailing Hotel
System standards, including the construction standards set forth in the
Manual. Construction shall not begin unless and until Licensor has approved
the Plans. Thereafter, no change shall be made to the Plans without the
advance consent of Licensor. Notwithstanding the foregoing, after the Plans
have been approved, if in the course of actual construction any change in the
Plans occurs, you shall notify Licensor promptly. Licensor shall determine
whether construction has been completed in accordance with the Plans.
3) Construction of the Hotel shall commence on or before on or before a date
7 months from the date of this License.
Commencement of construction shall mean excavation and poured footings
with a finished building slab. Once the construction has commenced, it shall
continue uninterrupted (except for interruption by reason of events
constituting force majeure) until construction is completed. You shall,
within five (5) days of the commencement of construction, provide written
notice to Licensor that construction has begun. As used in this License,
"force majeure" means an act of God, war, civil disturbance, government
action, fire, flood, accident, hurricane, earthquake or other calamity,
strike or other labor dispute, or other action beyond the control of you.
4) The Hotel shall be furnished, equipped and shall otherwise be made ready
to open for business in accordance with the License on or before a date 13
months from the date of this License ("Completion Date").
You shall, within ten (10) days of the Completion Date, submit a written
request to Licensor for Licensor to conduct a final inspection. Upon receipt
of such request, Licensor shall promptly conduct such final inspection. You
shall open for business within ten (10) days after receipt of Licensor's
authorization to do so. The date upon which you receive authorization to open
for business shall be the "Opening Date". You shall not open for business
until Licensor provides final approval and authorization in writing.
The Hotel shall not be opened for business as a Microtel Inn, Microtel
Suites or a Microtel Inn & Suites unless and until:
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(i) Licensor has approved and accepted, in advance, in writing the
construction of the Hotel in accordance with the Plans; the
installation of all items of equipment, furniture, signs, computer
terminals and related supplies; and the hiring and training of staff
necessary to operate the Hotel in accordance with Licensor's
requirements;
(ii) no accounts are past due to Licensor, its parent, divisions,
subsidiaries or affiliated companies by you;
(iii) you are in full compliance with all of the terms of this License
Notwithstanding anything else herein to the contrary, Licensor may authorize
License to open and operate the Hotel even though you have not fully complied
with the terms of this License, provided that you agree to fulfill all
remaining terms of this License on or before the dates designated by
Licensor.
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