Sample Rental Management Agreement

DELPHI HOTEL SAN FRANCISCO PREMIER MANAGEMENT

 

 

EXECUTION INSTRUCTIONS

 

Page 1

1.   Fill in date and names at the top of the page.

2.   In C of the Recitals, fill in your unit number.

 

Page 12

1.   In A of the Owner’s Additional Representations and Acknowledgements, fill in

      the date on which you executed your Purchase Agreement. You will find this date

      on the first page (top left hand corner) of your Purchase Agreement.

 

Page 15

1.   Initial at the top of the page, stating that you’ve read and understand the Owner’s

Additional Representations and Acknowledgements.

 

Page 16

      1.   At the bottom of the page, fill in the name and address of your Designated Person

            (the address to which you would like notices sent).

 

Page 20

1.   Initial near the top of the page, stating that you’ve read and understand the above

      notice.

 

Page 21

1.   Near the bottom of the page, fill in the name and address of the Designated

      Person.

 

Page 23

1.   There are four different execution pages attached. Choose the page that works for

      you (remove the others) and include the necessary signatures and details.

 

Return

1.   Please return the entire agreement, not just the signed or completed pages. We

      cannot accept faxed or scanned copies of the agreement. Please send the original

      executed agreement to the address below:

 

      Delphi Hotel San Francisco

      c/o Premier Management Rental Management Team

      123 Fourth Avenue, Suite 567

      San Francisco, California 94103

 

SAMPLE RENTAL MANAGEMENT AGREEMENT

 

DELPHI HOTEL SAN FRANCISCO

PREMIER MANAGEMENT

 

 

 

This RENTAL MANAGEMENT AGREEMENT (the “Agreement”) is dated the ______

day of ______________, 200___ (the “Effective Date”), and is made by and between

PREMIER MANAGEMENT, a California corporation (“Operator”), and _________________

(individually and collectively, “Owner”).

 

RECITALS

 

A. Operator is the manager of the Delphi Hotel San Francisco (the “Hotel”) which is

operated as a part of the Delphi Hotel and Condominiums project located at 123 5th Avenue, San Francisco, California (the “Project”).

 

B. Operator also operates a lodging rental management and reservation program (as

may be amended and modified from time to time by Operator, the “Program”) for the rental of condominium guestroom units located within the Project, with the condominium guestroom units so participating in the Program being referred to herein as the “Participating Units.”

 

C. Owner has acquired, or has contracted to acquire, fee title to condominium

guestroom unit number ___ (the “Unit”) within the Project.

 

D. Owner desires to appoint Operator as its exclusive rental management agent for

the limited purposes and functions described herein, and to have the Unit included within the Program, all on the terms and conditions set forth herein.

 

E. Operator is willing to include the Unit within the Program, but only on the terms

and conditions set forth herein.

 

AGREEMENTS

 

NOW, THEREFORE, for valuable consideration, including the promises, covenants,

representations and warranties hereinafter set forth, the adequacy of which is hereby

acknowledged, the parties, intending to be legally and equitably bound, agree as follows:

 

I.

 

DEFINITIONS

 

As used herein, the following terms shall have the meanings ascribed to them below:

“Association” or “Associations” means one or more of the owners’ associations

formed and maintained in connection with the Project consistent with the Governing Documents.

 

“Governing Documents” means the Articles of Incorporation and Bylaws of the

Associations, and the Declarations of Covenants, Conditions, Easements and Restrictions

recorded against the Project including, without limitation, (a) the Declaration of Covenants, Conditions, Easements and Restrictions for 5th & K Master Association recorded on March 22, Delphi SF\Rental Management Agreement 2 2006, as Instrument No. 2006-1235633, of Official Records, (b) the Declaration of Covenants,

Conditions, Easements and Restrictions of 5th & K Parcel 2 Owners’ Association recorded March 22, 2006, as Instrument No. 2006-1235634, of Official Records, and (c) the Declaration of Covenants, Conditions, Easements and Restrictions of 5th & K Parcel 3 Owners’ Association recorded March 22, 2006, as Instrument No. 2006-1235635, of Official Records.

 

“Guest” or “Guests” means a guest and invitee, or guests and invitees, of Owner

and/or of the Hotel, or both, as the context indicates, who uses the Unit for overnight

accommodations under the Program.

 

“Hotel Owner” has the meaning ascribed to it in the Governing Documents.

 

“License Agreement” has the meaning ascribed to it in Article VII(i) hereof.

 

“Other Revenues” means all revenues (other than Rental Revenues) from the

operation of the Hotel and the occupancy of the Unit, whether or not generated from Owner or the Guest(s) occupying the Unit and whether or not included in Owner’s or the Guest’s folio or folios, including without limitation, revenues for food and beverage purchases, minibar purchases, room service, fitness center use, spa use, gratuities, fees and other charges, telephone and internet charges, gift shop and other retail purchases, business center charges, in-room payper- view television and similar charges, event tickets, amenities and services provided by or at the Hotel, transient occupancy taxes collected, the portion of revenue from a “rental package” which is not allocated to the guestroom and from other services, products and activities.

 

“Project Standards” has the meaning ascribed to it in the Governing Documents.

 

“Rental Commitment” or “Rental Commitments” means, for any period, (a) the

reservation or reservations made, or commitment or commitments, extended to Guests of the Hotel by Operator for the use of the Unit pursuant to the Program, and/or (b) reservations for guestroom units at the Hotel that are of the same room or bed type as the Unit for periods when the Hotel has reservations for such guestroom units.

 

“Term” means the Initial and all Renewal Terms.

 

“Unit Charges” means, for any period, all payments made on behalf of, and

charges, costs, and expenses incurred on the account of, Owner and/or the Unit, including, without limitation, (a) charges for repair and maintenance of the Unit, (b) costs and expenses chargeable to Owner as provided in this Agreement (including, without limitation, for Refurbishments) and under the Unit Maintenance Agreement, (c) charges by Owner and/or Owner’s Guests at the Hotel (to the extent not otherwise paid by Owner or such Owner’s Guest at the time incurred), (d) fees, charges, assessments, and reimbursements to any Association, and (e) all other expenses chargeable to, and other amounts owing Operator by, Owner pursuant to the terms of this Agreement.

 

“Unit Maintenance Agreement” means that certain Unit Maintenance and

Operation Agreement executed by Owner and Hotel Owner pertaining to the Unit.

 

Capitalized terms not otherwise defined herein have the meanings ascribed to them in the

Governing Documents.

 

II.

 

EXCLUSIVE APPOINTMENT AND AUTHORITY

 

Owner hereby appoints Operator as Owner’s exclusive rental management agent

for the Unit, with the sole and exclusive authority to manage, operate, market and rent the Unit, and to conduct all negotiations for the rental and use of the Unit, all in accordance with the terms set forth in this Agreement and the Program, and Operator hereby accepts such appointment. Owner hereby relinquishes control of the Unit to Operator, and covenants and agrees that, during the Term hereof and during any Rental Commitment thereafter, Operator shall have sole possession, management, operation and control of the Unit. Subject to Owner’s use of the Unit as permitted by and pursuant to this Agreement, Operator shall determine whether to allow a Guest’s transient occupancy of the Unit and the terms of such occupancy. Operator and its employees, agents, contractors, licensees and assigns may enter the Unit, without Notice to Owner, from time to time, and at any time, for any purpose set forth in this Agreement and in connection with the operation of the Program.

 

Owner acknowledges and agrees that Owner shall not, and shall have no right to, manage, operate, use, rent or occupy, or otherwise allow any third party to manage, operate, rent, use or occupy, the Unit except the right to occupy the Unit as set forth in this Agreement (and then only through Operator), and Owner shall not attempt to manage, operate, use, occupy market or rent the Unit during the Term hereof, other than to refer all rental inquiries to Operator. In addition, Owner agrees not to accept any remuneration from any person (other than Operator) for the use, occupancy or rental of the Unit. During the Term, and thereafter during any period of a Rental Commitment, Owner may not remove the Unit from the rental market under the Program except for Owner’s use as permitted herein, and then only in strict compliance with the terms and requirements of this Agreement.

 

III.

 

OPERATOR RESPONSIBILITIES AND OBLIGATIONS

 

3.1       Operation of the Program. Pursuant to the Program and the terms of this

Agreement, Operator will make the Unit available only for transient occupancy use by Guests of the Hotel, Owner and Guests of Owner. Owner acknowledges that Operator acts as an exclusive rental agent for other Participating Units within the Project. Operator shall use commercially reasonable efforts to apportion reservations and Guests on a fair and equitable basis among Participating Units (including the Unit) within the Program; provided, however, that Operator shall have the right to accommodate the requests and preferences of Guests, and to depart from its policies and procedures concerning the allocation of Participating Units and reservations, at any time, in Operator’s determination, to manage and operate the Hotel and to administer the Program. Owner also acknowledges that Owner’s use of the Unit may have an adverse impact on the allocation of reservations to the Unit. Although Operator will act in good faith in the

performance of its obligations under this Agreement, Operator is under no obligation to promote any of the Participating Units in the Program over any of the other Participating Units, and Operator shall not be liable for any loss of income or other damages sustained or allegedly sustained by Owner arising from any failure of Operator to rent the Unit during one or more time periods.

 

3.2       Rental of the Unit. Operator reserves the right to vary the frequency and length of

the rental of the Unit for any reason, including, but not limited to, the following: (a) a particular size, feature, view, location or type of guestroom requested by a Guest; (b) prior reservation or other occurrence making the Unit unavailable for a duration of occupancy desired by a Guest; (c) the needed or ongoing repair or replacement activities or unsuitability of the Unit for rental; (d) the physical condition or amenities of the Unit; (e) the personal usage of the Unit by Owner or a Guest of Owner; and (f) any other factors affecting demand for or availability or desirability of the Unit. Owner acknowledges that if a Guest requests a particular location or one of the other

Participating Units in the Program, Operator will use commercially reasonable efforts to

accommodate such Guest’s request.

 

Operator reserves the right to move a Guest from the Unit, write-off amounts owed, or adjust the rental rate to a lesser amount, if a Guest is dissatisfied or otherwise requests the same for any reason. Operator reserves the right, and Owner authorizes Operator, to refund a Guest’s deposit, charges and other monies pursuant to Operator’s standard refund and cancellation policies in effect from time to time, or as otherwise determined by Operator. This includes, but is not limited to, cancelled stays, shortened stays or stays that are moved. Owner irrevocably and unconditionally agrees to accept, and abide and be bound by, the good faith decisions of Operator concerning any matter or issue involving a Guest and the rental of the Unit, including, without limitation, the rental of the Unit, the return of monies, complimentary stays, and rental rates.

 

Notwithstanding anything set forth herein to the contrary, in the event that any deposit is forfeited by any prospective Guest, or cancellation charges are imposed pursuant to Operator’s cancellation policies, Operator shall be entitled to retain one hundred percent (100%) of such deposit and charges, and such amount shall not be included in Rental  Revenues (as defined in Article V hereof).

 

3.3       Rental Rates. Operator reserves the right to, in Operator’s determination, from time to time, set rental rates at which Operator will offer the Unit for rental. Owner acknowledges that rental rates, and the terms and conditions, for the rental of the Unit may vary from other Participating Units in the Program, and may fluctuate as market conditions change, and authorizes Operator to adjust rental rates as necessary to facilitate occupancy of the Unit.  Operator shall be under no obligation to make adjustments to the rental rates and makes no representations as to whether any adjustments in rental rates will facilitate occupancy of the Unit.  In addition, Operator shall have the right to rent the Unit at discounted rates as may be  necessitated by seasonal markets, group business opportunities, and such other circumstances and facts as Operator determines most beneficial to the Program.

 

Owner further acknowledges that Operator may rent the Unit using “rental packages” which include rental for the Unit as well as pre-paid amounts for other amenities such as meals, spa treatments, golf, admission to baseball and football games, and theme park venues. In the event Operator so rents the Unit pursuant to a “rental package,” then in calculating the Rental Revenues (as defined in Article V hereof) collected for the Unit in connection therewith, only that portion of the package price attributable to the rental for the Unit, as determined by Operator based upon its standard pricing allocations, shall be included in the determination of the Rental Revenues collected.

 

Notwithstanding anything to the contrary in this Agreement, in order to attract group occupancy, promote the rental of the Units in the Program, and/or satisfy Guest issues, Operator may provide complimentary overnight occupancy in the Unit for up to five (5) nights per calendar year without compensation to Owner. With respect to any additional complimentary use of the Unit beyond such five (5) night period, Owner shall be entitled to a credit equal to that portion of Rental Revenues (as defined in Article V hereof) that would have been allocated to the Owner’s Revenue (as defined in Article V hereof) based upon the number of nights of such occupancy in excess of such five (5) night period multiplied by the average rental rate charged for the Unit in the calendar month prior to the month in which such excess complimentary usage occurs.

 

3.4       Room Service and Charging Privileges. Operator shall cause the Hotel to provide

the same services (and levels of service) to Guests of Owner and Guests of the Unit as the Hotel provides to other guests of the Hotel. Upon delivery of such credit information or deposits required by the Hotel pursuant to Section 4.3 hereof, Operator shall cause the Hotel to permit Guests of Owner to charge food and beverage consumption and other Hotel services to an account established for such Guests with the Hotel, consistent with the Hotel’s then policies and procedures.

 

3.5       Housekeeping Service. Operator will provide, or cause to be provided, at

Operator’s expense, routine housekeeping, cleaning services and pre-arrival and departure routine cleaning for the Unit in connection with the use of the Unit to the extent deemed appropriate by Operator.

 

3.6       Extraordinary/Deep Cleaning. Operator shall, as and when Operator determines

appropriate, provide or cause to be provided a comprehensive cleaning of the Unit, at Owner’s sole expense.

 

3.7       Periodic Inspections. Operator shall, as and when Operator determines

appropriate, inspect or cause to be inspected the Unit from time to time, for normal wear and tear, general maintenance needs, and repair or replacement of furniture, fixtures, equipment, case goods and floor coverings.

 

3.8       Repair, Maintenance and Replacements.

 

3.8.1    Repair and Maintenance; Refurbishments. Owner agrees and

acknowledges that the Unit, including patios and balconies, if any, and all furniture and

furnishings therein, must be kept and maintained in a “first class condition,” and in compliance with the License Agreement and Project Standards. Operator will, from time to time, at Owner’s sole expense, undertake any (a) maintenance and repair of the Unit and its furniture and furnishings, and will replace damaged, worn and obsolete furniture, fixtures, equipment, carpeting, linens, case goods, soft goods and/or other property in the Unit (collectively “Repairs”), and (b) refurbishment, upgrades, modifications, modernization, renovations, replacements and other expenditures for the Unit (including, without limitation, the costs of labor, supplies, materials and equipment) (collectively, “Refurbishments”), in each case as determined by Operator to be appropriate in order to maintain the same and the Unit in a manner and condition as required by the terms of the License Agreement and the Project Standards.  Owner hereby so authorizes Operator to make such Repairs and Refurbishments. In connection therewith, Owner acknowledges that the Unit may be temporarily removed from the Program to facilitate any such Repairs and Refurbishments.

 

3.8.2 Reserve. Operator shall charge and collect from Owner (and Owner shall

be responsible for), on a monthly basis, an amount equal to five percent (5%) of the Owner’s Revenue (as defined in Article V hereof) to fund a reserve (the “Reserve”) for the Unit, which shall be applied by Operator to the costs incurred for Repairs and Refurbishments. The funds comprising the Reserve shall not bear interest to Owner, shall be retained in a single reserve account (the “Reserve Account”) established by and in the name of Operator (with a bank selected by Operator) for all Participating Units, with the funds attributable to the Unit to be specifically identified on the Program’s books and records as maintained by Operator, shall be the property of Owner, and will (subject to the terms of this Agreement) be exclusively controlled and used by Operator for such Repairs and Refurbishments.

 

To the extent that the amounts in the Reserve are, at any time, insufficient to maintain the Unit in accordance herewith, as determined by Operator, Operator shall deliver a Notice to Owner of the amount of additional funds necessary to so comply with the obligations hereunder, and Owner shall supply and deliver such additional funds to Operator within thirty (30) days of the date of such Notice, which funds Operator shall apply to the Repairs and/or Refurbishments; provided, however, that if Owner does not so timely deliver such funds, Operator may elect to advance the funds or services reasonably necessary in connection with the

Repairs and/or Refurbishments, in which case Operator may charge interest thereon to Owner as specified in Section 6.5 hereof.

 

Upon a sale of the Unit or termination of this Agreement, the balance, if any, of

Owner’s Reserve will be returned to Owner unless the purchaser of the Unit assumes this

Agreement.

 

3.8.3 Supervision and Administration Fee. In connection with any such Repairs

and Refurbishments, Operator shall be entitled to charge Owner a supervision and administration fee equal to ten percent (10%) of the cost thereof (labor and materials) as invoiced by Operator.

 

3.9       Insurance. Operator shall not be responsible to obtain, maintain or pay for any

insurance for or on the Unit.

 

3.10     Employment of Personnel; Delegation of Responsibilities. Operator (or the Hotel Owner) shall retain, hire, supervise and discharge all labor and employees required for the management and operation of the Program and the rental of the Unit. In addition, Operator may, in Operator’s determination, and without Notice to or approval of Owner, contract with one or more third parties (whether affiliates or non-affiliates of Operator or the Hotel Owner) to provide any or all of the services, responsibilities and obligations of Operator under this Agreement (including reservation services); provided that any such contractual delegation shall not alter or reduce the standards of service required by the terms of this Agreement.

 

3.11     No Liability. Owner agrees that, except for the intentionally wrongful acts of

Operator, Operator Parties shall have no liability whatsoever with respect to any damage to the Unit, or any of the furniture, fixtures, equipment, floor coverings, case goods, soft goods or other items of personal property within the Unit, and Owner acknowledges and agrees that Owner shall be fully liable and responsible therefor. Operator shall inspect the Unit after each occupancy consistent with normal Hotel management practices, and shall make a reasonable attempt to locate damage to the Unit or missing items, if any. If Operator determines that any damage or missing items was the result of the acts or omissions of a Guest, then Operator shall use commercially reasonable efforts (excluding the institution of legal proceedings) to obtain restitution from such Guest consistent with the policies of the Hotel. Any sums so received shall be credited to Owner. Any deficiencies shall be the responsibility of Owner. The provisions of

this Section 3.11 shall survive the termination or expiration of the Term of this Agreement.

 

IV.

 

OWNER OBLIGATIONS, USE AND INDEMNITY OBLIGATIONS

 

4.1       Owner Use. The use of the Unit by Owner during the Term of this Agreement

shall be limited as set forth in this Agreement and by applicable law. Furthermore,

notwithstanding any provision of this Agreement to the contrary, Owner and Owner’s Guests may not occupy and use the Unit for an aggregate of more than twenty-eight (28) days during each calendar year of the Term (prorated for any partial year of Owner’s ownership), unless such occupancy and use is as a paying Guest of the Hotel. Owner shall have no right to use or occupy the Unit or any facilities of the Hotel, except during those periods in which Owner is entitled to the use and occupancy of the Unit as specifically provided herein. Owner acknowledges and agrees that during any period that the Unit is rented to a Guest, the Guest shall be entitled to the exclusive right of use and occupancy of the Unit.

 

4.2       Compliance With Project Standards and Policies. During the Term of this

Agreement, Owner shall comply, and shall cause Owner’s Guests to comply, in all respects, with the Unit Maintenance Agreement, the Project Standards, the Governing Documents, and the policies and procedures established by the Hotel, as may be amended and/or supplemented from time to time.

 

4.3       Owner Reservation and Occupancy. Owner shall have the right to reserve and use

the Unit subject to the terms, provisions and limitations set forth in this Agreement. In the event that Owner desires to make a reservation to use the Unit, Owner shall contact the Hotel’s designated representative and comply with the then reservation and cancellation policies of the Hotel (which may be amended and/or supplemented by the Hotel from time to time).

 

In the event that Owner intends to use the Unit, then Owner shall, prior thereto, deliver to Operator any and all credit and other information for Owner to establish a credit account at the Hotel with respect to use of the Unit, all as may be established by the Hotel from time to time. All charges incurred by Owner at the Hotel shall be charged against such credit account. In the event that Owner is unwilling or unable to provide such credit information, or such credit information proves to be invalid, or Owner fails to provide satisfactory cash deposit, Operator shall be authorized to deny Owner access to and occupancy of the Unit.

 

Subject to the foregoing, and the terms of this Agreement, Owner shall have the right to reserve the Unit for use by Owner or Owner’s Guests, provided, subject to, and on the condition that:

 

(a) The Unit is not subject to a Rental Commitment for any portion of the

time of Owner’s desired use;

 

(b) Operator receives at least twenty-four (24) hours advanced notice of such

desired use; and

 

(c) The Unit is otherwise available for use by Owner.

 

4.4       Use by Owner’s Guests. Subject to the terms of this Agreement, Owner may

make the Unit available for use by an Owner’s Guest, provided advanced Notice of such

occupancy and the credit and other information for such Guest is delivered to Operator as

provided in Section 4.3 hereof and the Unit is otherwise available pursuant thereto. Any and all privileges and restrictions imposed on Owner hereunder, and under the Unit Maintenance Agreement and the Governing Documents shall also apply to Owner’s Guests during such periods of their occupancy. With respect to occupancy by Owner’s Guests, Owner shall be responsible to pay all charges incurred by Owner’s Guests if not paid by such Guests, and Owner hereby authorizes Operator to so process such charges against Owner’s account. Owner acknowledges and agrees that any use of the Unit by Owner’s Guests shall be subject to the limitations set forth in Section 4.3(a), (b) and (c) hereof, and the following:

 

(a) No rental fees, consideration or other sums shall be charged or accepted

by Owner or any other person for use of the Unit by Owner’s Guests; and

 

(b) Owner’s Guests agree to register with the Hotel prior to occupancy of the

Unit.

 

4.5       Owner’s Responsibilities. In addition to the obligations of Owner set forth

elsewhere in this Agreement:

 

(a) Owner agrees not to alter, in any way, the Unit, or add to, install, or

remove any of the furniture, fixtures, equipment, soft goods, case goods, and other items of personal property in the Unit. To the extent Owner adds or leaves any such prohibited items within the Unit, Operator may remove and dispose of the same, at Owner’s cost, without further liability. Owner shall not do anything, or permit anything to be done, that could cause the Unit to not be maintained in accordance with the Project Standards.

 

(b) For the duration of the Term of this Agreement, Owner agrees to pay,

before the same is delinquent, to the extent not paid by Operator from the Owner’s Revenues as Unit Charges, all charges and expenses applicable to the Unit, assessments imposed by any Association, and all other similar public or private services (including all installation, connection and disconnection charges), to the extent not included in the assessments imposed by the Associations. Owner further agrees to pay, before the same becomes delinquent, all taxes (excluding transient occupancy taxes, which Operator shall pay from transient occupancy tax charges collected from Guests) and assessments of whatever kind or nature which may be imposed upon the Unit or any improvement, facility or personal property located therein, and every other charge, lien or expense accruing or payable during the Term of this Agreement in connection with the Unit.

 

(c) Owner agrees to, and agrees to cause its Guests, invitees, contractors and

agents to, comply with the terms and provisions of the Unit Maintenance Agreement, the

Governing Documents, and the Hotel’s rules and policies. Owner shall not permit any person or persons to enter the Unit without the prior written notification and coordination with Operator (and approval if otherwise required hereunder).

 

(d) Owner shall not, and shall not permit a Guest of Owner, to smoke in the

Unit.

 

4.6       Sale of Property by Owner. Owner agrees that if Owner intends to offer the Unit

for sale, Owner shall provide Notice thereof to Operator not later than five (5) days thereafter.  Owner further agrees that the Unit may not be shown to prospective buyers at any time that the Unit is being used by a Guest, and then only by Operator. Owner further agrees to honor, and cause any buyer to honor, all Rental Commitments for the Unit in the event of a sale of the Unit.  Without implying any obligation on the part of Operator, Owner shall be liable for any and all  damages and costs incurred in relocating a Guest from the Unit in order to facilitate the sale thereof. The provisions of this Section 4.6 shall survive the termination of this Agreement.

 

4.7       Hold Harmless; Indemnity. Owner hereby agrees to the fullest extent permitted

by law, to release, indemnify, defend and hold Operator, the Hotel, the Hotel Owner, and their respective owners, affiliates. subsidiaries, employees, officers, directors, shareholders, agents, successors and assigns (collectively, “Operator Parties”), free and harmless from and against any and all acts, omissions, investigations, inquiries, liabilities, losses, damages, fines, penalties, demands, taxes, injuries, claims, causes of action, judgments, allegations, costs and expenses (including reasonable attorney’s fees and costs) (collectively “Claims”) arising from and/or relating, directly or indirectly, from Owner’s breach of any provision of this Agreement from injury to person or property, or both, sustained by anyone in and about the Unit or in connection with Operator’s conduct hereunder and in the rental of the Unit, excluding only Claims arising from the gross negligence or willful misconduct of Operator.

 

The provisions of this Section 4.7 shall survive the termination or expiration of

the Term of this Agreement.

 

V.

 

OPERATOR’S FEE, MARKETING FEE AND OWNER’S DISTRIBUTABLE REVENUE

 

For each calendar month during the Term hereof, Owner shall be entitled to the “Owner’s Distributable Revenue.” Not later than the last day of each calendar month, the Owner’s Distributable Revenue shall be calculated for the prior calendar month, and the amount thereof distributed to Owner.

 

The following example is illustrative of the determination of the formula for the

Owner’s Distributable Revenue (as determined below) (all amounts are hypothetical and do not represent anticipated revenues and deductions):

 

Rental Revenues                                                                     $100.00

 

Less: Marketing Fee (10%)                                          $10.00

Less: Group Sales Fee, if applicable (3%)                  _______

 

Net Rental Revenues                                                                $90.00

 

Less: Operator’s Fee (50%)                                          $45.00

 

Owner’s Revenue (50%)                                                           $45.00

 

Less: Reserve (5% of Owner’s Revenue)                      $2.25

Less: Unit Charges, if applicable                                   _____

 

               

Owner’s Distributable Revenue                                    $42.75

 

The “Owner’s Distributable Revenue” for any period shall mean, and shall be

determined, as follows:

 

(a) First, “Rental Revenues” for such period shall be determined. “Rental

Revenues” is defined as the total rent actually collected by Operator for the rental of the Unit to Guests under the Program for any period, excluding (i) Other Revenues, and (ii) any sums refunded or returned to Guests;

 

(b) Next, from Rental Revenues, (i) a “Marketing Fee” of ten percent (10%)

of all Rental Revenues shall be deducted, which shall be for payment to third parties that furnish services to Operator and/or the Hotel in connection with the marketing and rental of the Unit (representing travel agents’ commissions, franchise (including the fees under the License Agreement), third party marketing fees, merchant credit card service fees, and other costs charged to Operator and/or the Hotel), and (ii) an additional “Group Sales Fee” of three percent (3%) of the Rental Revenue from group bookings (bookings of ten (10) or more guestrooms) shall be deducted, resulting in “Net Rental Revenues”;

 

(c) Next, from Net Rental Revenues, an “Operator’s Fee” of fifty percent

(50%) of Net Rental Revenues, which shall be compensation for Operator’s services provided herein, shall be deducted resulting in the “Owner’s Revenue”; and

 

(d) Next, from Owner’s Revenue, funds payable for the Reserve and for Unit

Charges (as defined in Article I hereof) shall be deducted;

 

The resulting amount shall be the “Owner’s Distributable Revenue.”

 

VI.

 

DISBURSEMENTS AND ACCOUNTING

 

6.1       Deposit of Rental Revenues. All Rental Revenues for the Unit shall be deposited

by Operator into Operator’s operating account (the “Hotel Operating Account”). Within thirty (30) days after the end of each calendar month, the Owner’s Revenue shall be transferred from the Hotel Operating Account into a non-interest bearing bank account established by and in the name of Operator for the Program (the “Program Account”). Owner acknowledges and agrees that the Owner’s Revenue for the Unit, as well as for the other Participating Units, shall be deposited into the Program Account. Operator shall have the right to withdraw and/or disburse from the Program Account any Unit Charges, Reserves and Service Fees that may be required.

 

6.2       Owner Costs. All charges to, or costs and expenses incurred on behalf of, by or

for Owner pursuant to this Agreement, and charges incurred in connection with Owner’s or Owner’s Guests’ use of the Unit and/or the Hotel, will be automatically deducted from Owner’s Revenue (to the extent not then paid by Owner or Owner’s Guests, as the case may be). To the extent not deducted from Owner’s Revenue, Owner agrees to pay any such expenses within thirty (30) days of receipt of a statement from Operator.

 

6.3       Monthly Unit Rental Revenue Statements. Not later than the last day of each

calendar month, Operator shall furnish to Owner (or to Owner’s Designated Person, if there is one), for the previous calendar month, a rental revenues statement (the “Rental Revenues Statement”) for the Unit, which shall reflect the Rental Revenues for the Unit in that calendar month, the Operator’s Fee, the Marketing Fee, the Group Sales Fee, Unit Charges, the funds placed in the Reserve, the Owner’s Distributable Revenue, and such other information as determined by Operator.

 

6.4       Disbursements to Owner. If the Rental Revenues Statement for a calendar month

reflects Owner’s Distributable Revenue owing to Owner, Operator shall pay such amounts to Owner at the time of the delivery of the Rental Revenues Statement. If the Rental Revenues Statement reflects that Owner owes Operator and/or the Hotel any sums, then Owner shall, within thirty (30) days thereafter, remit such amount to Operator, and if not so remitted, in addition to its other remedies, Operator may deduct such unpaid amounts against future Owner’s Distributable Revenue. To the extent that Owner pays the Service Fee to the Hotel Owner pursuant to the terms of the Unit Maintenance Agreement, then Operator shall reimburse Owner therefor at the time of the delivery of Owner’s Distributable Revenue; provided, however, that Operator may, from time-to-time, agree with the Hotel Owner for Owner’s Service Fee to be paid by Operator directly to the Hotel Owner, in which case Owner shall not be entitled to any reimbursement.

 

6.5       Delinquent Payments. Should either Owner or Operator fail to make a timely

payment of any amount due to the other by the terms of this Agreement, commencing on the due date for such payment, the balance due thereafter shall be subject to an interest charge at the amount of one percent (1%) per month, to the extent that such interest charge is not in excess of any applicable usury laws. If this interest charge exceeds any usury laws, such interest charges shall be adjusted to the maximum amount permitted under applicable usury laws.

 

6.6       Maintenance of Records. Operator shall maintain its records for the Unit,

including with respect to the Rental Revenues for the Unit, for a period of two (2) years, during which time Owner shall, one time per calendar year, have the right to inspect the same during Operator’s normal business hours, on not less than ten (10) business days advance Notice.

 

VII.

 

OWNER’S ADDITIONAL REPRESENTATIONS AND ACKNOWLEDGMENTS

 

In addition to the representations and acknowledgments set forth elsewhere in this

Agreement, Owner represents, warrants and acknowledges to Operator, which representations, warranties and acknowledgements shall survive the termination or expiration of the Term of this Agreement, as follows:

 

(a) OWNER IS CURRENTLY THE “PURCHASER” UNDER THAT

CERTAIN PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS DATED

____________ (THE “PURCHASE AGREEMENT”) BY AND BETWEEN OWNER AND DEVELOPER FOR THE PURCHASE OF THE UNIT, AND OWNER HAS THE FULL RIGHT, AUTHORITY AND POWER TO ENTER INTO THIS AGREEMENT.

 

(b) NO INDUCEMENTS OR REPRESENTATIONS OF ANY KIND WERE

MADE, DIRECTLY OR INDIRECTLY, TO OWNER ON BEHALF OF OPERATOR, THE DEVELOPER, THE HOTEL OWNER, THE LICENSOR, OR ANY OF THEIR AFFILIATES, OWNERS, REPRESENTATIVES, AGENTS, EMPLOYEES, MEMBERS, OFFICERS, DIRECTORS AS TO ANY TAX OR ECONOMIC BENEFITS OR IMPLICATIONS WHICH MAY OR MAY NOT BE REALIZED FROM OWNING AND/OR LEASING THE UNIT, OR THE INCLUSION OF THE UNIT IN THE PROGRAM.

 

(c) OWNER HAS NOT BEEN REQUIRED BY ANYONE TO PLACE THE

UNIT INTO THE PROGRAM OR RETAIN OPERATOR TO RENT THE UNIT, AND BUT FOR OWNER’S EXECUTION OF THIS AGREEMENT, OWNER WOULD BE FREE TO USE ANY OTHER AGENT FOR THAT PURPOSE SUBJECT TO THE REQUIREMENTS OF THE GOVERNING DOCUMENTS.

 

(d) INCOME FROM PARTICIPATING UNITS IN THE PROGRAM IS

NOT AND WILL NOT BE POOLED, AND OWNER WILL RECEIVE OWNER’S SHARE OF INCOME (IF ANY) ATTRIBUTABLE TO THE ACTUAL RENTAL OF THE UNIT AS SET FORTH IN THIS AGREEMENT, AND NOT FROM OTHER PARTICIPATING UNITS.

 

(e) OWNER ACKNOWLEDGES THAT IT IS FULLY AWARE THAT

OPERATOR, AS THE MANAGER OF THE HOTEL, MAY RENT GUEST ROOMS WITHIN THE PROJECT THAT ARE OWNED BY THE HOTEL OWNER AND/OR ITS AFFILIATES THAT ARE NOT PARTICIPATING IN THE PROGRAM. IN ADDITION, OWNER ACKNOWLEDGES AND AGREES THAT OPERATOR MAY BE THE MANAGER OF OTHER HOTELS WHICH MAY BE IN COMPETITION WITH THE HOTEL AND THE RENTAL OF THE UNIT HEREUNDER.

 

 

(f) THE TERMS, CONDITIONS, RIGHTS AND OBLIGATIONS OF

OWNER AND OPERATOR, AS PROVIDED IN THIS AGREEMENT, ARE EXPRESSLY SUBJECT TO AND CONDITIONED UPON OWNER’S ACQUISITION OF FEE TITLE TO THE UNIT, AND IF OWNER DOES NOT SO ACQUIRE FEE TITLE, THEN THIS AGREEMENT SHALL BE OF NO FORCE AND EFFECT, AND SHALL BE DEEMED NULL AND VOID.

 

(g) IN CONNECTION WITH PARTICIPATION IN THE PROGRAM,

OPERATOR OR ITS AGENT MANAGING THE PROGRAM MAY BE REQUIRED TO WITHHOLD TAXES ON CERTAIN PAYMENTS DUE TO OWNER IN THE EVENT OWNER EITHER FAILS TO PROVIDE REQUIRED TAX IDENTIFICATION INFORMATION OR CERTIFICATIONS, OR IF OWNER IS A “NON-UNITED STATES PERSON” AND THE UNIT IS NOT HELD IN CONNECTION WITH A “UNITED STATES TRADE OR BUSINESS” AS THOSE TERMS ARE USED FOR UNITED STATES INCOME TAX PURPOSES. OWNER FURTHER ACKNOWLEDGES THAT IF THE UNIT IS OWNED BY A FOREIGN INDIVIDUAL, THE UNIT MAY BE SUBJECT TO UNITED STATES FEDERAL ESTATE TAX UPON THE DEATH OF SUCH INDIVIDUAL.

 

(h) OWNER ACKNOWLEDGES AND CONFIRMS THAT NEITHER

OPERATOR, THE HOTEL OWNER, NOR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, MANAGERS, AGENTS, EMPLOYEES OR REPRESENTATIVES HAVE MADE OR MAKE ANY REPRESENTATION, WARRANTY OR GUARANTY OF ANY KIND, EXPRESS OR IMPLIED, AS TO (A) THE NUMBER OF DAYS THAT THE UNIT MAY BE RENTED, OR (B) THE INCOME POTENTIAL, RENTABILITY, PROFITABILITY, OCCUPANCY, ROOM RATE, EXPENSES OR COSTS OF OPERATION, OR OTHERWISE WITH RESPECT TO THE PLACEMENT OF THE UNIT IN THE PROGRAM, AND NO SUCH REPRESENTATIONS, WARRANTIES OR GUARANTIES HAVE BEEN MADE OR ARE MADE WITH RESPECT TO POTENTIAL SUCCESS OF THE PROGRAM OR THE HOTEL. TO THE EXTENT THAT ANYONE HAS MADE, SUGGESTED OR PERMITTED AN INFERENCE WITH RESPECT TO, OR IMPLIED ANY PROJECTION OF, RENTAL RATE, OCCUPANCY LEVELS, PROFIT OR LOSS IN

CONNECTION WITH THE PROGRAM, SUCH INFORMATION DOES NOT CONSTITUTE A REPRESENTATION BY OPERATOR, THE HOTEL OWNER OR THE LICENSOR, AND OWNER ACKNOWLEDGES AND REPRESENTS AND WARRANTS TO OPERATOR THAT OWNER HAS NOT RELIED UPON, OR CONSIDERED, ANY SUCH INFORMATION OR REPRESENTATIONS IN MAKING THE DECISION TO ENTER INTO THIS AGREEMENT.

 

(i) OWNER ACKNOWLEDGES AND UNDERSTANDS THAT THE

HOTEL OWNER HAS ENTERED INTO THE LICENSE AGREEMENT (THE “LICENSE AGREEMENT”) WITH LIFESTAR HOTELS LLC (“LICENSOR”) TO OBTAIN A LICENSE TO OPERATE THE HOTEL AS A DELPHI HOTEL. OWNER ACKNOWLEDGES AND AGREES THAT THE HOTEL OWNER INTENDS TO OPERATE THE HOTEL AS A DELPHI HOTEL PURSUANT TO THE LICENSE AGREEMENT AND AGREES THAT OPERATOR SHALL MAINTAIN AND MANAGE OWNER’S UNIT IN ACCORDANCE WITH THE PROJECT STANDARDS (AS DEFINED IN THE DECLARATIONS). OWNER

HEREBY AUTHORIZES OPERATOR, ITS EMPLOYEES, AGENTS, INDEPENDENT CONTRACTORS, LICENSEES AND ASSIGNS, INCLUDING, WITHOUT LIMITATION, LICENSOR TO ENTER THE UNIT, WITHOUT NOTICE, AT ANY TIME AND FROM TIME TO TIME FOR ANY PURPOSE SET FORTH IN THIS AGREEMENT. LICENSOR HAS THE RIGHT TO CAUSE THE TERMINATION OF THIS AGREEMENT IN THE EVENT OWNER FAILS TO COMPLY WITH ANY OF OWNER’S OBLIGATIONS HEREUNDER OR THE UNIT IS NOT MAINTAINED IN ACCORDANCE WITH THE PROJECT STANDARDS. OWNER AGREES THAT OWNER SHALL COOPERATE AND IN NO WAY INTERFERE WITH OR IMPEDE OPERATOR IN ITS OPERATION AND

MANAGEMENT OF THE HOTEL AS A DELPHI HOTEL IN ACCORDANCE WITH THE LICENSE AGREEMENT AND THE PROJECT STANDARDS. OWNER

UNDERSTANDS AND AGREES THAT THE LICENSE AGREEMENT MAY BE

TERMINATED DURING THE TERM OF THIS AGREEMENT OR LICENSOR MAY ELECT TO MODIFY OR CHANGE THE MARKS AND THE PROJECT STANDARDS USED IN CONNECTION WITH THE HOTEL. OWNER UNDERSTANDS AND AGREES THAT IN CONNECTION WITH THE LICENSE AGREEMENT, OPERATOR SHALL BE ENTITLED TO USE CERTAIN DELPHI TRADEMARKS. OWNER ACKNOWLEDGES AND AGREES THAT OWNER SHALL HAVE NO RIGHT TO USE THE DELPHI TRADEMARKS. THE HOTEL OWNER AND LICENSOR HAVE THE RIGHT TO TERMINATE THE LICENSE AGREEMENT AND CHANGE THE NAME, FRANCHISE, LICENSE, THEME, DESIGN AND OPERATION OF THE HOTEL AT ANY TIME DURING

THE TERM OF THIS AGREEMENT, AND ANY SUCH ACTION SHALL NOT BE

DEEMED A BREACH BY OPERATOR OF THE TERMS OF THIS AGREEMENT OR

OTHERWISE ENTITLE OWNER TO TERMINATE THIS AGREEMENT.

 

(j) OWNER ACKNOWLEDGES AND AGREES THAT ALL RECORDS

PERTAINING TO HOTEL GUESTS, INCLUDING, WITHOUT LIMITATION, GUEST LISTS, NAMES, ADDRESSES, GUEST CHARGE STATEMENTS, FOLIO ACCOUNTS, HOTEL GUEST RESERVATIONS, AND RESERVATION AGREEMENTS WITH RESPECT TO PAST, PRESENT OR FUTURE RENTAL OF ANY PARTICIPATING UNITS, OR OTHERWISE PERTAINING TO GUESTS, CONSTITUTE THE SOLE PROPERTY, AND THE PROPRIETARY INFORMATION, OF OPERATOR WHICH SHALL NOT BE MADE AVAILABLE OR DISCLOSED TO OWNER, AND TO WHICH OWNER WAIVES ALL RIGHT IN AND ACCESS THERETO, EXCEPT ON AN AS-NEEDED BASIS (AS DETERMINED BY OPERATOR) WITH RESPECT TO A PARTICULAR GUEST OF OWNER WHERE DISCLOSURE OF THE GUEST INFORMATION IS NECESSARY TO

PROTECT THE INTEREST OF OWNER, SUCH AS FOR A DISPUTE BETWEEN SUCH GUEST AND OWNER.

 

(k) OWNER FURTHER ACKNOWLEDGES AND AGREES THAT

OPERATOR SHALL HAVE NO LIABILITY OR RESPONSIBILITY FOR THE ACTS OR OMISSIONS OF ANY GUEST IN THE UNIT OR ANY GUEST OF THE HOTEL, AND OWNER FOREVER, UNCONDITIONALLY AND FULLY WAIVES ANY AND ALL RIGHTS TO ASSERT LIABILITY AND TO PURSUE AN ACTION AGAINST ANY OF THE OPERATOR PARTIES, OR THEIR SUCCESSORS AND ASSIGNS WITH RESPECT THERETO OR IN CONNECTION THEREWITH.

 

Owner represents and warrants to Operator that Owner has read and understands

the foregoing acknowledgements, and that but for this acknowledgment, Operator would not enter into this Agreement.

 

_______________

Owner’s Initials

 

VIII.

 

TERM AND TERMINATION

 

8.1       Term. The initial term of this Agreement shall commence at noon California time

on the date that the Hotel opens for business to the general public (the “Commencement Date”), and shall expire at 11:59 a.m. California time on the first day of the fourth calendar year following the calendar year of the Commencement Date (the “Initial Term”), and shall automatically renew for successive five (5) year renewal terms (each a “Renewal Term” and collectively, “Renewal Terms”) on the same terms and conditions as set forth herein, in each case unless earlier terminated pursuant to the express terms and conditions of this Agreement.  Notwithstanding the foregoing, however, at any time after the expiration of the Initial Term, Operator may elect to change the terms of this Agreement upon Notice to Owner (“Change Notice”) and such changes shall become effective on the date indicated in the Change Notice unless Owner shall, by Notice received by Operator not later than 5:00 p.m. California time on the date thirty (30) days after the date of the Change Notice, elect to terminate this Agreement.  In the event Owner so elects to terminate this Agreement, such termination shall be effective, at

the election of Operator, either at any time within sixty (60) days after receipt of Owner’s

election Notice or at the end of the calendar year in which such Change Notice is dated, in which case the proposed changes in the Change Notice will not be effective.

 

8.2       Suspension or Termination by Operator. Operator may terminate this Agreement

for cause, including, without limitation, in the event of a default or breach by Owner of any of Owner’s obligations under this Agreement, upon prior Notice to Owner. Any termination shall be subject to all existing Rental Commitments and upon such termination, Owner agrees to abide by and be bound to the terms and conditions of any such existing Rental Commitments.

 

In addition to any other remedies provided for in this Agreement, in the event of a default or breach by Owner of any of Owner’s obligations under this Agreement, Operator may elect to (a) suspend the rental of the Unit and the provision of other services under this Agreement, (b) refrain from accepting or allocating reservations from Guests or for Owner’s or Owner’s Guests’ use of the Unit, and/or (c) advise Owner that the existing reservations for Owner’s use shall be cancelled, all until such time as Owner has cured the default or breach hereunder to Operator’s reasonable satisfaction. In addition, Operator may terminate this Agreement, upon not less than thirty (30) days prior written notice delivered to Owner, in the event that Operator is

no longer the Hotel manager.

 

8.3       Termination by Owner. Upon a bona fide sale of the Unit to a third party, Owner

may terminate this Agreement upon not less than thirty (30) days prior Notice delivered to  Operator.

 

8.4       Affect of Termination. Notwithstanding (a) any provision of this Agreement to

the contrary, and (b) the termination of this Agreement or expiration of the Term, this Agreement shall remain in full force and effect for any Rental Commitments that have been confirmed by or for Operator prior to the termination of this Agreement (subject to Operator’s right, in its sole discretion, to transfer any such Rental Commitments to another of the Units participating in the Program). If at the termination of this Agreement or the expiration of the Term, there exist Rental Commitments entered into by Operator, Owner agrees to abide by and honor such Rental Commitments and shall maintain the Unit in accordance with the Project Standards and as set forth in this Agreement, and Operator’s rights and authorities under this Agreement shall be deemed to extend beyond the Term for the limited purpose of representing Owner and performing its obligations under such Rental Commitments. The provisions of this Section 8.4

shall survive the termination or expiration of the Term of this Agreement.

 

8.5       Final Accounting. If title to the Unit is conveyed or transferred, either voluntarily

or by operation of law, to any person or entity, Operator shall deliver, or cause to be delivered, a final report (the “Final Report”) to Owner within thirty (30) days after receipt by Operator of Notice of such transfer, which Final Report shall set forth the remaining unreported Rental Revenues, the Owner’s Distributable Revenue (or payment due to or from Owner), the amounts in the Reserve, and such other information as Operator shall

deem appropriate.

 

If this Agreement is terminated for any reason as set forth herein, Operator shall deliver or cause to be delivered a Final Report to Owner within thirty (30) days after the end of the calendar quarter in which this Agreement expired or is terminated, as applicable, which Final Report shall set forth any remaining Rental Revenues, the Owner’s Distributable Revenue, the Reserve account balance, and any sums owing Owner or Operator.

 

IX.

 

NOTICES

 

Except as otherwise expressly provided in this Agreement, all notices, requests, demands and other communications hereunder (“Notice”) shall be in writing and shall be deemed delivered by (i) hand delivery upon receipt, (ii) registered mail or certified mail, return receipt requested, postage prepaid, upon delivery to the address indicated in the Notice, and (iii) overnight courier (next business day delivery) on the next business day at 12:00 noon California time, whichever shall occur first, as follows:

 

To Owner (or its Designated              Name: ____________________________

Person, if one is appointed):               Address: __________________________

City, State, Zip: _____________________

 

To Operator:                           

PREMIER MANAGEMENT

Attn: General Manager - Delphi Hotel

123 5th Avenue

San Francisco, California 92009

Facsimile: (415) 578-1234

 

 

With a Copy to:

PREMIER MANAGEMENT

Attention: Gary G. Ross, Esq.

620 Walnut Center Drive

Eighth Floor

Walnut Creek, CA 94595

Facsimile: (925) 610-1234

 

Any correctly addressed Notice that is refused, unclaimed or undelivered because of an act or omission of the party to be notified shall be considered to be effective as of the first day that the Notice was refused, unclaimed or considered undeliverable by the postal authorities, messenger or overnight delivery service. The parties hereto shall have the right from time to time, and at any time, to change their respective addresses and each shall have the right to specify as its address any other address within the United States of America, by giving to the other party at least thirty (30) days prior Notice thereof, in the manner prescribed herein; provided, however, that to be effective, any such change of address must be actually received (as evidenced by a return receipt). Telephone numbers and email addresses, if listed, are listed for convenience purposes only and not for the purposes of giving Notice pursuant to this Agreement.

 

X.

 

MISCELLANEOUS

 

10.1     Force Majeure. If either the Project or the Unit is damaged by fire, catastrophe,

acts of God, civil commotion, war, acts of terrorism or other casualty so as to render the Unit unfit or unavailable for rental purposes, or if Operator is unable to operate the Program as a result of any of the foregoing or applicable laws, in each case as determined by Operator in its sole and absolute discretion, then Operator shall be excused from the performance of its obligations under this Agreement, without liability, until such force majeure event has concluded.

 

10.2     Governing Law. This Agreement and its application shall be governed by the

laws of the State of California. California shall have personal jurisdiction over the parties hereto and the judicial system for the County of San Francisco, California shall be the exclusive forum for any legal action brought in relation to this Agreement.

 

10.3     Assignment/Binding Effect. Operator shall have the right without Owner’s

consent to assign this Agreement and any or all of Operator’s rights and obligations hereunder without further liability for acts or omissions occurring after such assignment, and upon any such assignment, Operator shall be released from all further obligations hereunder, and Owner hereby consents thereto. Owner shall not have the right to assign its interest in this Agreement without the prior written consent of Operator, which Operator may grant, withhold or condition in its determination, and upon any such consented assignment, Owner shall either assign its interest in the Reserve to such assignee, or withdraw all amounts consisting of the Reserve and cause such

assignee to replenish such Reserve immediately upon acquiring title to the Unit. This Agreement and all provisions hereof shall survive and be binding upon, and shall inure to the benefit of the parties hereto and their respective successors and assigns.

 

10.4     Entire Agreement. This Agreement constitutes the entire understanding of the

parties with respect to the Program and there are no further or other representations, statements, warranties, agreements, understandings or terms, whether written or oral, with respect to the subject matter hereof, unless expressly referred to herein. This Agreement shall be in addition to, and shall not supersede, the Unit Maintenance Agreement, the terms of which shall survive.  This Agreement may be amended or modified only by an instrument in writing, signed by the parties or their duly authorized agents; provided, however, that in the event Operator, in its good faith discretion, determines that any provision of this Agreement may not be in compliance with any law(s) of any applicable jurisdiction, Operator shall have the sole and absolute right to amend this Agreement and revise the terms hereof so as to comply with such law(s), and any such amendment or revision shall be binding on Owner. If requested by Operator, Owner shall execute such instrument or document as Operator shall request so as to form such amendment or revision.

 

10.5     Attorneys Fees. If any action, arbitration, or proceeding is commenced by either

party to enforce its/their rights under this Agreement or to collect damages as a result of the breach of any of the provisions of this Agreement, the prevailing party in such action, arbitration, or proceeding, including any bankruptcy, insolvency or appellate proceedings, shall be entitled to recover all reasonable costs and expenses, including, without limitation, reasonable attorneys’ fees and court costs, in addition to any other relief awarded by the court.

 

10.6     Arbitration of Disputes; Statue of Limitations. Any dispute arising under the

terms of this Agreement shall be submitted to arbitration pursuant to the provisions of this Section 10.6, in accordance with the following rules and procedures:

 

(a)        The arbitration shall be conducted by and through the American Arbitration Association (“AAA”) in accordance with and pursuant to the Commercial Arbitration Rules and Procedures of the American Arbitration Association in effect at the time of the initiation of the arbitration. In the event AAA is unable or unwilling to conduct, or is disabled from conducting, such arbitration, the arbitration shall be submitted to arbitration by and pursuant to rules of the alternate arbitration services selected in accordance with the agreement of the parties. If the parties are unable to agree upon an alternate arbitration service within fifteen (15) days thereafter, then either party may petition any court of competent jurisdiction in San Francisco County, California, to appoint such an alternative service, which shall be binding on the parties. The rules and procedures of such alternative arbitration service in effect at the time the request for arbitration is submitted shall be followed. Notwithstanding the foregoing, however, in the event that the amount in controversy exceeds One Hundred Thousand Dollars ($100,000), or a party is seeking the termination of this Agreement over the objection of the other party, then the proceeding shall be conducted by three (3) arbitrators, one of whom shall be selected by Operator, one by Owner, and the third by the agreement of the two arbitrators selected hereunder.

 

(b)        Notwithstanding any provision of this Section 10.6 to the contrary, either

party may use small claims court as an alternative to arbitration of a dispute if the amount in controversy is within the jurisdictional limits of small claims court.

 

(c)        Additionally, the following terms and provisions shall apply.

 

(i)         Notice of any such dispute or claim, and a demand for the

arbitration thereof, must be delivered to the other party hereunder not later than one hundred eighty (180) days after the act or omission giving rise to the claim or dispute, and if not, then the noticing party shall be irrevocably deemed to have waived such dispute and claim, and the conduct underlying the dispute, and such party shall be deemed to have forever waived all claims and rights with respect thereto. Owner and Operator are intentionally waiving the statutory statute of limitations for all disputes and claims, and are agreeing that the statute of limitations for all disputes, claims, acts, omissions and conduct hereunder shall be one hundred eighty (180) days after the act or omission giving rise to the dispute or claim.

 

(ii)        Any party shall be entitled to recover reasonable attorney’s fees

and costs incurred in enforcing this Section 10.6, and the arbitrator shall have sole authority to award such fees and costs.

 

(iii)       The arbitrator(s) shall be authorized to provide all recognized

remedies available in law or in equity for any cause of action that is the basis of the arbitration.  The decision of the arbitrator(s) shall be final and binding, and may only be appealed on the same basis as a trial court judgment. An application to confirm, vacate, modify or correct an award rendered by the arbitrator(s) shall be filed in any court of competent jurisdiction in San Francisco County, California.

 

(iv)       The fees necessary to initiate the arbitration shall be borne initially

by the party initiating the proceeding; provided, however, the administration fees and any other fees and costs of the arbitration shall ultimately be borne as determined by the arbitrator(s).

 

(v)        The arbitrator(s) appointed to serve shall be a neutral and impartial

individual(s).

 

(vi)       The venue of the arbitration shall be in San Francisco County,

California unless the parties agree in writing to another location.

 

(vii)      Prompt and timely commencement of the arbitration proceeding

shall be required in accordance with (A) the above-referenced rules of the arbitration, or if the rules do not specify a date by which the arbitration proceeding must commence, then (B) a date as agreed to by the parties, and if they cannot agree, (C) a date determined by the arbitrator(s).

 

(viii)     Prompt and timely conclusion of the arbitration shall be required.

 

(ix)       If any provision of this Section 10.6 shall be determined by the

arbitrator(s) or by any court to be unenforceable or to have been waived, the remaining

provisions shall be deemed to be severable therefrom and enforceable according to their terms.

 

NOTICE:

 

Each party hereto hereby agrees to have any dispute and claim arising out of this

Agreement shall be arbitrated and resolved in accordance with the provisions of this

Section 10.6 entitled “Arbitration of Disputes”. Any such dispute or claim shall be decided by neutral, binding arbitration in accordance with the Commercial Arbitration Rules and Procedures of the American Arbitration Association and, to the extent not in conflict therewith, the California Arbitration Act, and such party is giving up any rights it might possess to have the dispute litigated in a court or jury trial or other proceeding, and is also agreeing that the arbitration of any such dispute must be commenced within one hundred eighty (180) days or the act or omission giving rise to the dispute or claim. Each party is giving up its judicial and/or statutory rights to discovery (except as set forth herein), trial and appeal, except to whatever extent any rights are specifically included in this Section 10.6, and is agreeing to a one hundred eighty (180) days statute of limitation of claims. If a party refuses to submit to arbitration, (i) such party may be compelled to arbitrate, and/or (ii) arbitration may go forward in the absence of the refusing party.

 

_______________                  _____________

Operator’s Initials                   Owner’s Initials

 

10.7     Waiver of Right to Jury Trial and Right to Class Action. Operator and Owner

acknowledge and agree that by entering into this Agreement and by agreeing to the terms of this Agreement:

 

(a)        OPERATOR AND OWNER HEREBY WAIVE THEIR RIGHTS TO

TRIAL BY JURY OF ANY DISPUTE ARISING OUT OF OR RELATING TO THIS

AGREEMENT ALLEGED AGAINST EACH OTHER, THE HOTEL, OR ANY OF THE OPERATOR PARTIES.

 

(b)        OPERATOR AND OWNER HEREBY WAIVE ANY RIGHTS TO

PROCEED BY WAY OF A CLASS ACTION, TO SERVE IN ANY REPRESENTATIVE CAPACITY FOR OTHERS, AND TO ACT AS A PRIVATE ATTORNEY GENERAL IN ANY CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE BREACH, TERMINATION, ENFORCEMENT, INTERPRETATION OR VALIDITY THEREOF.

 

10.8     Limitation of Liability. In consideration of the benefits accruing hereunder,

Operator and Owner agree that, in the event of any actual or alleged failure, breach or default of this Agreement by Operator or Owner:

 

(a)        The sole and exclusive remedy shall be against the defaulting party and its

assets;

 

(b)        If the defaulting party is an entity, no owner of the defaulting party shall

be sued or named as a party in any suit or action;

 

(c)        If the defaulting party is an entity, no service of process shall be made

against any owner or employee of the defaulting party (except as may be necessary to secure jurisdiction of the defaulting party);

 

(d)       If the defaulting party is an entity, no owner or employee of the defaulting

party shall be required to answer or otherwise plead to any service of process;

 

(e)        If the defaulting party is an entity, no judgment may be taken against any

owner or employee of the defaulting party;

 

(f)        If the defaulting party is an entity, any judgment taken against any owner

or employee of the defaulting party may be vacated and set-aside at any time without hearing;

 

(g)        If the defaulting party is an entity, no writ of execution will ever be levied

against the assets of any owner or employee of the defaulting party; and

 

(h)        These covenants and agreements are enforceable both by the defaulting

party and also by any owner or employee of the defaulting party.

 

In addition to the foregoing, and notwithstanding any other term or provision of this Agreement or applicable law to the contrary, except as to a party’s fraud, neither Owner nor Operator shall have liability for the breach (or breaches) of any representation, warranty, covenant, indemnity or other obligation set forth herein in excess of, in the aggregate, Twenty- Five Thousand Dollars ($25,000). In no event shall Operator or Owner have any liability for special damages, loss of profits, punitive damages, consequential damages, or damages for diminution-in-value, but shall only be liable, subject to the aggregate Twenty-Five Thousand Dollars ($25,000) limitation in the preceding sentence, for the other party’s actual out-of-pocket damages and third party expenses.

 

10.9     Unit Owner(s) of Record. If there is more than one Owner of the Unit, or if the

Unit is owned by a partnership, limited liability company, trust, corporation or other entity, Owner, and each of them, hereby appoints the person specified below (the “Designated Person”) as the person designated by all such Owner(s) to represent all of the Owner(s) in all matters pertaining to the Unit and this Agreement (and the matters addressed herein), and the Designated Person shall be the only person who shall have authority to bind Owner(s). Operator shall be entitled to rely, without liability to Owner(s), on any action, authorization, communication, instruction, decision, act, and representation of the Designated Person and the same shall be binding on Owner(s). All Notices, communications and other materials to be delivered hereunder, shall be delivered to the Designated Person and shall be deemed delivered to Owner(s), if delivered to the Designated Person, and Operator shall have no liability for the acts

or omissions of such Designated Person.

 

The Designated Person is:

 

Name: ____________________________________

Address: ___________________________________

City, State, Zip: _____________________________

 

The Designated Person may be changed only upon Notice delivered to Operator, executed by all Owners (or all of the owners of an Owner that is a corporation, partnership, limited liability company or other entity, or all of the trustees of an Owner that is a trust), which change shall be effective thirty (30) days thereafter.

 

10.10   Authority. The person or persons signing this Agreement as “Owner” or on

behalf of Owner represents and warrants to Operator that he/she/they are authorized to enter into this Agreement and that this Agreement is and will be binding on all record owner(s) of the Unit.

 

10.11   Severability. If any provision of this Agreement or application thereof to any

person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Agreement (including the application of such provision to persons or circumstances other than those to which it is held invalid or unenforceable) shall not be affected thereby, and each provision of this Agreement shall be valid and enforced to the fullest extent permitted by law.

 

10.12   Operator’s Rights and Determinations. All rights reserved to Operator in this

Agreement, and all references herein to “Operator’s determination,” “as Operator determines,” “as determined by Operator,” “the determination of Operator,” “as and when deemed appropriate by Operator,” and words of similar reference, content and/or inference, shall mean Operator’s exercise thereof in its sole and absolute discretion.

 

10.13   Counterparts, Headings, and Defined Terms. This Agreement may be executed in

counterparts, each of which shall be an original, but all of which together shall constitute one agreement. The headings to sections of this Agreement are for convenient reference only and shall not be used in interpreting this Agreement.

 

10.14   Time of the Essence. Time is of the essence of this Agreement.

 

10.15   Rules and Regulations. Operator may, from time to time, prepare, amend or

modify rules and regulations relating to the maximum number of occupants of the Unit and activities which may be carried on in the Unit with respect to noise, and such other rules and regulations as Operator may feel proper, or which are implemented in connection with the operation of the Hotel and Units in the Program, with respect to the Unit.

 

10.16   Recordation of Memorandum. At the request of Operator, Operator and Owner

shall execute and record a Memorandum of Rental Agreement referencing this Agreement in the Official Records of the County Recorder for the County in which the Unit is located.

 

10.17   No Partnership or Joint Venture. The relationship of Owner and Operator shall be

that of principal and agent. Nothing contained in this Agreement shall be construed to create a partnership or joint venture between them or their successors-in-interest. Under no circumstances shall Owner, as a result of this Agreement, be deemed to have any interest (whether equity, leasehold, or otherwise) in the Hotel and/or the Project.

 

10.18   Survival. The terms and obligations of the parties hereunder that, by their terms,

are intended to survive the termination of this Agreement, shall so survive the expiration or termination hereof.

 

XI.

 

EXECUTION

 

THIS AGREEMENT IS SIGNED WITH OWNER’S UNDERSTANDING AND

KNOWLEDGE OF THE OBLIGATIONS AND INFORMATION CONTAINED HEREIN.  OWNER ACKNOWLEDGES THAT OWNER HAS READ AND THOROUGHLY UNDERSTANDS AND AGREES TO EACH AND EVERY PROVISION OF THIS AGREEMENT. OWNER AGREES TO COMPLY WITH THE POLICIES AND PROCEDURES SET FORTH WITHIN THIS AGREEMENT. IF THIS AGREEMENT IS ALTERED IN ANY WAY INCLUDING ADDITIONS, DELETIONS OR CHANGES MADE BY OWNER FOLLOWING EXECUTION BY OPERATOR, THIS AGREEMENT WILL, AT OPERATOR’S SOLE ELECTION, BECOME AUTOMATICALLY VOID AND OF NO FORCE OR EFFECT.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above.

 

OWNER:

 

[INDIVIDUAL]

 

_____________________________

Name: ______________________

 

OPERATOR:

 

PREMIER MANAGEMENT,

a California corporation

 

By: _________________________

Name: ______________________

Title: _______________________

 

 

 

XII.

 

EXECUTION

 

THIS AGREEMENT IS SIGNED WITH OWNER’S UNDERSTANDING AND

KNOWLEDGE OF THE OBLIGATIONS AND INFORMATION CONTAINED HEREIN. OWNER ACKNOWLEDGES THAT OWNER HAS READ AND THOROUGHLY UNDERSTANDS AND AGREES TO EACH AND EVERY PROVISION OF THIS AGREEMENT. OWNER AGREES TO COMPLY WITH THE POLICIES AND PROCEDURES SET FORTH WITHIN THIS AGREEMENT. IF THIS AGREEMENT IS ALTERED IN ANY WAY INCLUDING ADDITIONS, DELETIONS OR CHANGES MADE BY OWNER FOLLOWING EXECUTION BY OPERATOR, THIS AGREEMENT WILL, AT OPERATOR’S SOLE ELECTION, BECOME AUTOMATICALLY VOID AND OF NO FORCE OR EFFECT.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above.

 

OWNER:

 

[CORPORATION]

 

____________, a ___________ corporation

 

By: _________________________

Name: ______________________

Title: _______________________

 

By: _________________________

Name: ______________________

Title: _______________________

 

OPERATOR:

 

PREMIER MANAGEMENT,

a California corporation

 

By: _________________________

Name: ______________________

Title: _______________________

 

 

 

XIII.

 

EXECUTION

 

THIS AGREEMENT IS SIGNED WITH OWNER’S UNDERSTANDING AND

KNOWLEDGE OF THE OBLIGATIONS AND INFORMATION CONTAINED HEREIN. OWNER ACKNOWLEDGES THAT OWNER HAS READ AND THOROUGHLY UNDERSTANDS AND AGREES TO EACH AND EVERY PROVISION OF THIS AGREEMENT. OWNER AGREES TO COMPLY WITH THE POLICIES AND PROCEDURES SET FORTH WITHIN THIS AGREEMENT. IF THIS AGREEMENT IS ALTERED IN ANY WAY INCLUDING ADDITIONS, DELETIONS OR CHANGES MADE BY OWNER FOLLOWING EXECUTION BY OPERATOR, THIS AGREEMENT WILL, AT OPERATOR’S SOLE ELECTION, BECOME AUTOMATICALLY VOID AND OF NO FORCE OR EFFECT.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above.

 

OWNER:

 

[LIMITED LIABILITY

COMPANY/PARTNERSHIP]

 

____________, a ___________

 

By: _________________________

Name: ______________________

Title: _______________________

 

OPERATOR:

 

PREMIER MANAGEMENT,

a California corporation

 

By: _________________________

Name: ______________________

Title: _______________________

 

 

 

XIV.

 

EXECUTION

 

THIS AGREEMENT IS SIGNED WITH OWNER’S UNDERSTANDING AND

KNOWLEDGE OF THE OBLIGATIONS AND INFORMATION CONTAINED HEREIN.  OWNER ACKNOWLEDGES THAT OWNER HAS READ AND THOROUGHLY UNDERSTANDS AND AGREES TO EACH AND EVERY PROVISION OF THIS AGREEMENT. OWNER AGREES TO COMPLY WITH THE POLICIES AND PROCEDURES SET FORTH WITHIN THIS AGREEMENT. IF THIS AGREEMENT IS ALTERED IN ANY WAY INCLUDING ADDITIONS, DELETIONS OR CHANGES MADE BY OWNER FOLLOWING EXECUTION BY OPERATOR, THIS AGREEMENT WILL, AT OPERATOR’S SOLE ELECTION, BECOME AUTOMATICALLY VOID AND OF NO FORCE OR EFFECT.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above.

 

OWNER:

 

[TRUST]

 

_________________________________________

Name: ________________, Trustee of the ______

Trust dated ________________

 

OPERATOR:

 

PREMIER MANAGEMENT,

a California corporation

 

By: _________________________

Name: ______________________

Title:_______________________

 

THE ABOVE SUMMARY IS NOT INTENDED TO BE A THOROUGH AND EXHAUSTIVE EXPLANATION OF ALL OF THE TERMS AND PROVISIONS OF THE PROJECT DOCUMENTS. WHILE THE PURCHASER CAN USE THIS SUMMARY AS A GENERAL SUMMARY OF THE PROJECT, THE PURCHASER MUST REFER TO THE PROJECT DOCUMENTS TO DETERMINE HIS OR HER ACTUAL RIGHTS AND OBLIGATIONS. IF ANY CONFLICT OR DIFFERENCE EXISTS BETWEEN THIS SUMMARY AND THE PROJECT DOCUMENTS, THE PROJECT DOCUMENTS WILL CONTROL.