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to keep the Hotel open for business, except in the case of substantial damage or destruction by <br />natural hazard, by fire, or by other insurable hazard. <br />Conversion to Residential. <br />7.1 Developer shall not submit an application to City to convert the hotel to <br />apartments unless the following threshold has are satisfied: <br />(a) The Developer shall only be entitled to submit an application to City to <br />convert the hotel to apartments if the following thresholds are established. <br />(b) On the Third Hotel Anniversary Date (defined as three calendar years <br />following the date that the Hotel had the first guest completed the first overnight stay for <br />compensation in the Hotel), if for the period between the Second Hotel Anniversary Date <br />through the day before the Third Hotel Anniversary the RevPAR falls below $1255.00. (Revenue <br />per available room (RevPAR) is a hotel industry performance metric, and is calculated by <br />dividing the total room revenue for the hotel by the total number of available rooms in the period <br />being measured) <br />(c) On the Fourth Hotel Anniversary Date, if for the period between the Third <br />Hotel Anniversary Date through the day before the Fourth Hotel Anniversary the RevPAR falls <br />below $125.00. <br />(d) On the Fifth Hotel Anniversary Date if for the period between the Fourth <br />Hotel Anniversary Date through the day before the Fifth Hotel Anniversary the RevPAR falls <br />below $125.00. <br />(e) On the Sixth Hotel Anniversary Date if for the period between The Fifth <br />Hotel Anniversary Date through the day before the Sixth Hotel Anniversary the RevPAR falls <br />below $125.00. <br />7.2 Any application for conversion shall be subject to approval of all applicable City <br />entitlements. Developer understand and aclmowledges that, in the context of processing the <br />application to convert the hotel to apartments, the City cannot guarantee the ultimate outcome of <br />any public hearings before the Planning Commission or the City Council or other public bodies <br />of the City, nor prevent any opposition thereto by members of the public or other agencies <br />affected by or interested in the Project. By entering into this Agreement, the City does not pre - <br />commit or imply that the application to convert the hotel to apartments to be considered for <br />approval will be approved. The City retains the discretion to approve, conditionally approve, or <br />disapprove the application to convert the hotel to apartments. <br />8. Indemnification. <br />8.1 Developer Indemnity Obligations. Developer shall defend, with Counsel approved <br />by the City, and Indemnify City Parties against any and all Claims to the extent such Claims <br />arise from any wrongful intentional act or negligence of Developer Parties. <br />8.2 Independent of Insurance Obligations. Developer's indemnification obligations <br />under this Covenant shall not be construed or interpreted as in any way being restricted, limited <br />or modified by any insurance coverage carried by Developer. <br />Page 3 of 7 <br />55394.00049\33266069.5 <br />