Approving an Amendment - South Bend Central Development Area Dev Plan

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damages to the Commission. Host also agrees that it would be difficult, if not impossible, to determine or prove the specific amount of such damages that would be suffered as a result of such breach. Host and the Commission estimate that the Host Claw-back Amount and the Host Liquidated Damages Amount are the amounts which will be necessary to enable the Commission to be placed in the position it would have been in but for such breach and are not designed to penalize Host. (iv) The Commission ,and 1st Source agree that Host shall not be required to pay the Host Claw-back Amount or the Host Liquidated Damages Amount to the Commission, if, at any time prior to December 31, 2017, the Hotel suffers a Catastrophic Event. For purposes of this Agreement, the term "Catastrophic Event" shall mean an event that has a material adverse effect on the financial condition or operations of the Hotel resulting from (A) a natural or unnatural disaster that results in the complete destruction of the Hotel, the destruction of a substantial portion of the Hotel, or the inability of the Hotel to operate for a period of at least three (3) months, or (B) acts of war, sabotage, terrorist acts or similar events that materially and adversely affect the travel and tourism industry in the United States. (f) The Parties agree that Host shall be released from its obligation to refund the Host Claw-back Amount to the Commission under Section 3(e)(i) if the Adjusted Net Operating Income (as defined below) for the Hotel falls below $0 in 2011 or 2012, $250,000 in 2013 or 2014, or $500,000 in 2015, 2016, or 2017 (the "ANOI Exception"). Adjusted Net Operating Income shall mean the adjusted net operating income of the Hotel for a calendar year as determined in accordance with the Summary Operating Statement attached hereto as Exhibit E (the "Summary Operating Statement"), except that (i) "Management Fees" shall not exceed three percent (3%) of Total Revenue for such year as set forth in the Summary Operating Statement, (ii) "Replacement Reserves" shall not exceed five percent (5%) of Total Revenue for such year as set forth in the Summary Operating Statement, (iii) Total Revenue shall be ratably increased to account for any revenues that were not received because guest rooms and other facilities were not available for customer use as a result of the construction of the Hotel Improvements (determined after consideration of occupancy rates at the time of the Hotel Improvements and other relevant factors}, and (iv) any amounts expended or expenses incurred in connection with the Hotel Improvements or Atrium Improvements will not be counted for purposes of determining the Adjusted Net Operating Income; provided, however, that subsection (iii) above shall only apply if construction of the Hotel Improvements occurred during a portion of the applicable calendar year for purposes of applying the ANOI Exception in such year. Host shall not be relieved of its obligations under this Agreement as a result of the ANOI Exception unless (i) the Hotel Improvements and the Atrium Improvements (other than as a result of 1st Source's actions or inactions) are timely completed in accordance with the terms of this Agreement and (ii) Host has (A) provided the City with thirty (30) days prior written notice (together with the applicable Summary Operating Statement and supporting calculations) of its claim that the ANOI Exception applies and (B) allowed the -7-