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Winston Hotels - Hotel Management Agreement BY And Between Barclay
HOTEL
MANAGEMENT AGREEMENT
By and Between
BARCLAY HOSPITALITY SERVICES INC.
and
ALLIANCE HOSPITALITY MANAGEMENT, LLC
Dated
July 1, 2003
TABLE OF CONTENTS
Page
---- ARTICLE I DEFINITIONS..................................................................1
Section 1.01. Definitions.....................................................1
ARTICLE II TERM OF AGREEMENT...........................................................9
Section 2.01. Term............................................................9
ARTICLE III ENGAGEMENT OF MANAGER AND OPERATION OF THE HOTEL...........................9
Section 3.01. Engagement of Operator to Manage Hotel..........................9
Section 3.02. Contract Commencement Date......................................9
Section 3.03. Operator as Agent..............................................10
Section 3.04. Operator's Status..............................................10
Section 3.05. Representations by Operator; Engagement of Operator............11
Section 3.06. Standards of Operation.........................................11
Section 3.07. Reservations Services..........................................12
Section 3.08. Marketing......................................................12
Section 3.09. Consultations Between Lessee and Operator......................13
Section 3.10. Duties of Operator.............................................13
Section 3.11. Authority of Operator..........................................15
Section 3.12. Employees......................................................15
Section 3.13. Litigation.....................................................16
Section 3.14. Lessee's Right of Inspection and Review........................16
ARTICLE IV INDEPENDENT CONTRACTOR.....................................................16
Section 4.01. Operator Status................................................16
Section 4.02. Employees......................................................16
Section 4.03. Reimbursement of Employee Expenses.............................17
Section 4.04. Employee Benefit Plans.........................................17
Section 4.05. Execution of Agreements........................................18
ARTICLE V INDEMNIFICATION.............................................................18
Section 5.01. Indemnification by Operator....................................18
Section 5.02. Limitations on Indemnification.................................19
Section 5.03. Indemnification by Lessee......................................19
Section 5.04. Survival of Indemnity..........................................20
Section 5.05. Employment Claim...............................................20
Section 5.06. Environmental Matters..........................................20
ARTICLE VI BUDGETS AND POLICY MEETINGS................................................21
Section 6.01. Budgets........................................................21
Section 6.02. Budget Meetings................................................22
Section 6.03. Approval by Lessee Required....................................22
ARTICLE VII OPERATING EXPENSES........................................................22
Section 7.01. Payment of Operating Expenses..................................22
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Section 7.02. Operating Expenses Not an Obligation of Operator...............23
ARTICLE VIII BANK ACCOUNTS............................................................23
Section 8.01. Bank Accounts..................................................23
Section 8.02. Authorized Signatures..........................................24
Section 8.03. Investment of Hotel Cash.......................................25
Section 8.04. Payroll........................................................25
Section 8.05. Security Deposits..............................................25
ARTICLE IX BOOKS, RECORDS AND STATEMENTS..............................................25
Section 9.01. Books and Records..............................................25
Section 9.02. Statements.....................................................26
Section 9.03. Initial Accounting Records.....................................27
ARTICLE X OPERATOR'S FEE AND TRANSFERS TO LESSEE......................................27
Section 10.01. Payment of Operator's Basic Fee...............................27
Section 10.02. Payment of Operator's Incentive Fee...........................27
Section 10.03. Distribution of Cash..........................................27
Section 10.04. Adjustments to Allocations....................................27
Section 10.05. Arbitration...................................................28
Section 10.06. Required Capital..............................................28
ARTICLE XI REPAIRS AND MAINTENANCE....................................................28
ARTICLE XII INSURANCE.................................................................29
Section 12.01. General.......................................................29
Section 12.02. Required Coverage.............................................29
Section 12.03. Employment Insurance..........................................29
Section 12.04. Approval of Companies and Cost by Owner and Lessee............29
Section 12.05. Maintenance of Coverages......................................30
Section 12.06. Waiver of Subrogation.........................................30
Section 12.07. Blanket Coverage and Self-Insurance...........................30
Section 12.08. Adequacy of Insurance.........................................30
Section 12.09. Exclusions....................................................30
ARTICLE XIII PROPERTY TAXES, LOCAL TAXES, LEVIES AND OTHER ASSESSMENTS................31
Section 13.01. Property Taxes................................................31
Section 13.02. Lessee's Right to Contest.....................................31
ARTICLE XIV DAMAGE OR DESTRUCTION - CONDEMNATION......................................31
Section 14.01. Damage........................................................31
Section 14.02. Condemnation..................................................31
ARTICLE XV USE OF NAME................................................................31
ARTICLE XVI OWNER'S RIGHT TO SELL.....................................................32
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---- ARTICLE XVII DEFAULT AND REMEDIES.....................................................32
Section 17.01. Events of Default- Remedies...................................32
Section 17.02. Rights Not Exclusive..........................................33
ARTICLE XVIII NOTICES.................................................................34
Section 18.01. Notices.......................................................34
ARTICLE XIX ASSIGNMENT................................................................35
Section 19.01. No Assignment by Operator.....................................35
Section 19.02. Assignment by Lessee..........................................36
ARTICLE XX SUBORDINATION..............................................................38
Section 20.01. Subordination To First Mortgage...............................38
Section 20.02. Foreclosure...................................................38
ARTICLE XXI TERMINATION...............................................................38
Section 21.01. Transition Procedures.........................................38
Section 21.02. Licenses......................................................38
Section 21.03. Leases, Concessions and Agreements............................38
Section 21.04. Books and Records.............................................39
Section 21.05. Remittance....................................................39
Section 21.06. Other Transfers and Deliveries................................39
Section 21.07. Confidential Information......................................39
Section 21.08. Employees of Hotels...........................................40
Section 21.09. Further Assurances............................................40
ARTICLE XXII MISCELLANEOUS............................................................40
Section 22.01. Further Documentation.........................................40
Section 22.02. Captions......................................................40
Section 22.03. Successors and Assigns........................................40
Section 22.04. Competitive Market Area.......................................41
Section 22.05. Assumption of Post Termination Obligations....................41
Section 22.06. Entire Agreement..............................................41
Section 22.07. Governing Law.................................................41
Section 22.08. No Political Contributions....................................41
Section 22.09. Lessee Reimbursement Upon Certain Terminations................41
Section 22.10. Management of Other Hotels....................................42
Section 22.11. Rebate Transactions...........................................42
Section 22.12. Non-Recourse to Noble.........................................43
Section 22.13. No Third Party Beneficiaries..................................43
Section 22.14. Estoppel Certificate..........................................43
Section 22.15. Counterparts..................................................43
Section 22.16. Purchase of Furniture, Fixtures and Equipment.................43
Section 22.17. Requirement to Cooperate......................................43
Section 22.18. Document Retention Policy.....................................43
Section 22.19. Sarbanes-Oxley Act of 2002....................................43
Section 22.20. Contracts and Affiliates......................................43
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Section 22.21. Special Provisions............................................44
EXHIBIT A -- Hotels and Owners
EXHIBIT B -- Franchise Agreements
EXHIBIT C -- Intentionally Deleted
EXHIBIT D -- REIT Hotels
EXHIBIT E -- Insurance
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HOTEL MANAGEMENT AGREEMENT
This HOTEL MANAGEMENT AGREEMENT is made and entered into as of July 1, 2003, by and among BARCLAY HOSPITALITY SERVICES INC., a North Carolina corporation ("Lessee"), and Alliance Hospitality Management, LLC, a Georgia limited liability company ("Operator"), with reference to the following facts:
RECITALS:
A. Lessee leases from WINN Limited Partnership and its affiliates described on Exhibit A (each, an "Owner" and collectively, the "Owners") the hotel properties described in Exhibit A (each, a "Hotel" and collectively, the "Hotels") pursuant to one or more Lease Agreements (each, a "Lease");
B. Lessee desires to engage Operator to operate and manage the Hotels in accordance with the terms of this Agreement;
C. Operator desires to supply the services and to operate the Hotels in accordance with the terms of this Agreement;
D. The parties desire that this Agreement represent an individual hotel management agreement for each Hotel described in Exhibit A, as it may be amended from time.
NOW, THEREFORE, for and in consideration of the mutual covenants, conditions, stipulations, agreements and obligations hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, Lessee and Operator covenant and agree as follows:
TERMS
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
(a) As used herein, the following terms shall have the indicated meanings:
(1) "AAA" means the American Arbitration Association.
(2) "Accounting Period" shall mean each of twelve (12) accounting periods of one (1) calendar month occurring each Fiscal Year.
(3) "Affiliate" shall mean (a) any person that, directly or indirectly, controls or is controlled by or is under common control with such person, (b) any person that owns, beneficially, directly or indirectly, ten percent (10%) or more of the outstanding capital stock, shares or equity interests of such person, or (c) any officer, director, employee, partner or trustee of such person or any person controlling, controlled by, or under common control with such
person. For purposes of this definition, the term "control" means the power to direct or cause the direction of management and policies, through the ownership of voting rights, by contract or otherwise.
(4) "Agreement" shall mean this Hotel Management Agreement and all amendments, modifications, supplements, consolidations, extensions and revisions to this Hotel Management Agreement approved by Lessee and Operator.
(5) "Annual Business Plan" means the detailed annual business plan for the operation of the Hotel for each Fiscal Year prepared by Operator pursuant to Section 3.10(l) of this Agreement.
(6) "Approved Budget" shall mean the Hotel Operating Budget prepared annually by Operator, and pursuant to Section 6.01 of this Agreement, approved in writing by Lessee.
(7) "Books and Records" shall have the meaning set for in Section 9.01(a).
(8) "Code" shall have the meaning set forth in Section 3.04.
(9) "Concentration Account" shall have the meaning set forth in Section 8.01(b).
(10) "Contract Commencement Date" means the date hereof in the case of the Hotels listed on Exhibit A and a date agreed upon by the parties in the case of other Hotels.
(11) "CPI" shall mean the Consumer Price Index - Seasonably Adjusted U.S. City Average for All Items for All Wage Earners and Clerical Earners (1982-1984 = 100), published monthly in the Monthly Labor Review by the Bureau of Labor Statistics of the United States Department of Labor (the "CPI-W"). If the CPI-W is discontinued, CPI shall mean the Consumer Price Index - - Seasonably Adjusted U.S. City Average for All Items for All Urban Consumers (1982 - 1984 = 100) (the "CPI-U"). If both the CPI-W and CPI-U are discontinued, comparable statistics on the purchasing power of the consumer dollar published the Bureau of Labor Statistics or any other agency of the United States government shall be used.
(12) "Deposit Account" shall have the meaning set forth in Section 8.01(a).
(13) "Disbursement Account" shall have the meaning set forth in Section 8.01(c).
(14) "Employment Claim" shall mean set forth in Section 5.05.
(15) "Employment Laws" shall have the meaning set forth in Section 4.02(c).
(16) "Environmental Activity" shall have the meaning set forth in Section 5.06(a).
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(17) "Environmental Laws" shall mean: (i) the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. Sections 9601 et seq.), as amended; (ii) the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act (42 U.S.C. Sections 6901 et seq.), as amended; (iii) the Emergency Planning and Community Right to Know Act (42 U.S.C. Sections 11001 et seq.), as amended; (iv) the Clean Air Act (42 U.S.C. Sections 7401 et seq.), as amended; (v) the Clean Water Act (33 U.S.C. Sections 1251 et seq.), as amended; (vi) the Toxic Substances Control Act (15 U.S.C. Sections 2601 et seq.), as amended; (vii) the Hazardous Materials Transportation Act (49 U.S.C. Sections 1801 et seq.), as amended; (viii) the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Sections 136 et seq.), as amended; (ix) the Safe Drinking Water Act (42 U.S.C. Sections 300f et seq.), as amended; (x) any state, county, municipal or local statutes, laws or ordinances similar or analogous to the federal statutes listed in parts (i) - (ix) of this definition; (xi) any rules, regulations, guidelines, directives, orders or the like adopted pursuant to or to implement the statutes, laws, ordinances and amendments listed in parts (i) - (x) of this definition; and (xii) any other law, statute, ordinance, amendment, rule, regulation, or order relating to environmental matters or Hazardous Materials.
(18) "Environmental Activity" shall mean any past, present or future storage, holding, existence, release, threatened release, emission, discharge, generation, processing, use, abatement, disposition, handling, transportation or reporting of any Hazardous Substance in violation of any applicable Environmental Laws at, from, under, into or on the Hotel, or otherwise relating to the Hotel or the current or former ownership, use, operation or occupancy thereof, or the threat of any such activity.
(19) "Event(s) of Default" shall mean one or more of the events or occurrences listed in Section 17.01 of this Agreement.
(20) "FF&E" means all furniture, furnishings, equipment, fixtures, apparatus and other personal property used in, or held in storage for use in, the operation of the Hotel, other than Operating Equipment, Operating Supplies and fixtures attached to and forming part of the Hotel.
(21) "First Mortgage" shall mean collectively any mortgage or deed of trust hereafter, from time to time, encumbering in a first lien position all or any portion of a Property, together with all other instruments evidencing or securing payment of the indebtedness secured by such mortgage or deed of trust and all amendments, modifications, supplements, extensions, and revisions of such mortgage, deed of trust and other instruments.
(22) "Fiscal Year" shall mean the twelve (12) month calendar year ending December 31, except that the first Fiscal Year and the last Fiscal Year of the term of this Agreement may not be full calendar years.
(23) "Franchisors" shall mean the franchisors under the Franchisor Agreements.
(24) "Franchisor Agreements" shall mean the franchise license agreements held by Lessee with respect to each of the Hotels as set forth in Exhibit B as it may be amended from time to time.
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(25) "Gross Hotel Income" shall mean all income and proceeds of sales of every kind (whether in cash or on credit and computed on an accrual basis) received by Operator for the use, occupancy or enjoyment of the Hotel or for the sale of any goods, services or other items sold on or provided from the Hotel in the ordinary course of the Hotel operation including, without limitation, all income received from tenants, transient guests, lessees (other than communications equipment lessees or service providers), licensees and concessionaires and other services to the Hotel guests, and the proceeds from business interruption insurance, but excluding the following: (i) any excise, sales or use taxes or similar government charges collected directly from patrons or guests, or as a part of the sales price of any goods, services or displays, such as gross receipts, admission, cabaret or similar or equivalent taxes; (ii) receipts from condemnation awards or sales in lieu of or under threat of condemnation; (iii) proceeds of insurance (other than business interruption insurance); (iv) other allowances and deductions as provided by the Uniform System in determining the sum contemplated by this definition, by whatever name, it may be called; (v) adjustments made pursuant to Section 10.04; (vi) proceeds of sales whether dispositions of capital assets, furniture and equipment or operating equipment (other than sales of inventory in the ordinary course of business); (vii) gross receipts received by lessees, licensees or concessionaires of the Hotel; (viii) consideration received at the Hotel for hotel accommodations, goods and services to be provided at other hotels although arranged by, for or on behalf of, Operator; (ix) gratuities collected for the benefit of employees; (x) proceeds of any financing; (xi) working capital provided by Lessee; (xii) any funds provided by Lessee to Operator whether for Operating Expenses or otherwise; and (xiii) other income or proceeds resulting other than from the use or occupancy of the Hotel, or any part thereof, or other than from the sale of goods, services or other items sold on or provided from the Hotel in the ordinary course of business.
(26) "Gross Operating Loss" shall mean for any Accounting Period the amount by which Operating Expenses exceed Gross Hotel Income.
(27) "Gross Operating Profit" shall mean Gross Hotel Income less Operating Expenses.
(28) "Group Services" means services provided to all Hotels.
(29) "Hazardous Substance" shall mean any chemical, substance, waste, material, equipment or fixture defined as or deemed hazardous, toxic, a pollutant, a containment, or otherwise regulated under any Environmental Law, including, but not limited to, petroleum and petroleum products, waste oil, halogenated and non-halogenated solvents, PCBs, and asbestos and asbestos containing materials.
(30) "Holder" shall mean the holder of any First Mortgage and the indebtedness secured thereby, and such holder's successors and assigns.
(31) "Hotel Capital Budget" shall mean the budget relating to capital expenditures at a Hotel which shall be prepared and administered by Owner as described in Section 6.01.
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(32) "Hotel Operating Budget" shall mean the operating budget relating to the operation of a Hotel for each Fiscal Year prepared by Operator and submitted to Lessee for approval pursuant to Section 6.01.
(33) "Hotel Operating Equipment" shall mean linens, chinaware, glassware, uniforms, utensils and other items of similar nature as Operator shall reasonably determine to be appropriate.
(34) "Hotel Operating Supplies" shall mean the initial inventories of paper supplies, cleaning materials and similar consumable items.
(35) "Hotel Standards" shall mean the standards established by the respective Franchisors of the Hotels from time to time.
(36) "Hotels" shall mean the hotel properties described in Exhibit A hereto, as it may be amended from time to time by mutual agreement of Lessee and Operator to add hotel properties or to delete hotel properties as a result of termination of this Agreement with respect to one or more hotel properties pursuant to the termination provisions set forth in Section 2.01 of this Agreement. "Hotel" shall mean any hotel set forth on Exhibit A as it may be amended from time to time.
(37) "Independent CPA" shall mean the firm of independent public accountants having hotel experience which is selected by Lessee from time to time.
(38) "Land" shall mean the real property described in Exhibit A to the Lease.
(39) "Lease" shall mean collectively the leases between Barclay Hospitality Services Inc. and WINN Limited Partnership and those between Winston SPE LLC and Barclay Hospitality Services Inc., all acquired by Lessee pursuant to a Leasehold Acquisition Agreement, dated as of June 28, 2002 from Capstar Winston Company, LLC together with the leases acquired by Lessee from Bristol W Tenant Company with respect to the Hampton Inn in Las Vegas and the Hilton Garden Inn in Windsor, Connecticut.
(40) "Lessee" shall mean Barclay Hospitality Services Inc., a North Carolina corporation and its successors and assigns.
(41) "Marketing Plan" shall mean the marketing plan prepared by Operator and approved by Lessee for each Hotel for each Fiscal Year pursuant to Section 3.04(b).
(42) "Noble" shall mean Noble Investment Group, Ltd., a North Carolina corporation, or any successor in interest thereto.
(43) "Operating Expenses" shall mean all reasonable costs and expenses of maintaining, conducting and supervising the operation of the Property, subject to the limitations set forth in an Approved Budget, incurred pursuant to this Agreement or as otherwise specifically provided herein which are properly attributable to the period under consideration under Lessee's system of accounting, including without limitation:
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(i) the cost of all food and beverages sold or consumed and of all Hotel Operating Equipment and Hotel Operating Supplies;
(ii) salaries and wages of Hotel personnel, including costs of payroll taxes and employee benefits and all other expenses not otherwise specifically referred to in this Section which are referred to as "Administrative and General Expenses" in the Uniform System. Except as herein otherwise expressly provided with respect to employees regularly employed at the Hotel, the salaries or wages of other employees or executives of Operator, or any Affiliate shall in no event be Operating Expenses;
(iii) the cost of all other goods and services obtained by Operator in connection with its operation of the Property including, without limitation, heat and utilities, office supplies and all services performed by third parties, including leasing expenses in connection with telephone and data processing equipment and such other equipment as Owner shall designate;
(iv) the cost of repairs to and maintenance of the Property to keep the Property in good condition;
(v) insurance premiums for all insurance maintained by Lessee or Operator as provided in Article XII with respect to the Property, including without limitation, property damage insurance, public liability insurance, workers' compensation insurance or insurance required by similar employee benefits acts and such business interruption or other insurance as may be provided for protection against claim, liabilities and losses arising from the use and operation of the Hotel and losses incurred with respect to deductibles applicable to the foregoing types of insurance;
(vi) all taxes, assessments and other charges (other than federal, state or local income taxes and franchise taxes or the equivalent) payable by or assessed against Operator or Lessee with respect to the operation of the Hotel and water and sewer charges;
(vii) legal fees;
(viii) the costs and expenses of technical consultants and specialized operational experts for specialized services in connection with non- recurring work on operational, functional, decorating, design or construction problems and activities, including the reasonable fees of Operator or any Affiliate in connection therewith, provided that such employment of Operator or such Affiliate is approved in advance by Lessee;
(ix) all expenses for marketing the Hotel, including all expenses of advertising, sales promotion and public relations activities;
(x) the Operator's Expenses;
(xi) the Operator's Basic Fee;
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(xii) ad valorem taxes, personal property taxes, utility taxes and other taxes (as those terms are defined in the Uniform System) and municipal, county and state license and permit fees;
(xiii) all fees, assessments and charges due and payable under the franchise license agreement for the Hotel;
(xiv) reasonable reserves for uncollectible accounts receivable;
(xv) credit card fees, travel agent commissions and other third party reservation fees and charges;
(xvi) all parking charges and other expenses associated with revenues received by the Hotels related to parking operations, including valet services; and
(xvii) common expenses charges.
Operating Expenses shall not include (a) depreciation and amortization except as otherwise provided in this Agreement; (b) the cost of any other things specified herein to be done or provided at Lessee's or Operator's sole expense; (c) debt service on any Mortgage; (d) any Operator's Incentive Fee; (e) capital repairs and other expenditures which are normally treated as capital expenditures under the Uniform System or generally accepted accounting principles; (f) other recurring or non-recurring ownership costs such as partnership administration and costs of changes to business and liquor licenses.
(44) "Operating Term" shall mean, with respect to any Hotel, the term of this Agreement as set forth in Section 2.01.
(45) "Operator" shall mean Alliance Hospitality Management LLC, a [Georgia] limited liability company.
(46) "Operator Centralized Services" shall have the meaning set forth in Section 21.12.
(47) "Operator Indemnitees" shall have the meaning set forth in Section 17.1 of this Agreement.
(48) "Operator Investment" shall mean the required investment (capital contribution) in Operator under the Operating Agreement for Alliance Hospitality Management LLC
(49) "Operator Paid Amounts" shall have the meaning set forth in Section 8.01(c).
(50) "Operator's Basic Fee" shall mean a fee to equal to two and one-quarter percent (2.25%) of Gross Hotel Income for each Fiscal Year of the Operating Term, which is payable and subject to adjustment as set forth in Section 10.01.
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(51) "Operator's Expenses" shall mean the out-of-pocket expenses and disbursements which are reasonably and necessarily incurred by Operator in the performance of its obligations under this Agreement, all of which expenses shall have been set forth in the Approved Budget. Operator's Expenses may include reasonable travel, business entertainment, telephone, telegram, postage, air express and other incidental expenses, but shall not include, except as herein otherwise expressly provided, the salaries and wages of employees or executives of Operator or of any Affiliate performing services or work in connection with the operation of a Hotel; provided that traveling and other direct expenses incurred by them in connection with the management of a Hotel, including living expenses incurred during travel, shall be considered Operator's Expenses to the extent that they have been identified by category and included in the Approved Budget.
(52) "Operator's Incentive Fee" shall mean a fee to be established by agreement between Operator and Lessee pursuant to Section 10.02.
(53) "Owners" shall mean the entities described on Exhibit A as it may be amended from time to time as the owners of the Hotels. "Owner" shall mean any entity described on Exhibit A as it may be amended from time to time.
(54) "Owner Indemnitees" shall have the meaning set forth in Section 17.2 of this Agreement.
(55) "Property" shall mean the Land, the Hotels, all real and personal property now or hereafter situated upon the Land and all appurtenant rights and easements thereto.
(56) "Rebates" shall have the meaning set forth in Section 21.11.
(57) "REIT" shall mean Winston Hotels, Inc. and its successors and assigns.
(58) "REIT Hotels" shall mean, initially, the hotels owned by Affiliates of the REIT which will be managed by Operator effective on or about July 1, 2003, as set forth on Exhibit D and any additional hotels owned by the REIT or its Affiliates and managed by Operator from time to time in the future.
(59) "Sale of a Hotel" shall have the meaning set forth in Article XVI.
(60) "Space Lease" shall mean any lease for space at a Hotel.
(61) "Termination Date" shall mean the date that this Agreement terminates, whether pursuant to the expiration of the term or otherwise.
(62) "Termination Fee" shall have the meaning set forth in Section 22.09 of this Agreement.
(63) "Uniform System" shall mean the "Uniform System of Accounts for Hotels" (9th Revised Edition, 1996), as published by the American Hotel and Motel Association, as it may be amended from time to time, with such exceptions as may be required by the
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provisions of this Agreement (including without limitation the definitions of Gross Hotel Income, Gross Operating Profit and Operating Expenses).
(64) "Unrelated Person" shall have the meaning set forth in Section 22.11.
(b) Terms with initial capital letters which appear within the foregoing definitions are defined in this Article I or as indicated in this Agreement.
ARTICLE II
TERM OF AGREEMENT
Section 2.01. Term.
(a) The term of this Agreement (the "Operating Term") shall commence at 12:01 AM on the Contract Commencement Date and shall terminate at 11:59 PM on June 30, 2008, subject to earlier termination as to one or more Hotels at any time as set forth below.
(b) This Agreement may be terminated by Lessee without a fee (except the Termination Fee, if applicable) as to one or more Hotels at any time and from time to time by delivery of written notice to Operator not less than ninety (90) days prior to the effective date of termination which notice shall set forth (i) the effective date of termination, and (ii) the Hotel or Hotels with respect to which this Agreement is being terminated. Termination by Lessee pursuant to this Section 2.01(b) shall be subject to the provisions of Section 22.09 of this Agreement. Subject to the provisions of 22.21(g), this Agreement may be terminated by Operator at any time by delivery of written notice to the Lessee not less than six (6) months prior to the effective date of termination which notice shall set forth the effective date of termination. Notwithstanding the foregoing, in the event Lessee (i) transfers its rights under this Agreement to an entity that is not an Affiliate of Lessee or (ii) a change of control whereby a current Affiliate no longer controls Lessee, then Operator shall have the right to terminate this Agreement upon thirty (30) days written notice to Lessee.
ARTICLE III
ENGAGEMENT OF MANAGER AND OPERATION O...
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