MANAGEMENT AGREEMENT for the CHICAGO O'HARE IN PDF
Preview MANAGEMENT AGREEMENT for the CHICAGO O'HARE IN
[NOTE, WECURRENTLYCONTEMPLATESEPARATE MANAGEMENTAGREEMENTS FOREACHHOTEL.] MANAGEMENTAGREEMENT forthe CHICAGO O’HAREINTERNATIONAL AIRPORT HOTELS betweenthe CITYOFCHICAGODEPARTMENTOFAVIATION and ______________________________________ DATED: ______________ 4848-5250-6424.14 TABLE OFCONTENTS Page Section1. AGENCY;CONSTRUCTION;FURNISHING ANDEQUIPPING; OPENINGOFHOTEL...........................................................................................2 1.1 Agency....................................................................................................................2 1.2 Hotels......................................................................................................................2 1.3 Furnishings andEquipment;OperatingEquipment................................................3 1.4 “ExistingHotel,NewHotelandBrandStandards” Defined..................................3 1.5 Budgets...................................................................................................................5 1.6 Sustainability...........................................................................................................9 Section2. RESERVED............................................................................................................9 Section3. TERM;TERMINATION........................................................................................9 3.1 Effective Date.........................................................................................................9 3.2 OpeningDate..........................................................................................................9 3.3 Term......................................................................................................................10 3.4 TerminationbyOwner..........................................................................................10 3.5 TerminationbyManager.......................................................................................15 3.6 OwnerTerminationRight.....................................................................................17 3.7 Cancellation..........................................................................................................18 3.8 EventsofDefault..................................................................................................19 3.9 GeneralProvisionsRegardingTermination..........................................................22 3.10 Owner’sRighttoPerformManager’s Obligations...............................................23 3.11 EffectofDefaultandRemedies............................................................................24 3.12 ClaimsandDisputesbyManager.........................................................................25 Section4. USEANDOPERATIONOFTHEHOTELS......................................................28 4.1 Useand StandardofOperation.............................................................................28 4.2 Transactions withRelatedPersons, ManagerAffiliates,&Third Partiesin whichManagerhas anEconomicInterest............................................................29 4.3 HotelEmployees...................................................................................................31 4.4 LimitationsonManager’s Authority....................................................................34 4.5 ScopeofAuthority/Manager’sDuties..................................................................37 4.6 LimitationsonManager’s Duties..........................................................................39 4.7 LeasesandConcessions........................................................................................40 4.8 BankAccounts......................................................................................................41 4.9 “ForceMajeure”Defined......................................................................................43 Section5. MANAGEMENT FEESANDREMITTANCESTOOWNER...........................44 5.1 Reserved–tocomefromselectedproposal.........................................................44 ii 4848-5250-6424.14 Section6. BOOKSANDRECORDS;GROSSRECEIPTS;FF&E FUND.........................44 6.1 Books andRecords...............................................................................................44 6.2 DefinitionofGross Receipts.................................................................................44 6.3 FundsforReplacementofandAdditionsto FurnishingsandEquipment andotherCapitalExpenditures(FF&E Funds)....................................................45 Section7. REPAIRSANDCHANGES; LEGALREQUIREMENTS;RETAINED RIGHTSOFCITY................................................................................................47 7.1 Repairsand Maintenance......................................................................................47 7.2 Compliancewith LegalRequirements..................................................................47 7.3 Alterations andAdditions.....................................................................................47 7.4 RighttoEnter, InspectandRepair........................................................................48 7.5 AccommodationofAirportConstruction.............................................................48 7.6 EminentDomain...................................................................................................49 Section8. GENERALCOVENANTSOFMANAGER ANDOWNER..............................50 8.1 WorkingCapital....................................................................................................50 8.2 Supplemental Services..........................................................................................50 8.3 Rightof Inspectionand Review............................................................................53 8.4 FinancialandOtherReports.................................................................................53 8.5 PaymentofTaxes..................................................................................................56 8.6 OwnerSuppliedUtilities.......................................................................................56 8.7 Warranties andRepresentations............................................................................56 Section9. INSURANCE........................................................................................................60 9.1 OwnerInsurance...................................................................................................60 9.2 Manager Insurance................................................................................................60 Section10. INDEMNIFICATIONOFOWNER.....................................................................60 Section11. INDEMNIFICATIONOFMANAGER...............................................................62 Section12. DAMAGETOANDDESTRUCTIONOFHOTEL............................................63 12.1 Owner’s DutyofRestoration................................................................................63 12.2 Owner’sElectionNottoRestore..........................................................................63 12.3 EminentDomain...................................................................................................64 12.4 Pro-rationof ManagementFees............................................................................64 Section13. INTERESTONOVERDUESUMS.....................................................................64 Section14. TRADENAME....................................................................................................64 14.1 ManagerTradeNameandTrademarks.................................................................64 iii 4848-5250-6424.14 14.2 OwnerTradeNameand Trademarks....................................................................66 Section15. COMPLIANCE WITHALLLAWS....................................................................66 15.1 ApplicableLaws...................................................................................................66 15.2 Ethics/ConflictsofInterest...................................................................................81 15.3 Conflicts ofInterest...............................................................................................82 15.4 AffirmativeActionProgram.................................................................................82 15.5 Manager’sACDBECommitment.........................................................................82 15.6 NoPersonalLiabilityof Agents...........................................................................83 15.7 BusinessRelationships..........................................................................................84 15.8 FederalTerrorist(No-Business)List....................................................................84 15.9 ProhibitiononCertainContributions;MayoralExecutiveOrder No.2011- 04...........................................................................................................................84 15.10 Minimum Wage....................................................................................................86 Section16. SUCCESSORSANDASSIGNS..........................................................................87 16.1 AssignmentbyManager.......................................................................................87 16.2 AssignmentbyOwner...........................................................................................88 16.3 Bindingon Successors..........................................................................................90 Section17. NOTICES..............................................................................................................90 Section18. APPROVALS.......................................................................................................91 Section19. MISCELLANEOUSINSTRUMENTSANDESTOPPEL CERTIFICATES...................................................................................................91 19.1 Miscellaneous Instruments....................................................................................91 19.2 EstoppelCertificates.............................................................................................92 Section20. APPLICABLELAW............................................................................................92 Section21. PAYMENTOFAMOUNTSDUETOOWNER ORMANAGER.....................92 Section22. SURVIVALANDCONTINUATION.................................................................92 Section23. MANAGER APPROVALS..................................................................................92 Section24. SALEOFSECURITIES.......................................................................................93 Section25. TRANSITIONMATTERS...................................................................................94 25.1 Employment Matters.............................................................................................94 25.2 Insurance...............................................................................................................94 25.3 Receivables...........................................................................................................94 25.4 ProtectedNameandProtected Marks...................................................................95 iv 4848-5250-6424.14 25.5 OtherProprietaryInterests....................................................................................95 25.6 ServiceContracts..................................................................................................96 25.7 Reserved................................................................................................................96 25.8 TransitionNotices.................................................................................................96 25.9 Paymentsto Manager............................................................................................96 25.10 ReserveforPost-TerminationCosts.....................................................................96 25.11 FinalAccounting;Distributions............................................................................97 Section26. REPRESENTATIONSAND WARRANTIESOFOWNER AND MANAGER..........................................................................................................97 26.1 RepresentationsofOwner.....................................................................................97 26.2 RepresentationsofManager.................................................................................98 Section27. LIMITATIONSONOWNER’SLIABILITY......................................................99 Section28. NON-COMPETITION.........................................................................................99 Section29. ENVIRONMENTAL..........................................................................................101 29.1 Definitions...........................................................................................................101 29.2 EnvironmentalLaws...........................................................................................103 29.3 SubjectMaterials and SurrenderofHotels.........................................................103 29.4 EnvironmentalRepresentationsand WarrantiesandOther Matters...................103 29.5 Reports,Notices,EnvironmentalClaims,andOtherMatters.............................104 29.6 HazardousSubstances.........................................................................................105 29.7 No IllegalDumping............................................................................................106 Section30. IRSGUIDELINES..............................................................................................106 30.1 QMACompliance...............................................................................................106 30.2 Compliancewith IRSGuidelines........................................................................107 30.3 ConsequencesofCompliance Failures...............................................................107 30.4 DeterminationofQMAFailureorContinuingComplianceFailure..................108 30.5 Manager’sRightstoCure...................................................................................108 30.6 Manager’sRightstoParticipateinProceedings.................................................109 30.7 ProvisionofInformationtoOwner.....................................................................109 Section31. MISCELLANEOUSPROVISIONS...................................................................109 31.1 SubmissiontoJurisdiction..................................................................................109 31.2 NoThird-PartyBeneficiaries..............................................................................110 31.3 EntireAgreement;Document Precedence..........................................................110 31.4 Written Amendments..........................................................................................110 31.5 Counterparts; FacsimileandElectronicExecution.............................................110 31.6 Severability.........................................................................................................110 31.7 Non-Waiver.........................................................................................................110 31.8 SectionReferences;TableofContents...............................................................111 v 4848-5250-6424.14 31.9 Approvals;Authorityof Commissioner..............................................................111 31.10 Manager IntellectualProperty.............................................................................111 31.11 WaiverofConsequential andPunitiveDamages................................................111 31.12 Non-Hotel MarketingActivitiesbyOwner........................................................112 31.13 Owner Financingof Hotel..................................................................................112 31.14 Illinois Freedomof InformationAct...................................................................114 31.15 AirportMatters....................................................................................................115 31.16 DataSecurityand Privacy...................................................................................116 31.17 Confidentiality....................................................................................................116 31.18 NoPersonalLiability..........................................................................................117 31.19 LimitationofCity’s Liability..............................................................................117 31.20 JointandSeveral Liability..................................................................................117 vi 4848-5250-6424.14 EXHIBITS ExhibitA–LegalDescriptionof Site ExhibitB–BrandStandards ExhibitC-1–Listingof CurrentChainServices ExhibitC-2–Listingof Direct Deductions ExhibitC-3–Listingof CentralOfficeServices ExhibitD–AssistanceAgenciesforIdentifyingMBE/WBEs ExhibitE–Manager’s EqualEmployment OpportunityandAffirmativeActionPolicy ExhibitF–Contracting Guidelines Exhibit G–EconomicDisclosureStatementandAffidavit Exhibit H–DataPrivacyandSecurityRequirements Exhibit I – FAA Policy and Procedures Memorandum –Airport Division, Number5190.6 – Covenants ExhibitJ–InsuranceRequired Exhibit K–SpecialConditionsRegardingACDBE Participation ExhibitL–Formof CashManagementAgreement vii 4848-5250-6424.14 DEFINITIONS 2014CityHiringPlan...................................................................................................................33 ACDBE.........................................................................................................................................83 AchievedRevPAR........................................................................................................................10 ADA..............................................................................................................................................69 AdvanceDepositAccount............................................................................................................42 Affiliate.........................................................................................................................................88 Agreement.......................................................................................................................................1 Airport.............................................................................................................................................1 AirportSecurityAct......................................................................................................................81 AlcoholicBeverageAccount........................................................................................................42 AnnualBudgets...............................................................................................................................6 AnnualOperatingStatement.........................................................................................................55 AnnualProfitTransactionsReport...............................................................................................31 Artwork.........................................................................................................................................78 Bonds..........................................................................................................................................113 BrandHotels...................................................................................................................................5 BrandStandards..............................................................................................................................4 Bundle...........................................................................................................................................86 Businessday..................................................................................................................................94 CancellationNotice.......................................................................................................................19 CapitalBudget................................................................................................................................5 CapitalExpenditures.......................................................................................................................9 CapitalPlan.....................................................................................................................................8 Certified FinancialStatement.......................................................................................................55 ChainServices..............................................................................................................................51 ChainServicesReport...................................................................................................................51 City..................................................................................................................................................1 CityApprovals............................................................................................................................112 CityDisclosureAffidavit..............................................................................................................78 CityPersons................................................................................................................................115 Claim.............................................................................................................................................25 Commissioner...............................................................................................................................22 ComparableHotels........................................................................................................................10 CompetitiveTerms Standard........................................................................................................30 ContinuingComplianceFailure..................................................................................................108 Contribution..................................................................................................................................86 CopyrightAct................................................................................................................................78 Council..........................................................................................................................................34 CPI..................................................................................................................................................7 Data.............................................................................................................................................117 day-to-dayOperatingExpenses..................................................................................................100 Debt...............................................................................................................................................77 DefaultingParty............................................................................................................................20 viii 4848-5250-6424.14 Delivered Materials.....................................................................................................................115 Department............................................................................................................................74,108 DirectDeduction...........................................................................................................................52 DirectDeductionsReport.............................................................................................................52 Dispute..........................................................................................................................................27 DomesticPartners.........................................................................................................................86 EDS...............................................................................................................................................79 EEO...............................................................................................................................................36 Effective Date.................................................................................................................................1 EmployeeCosts............................................................................................................................31 EnvironmentalAgency...............................................................................................................102 EnvironmentalClaim..................................................................................................................102 EnvironmentalLaw(s)................................................................................................................102 EnvironmentalLaws.....................................................................................................................62 ERISA...........................................................................................................................................61 EventsofDefault..........................................................................................................................19 ExcessSustainabilityCosts.............................................................................................................9 ExecutiveOrder2014-1................................................................................................................87 ExistingContamination..............................................................................................................103 ExistingHotel.............................................................................................................................1,3 ExistingHotel FF&E......................................................................................................................3 Expert............................................................................................................................................11 ExtensionTerm.............................................................................................................................10 FAA.............................................................................................................................................116 FF&E...............................................................................................................................................3 FF&EExpenditure........................................................................................................................46 FF&E Funds..................................................................................................................................45 FinalAccountingStatement..........................................................................................................98 FinalAudits...................................................................................................................................56 Financing.......................................................................................................................................19 FiscalYear......................................................................................................................................5 ForceMajeure...............................................................................................................................44 ForceMajeureCause....................................................................................................................44 Foreclosure....................................................................................................................................18 ForeclosurePurchaser...................................................................................................................18 FringeBenefits..............................................................................................................................31 Furnishings andEquipment............................................................................................................3 GOPDeficiency............................................................................................................................12 GrossReceipts..............................................................................................................................45 HotelEmployees...........................................................................................................................31 HotelGOP.....................................................................................................................................12 HotelGross Receipts Account......................................................................................................41 HotelMain OperatingAccount.....................................................................................................42 HotelOperatingAccounts.............................................................................................................42 HumanRightsOrdinance..............................................................................................................74 IdentifiedParties...........................................................................................................................85 ix 4848-5250-6424.14 IL FOIA......................................................................................................................................115 IllinoisHumanRights Act............................................................................................................74 Improvements.................................................................................................................................3 Indenture.....................................................................................................................................113 InformationSource.......................................................................................................................13 InitialTerm...................................................................................................................................10 InterveningEvent..........................................................................................................................14 InterveningEvents........................................................................................................................14 IRC........................................................................................................................................53,108 IRSGuidelines............................................................................................................................108 Law(s).........................................................................................................................................103 Laws..............................................................................................................................................67 LegalRequirements......................................................................................................................48 Lender(s).......................................................................................................................................19 LEP...............................................................................................................................................76 Liabilities......................................................................................................................................61 LPA...............................................................................................................................................35 MajorRefurbishingProgram........................................................................................................47 Manager....................................................................................................................................1,69 Manager Assignment....................................................................................................................88 Manager IntellectualProperty.....................................................................................................112 Manager Proposal...........................................................................................................................1 ManagerReviewPeriod..............................................................................................................115 Manager’sGrossNegligenceor WillfulMisconduct...................................................................62 Marks............................................................................................................................................67 Mayor............................................................................................................................................85 NewHotel...................................................................................................................................1,3 NewHotel FF&E............................................................................................................................3 NewHotel Improvements...............................................................................................................3 Non-CompetitionArea................................................................................................................101 Non-DefaultingParty....................................................................................................................20 Non-Routine................................................................................................................................103 OFAC............................................................................................................................................37 OpeningDate................................................................................................................................10 OperatingEquipment......................................................................................................................3 OperatingExpenses......................................................................................................................13 OperatingThreshold.....................................................................................................................43 ORD................................................................................................................................................1 OSHA............................................................................................................................................80 OtherContract...............................................................................................................................86 outstandingparkingviolationcomplaint......................................................................................77 Owner..............................................................................................................................................1 OwnerCollateral.........................................................................................................................100 OwnerData.................................................................................................................................112 Owners..........................................................................................................................................85 Parties..............................................................................................................................................1 x 4848-5250-6424.14
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