Management Agreement

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<p>COURTYARD HOTEL OLEYASTREET RIYADH, KINGDOM OFSAUDI ARABIA MANAGEMENT AGREEMENT by andbetween MARRIOTT HOTELS INTERNATIONAL B.V. (as "MANAGER") and EXECUTION COPY FA WAZ ABDUL AZIZ AL HOKAIR AND ASSOCIATES HOTELS COMPANY LLC (as "OWNER") Datedas of May _ , 2007 TABLE OF CONTENTS Page ARTICLE IMANAGEMENT OF THE HOTEL 1.01CONSTRUCTION OF THE IMPROVEMENTS . ........ . ..... ........... .. ....................................... 2 1.02MANAGEMENT RESPONSIBILITIES ............................ .... . ... .. ... .. ..... . ....... . ... ... .. .... .. .... .. 2 1.03HOTEL EMPLOYEES ................................... .. ... . ...... .. . ......... .. ....... ... ................ .. .. ... .... .4 1.04OWNER'S RIGHT TO INSPECT .......... ........ .. . ... ......... .... ................................................ 5 1.05REGULAR MEETINGS....... ........................................ .. ................ . ........... ............... .... 5 1.06SYSTEMSTANDARDS................................. ... ......... .. .. .. ... ..... .. .. ... ..... . ... ..... .. . ....... .. ... .5 1.07CENTRAL OFFICE SERVICES ............ . .......... .. ........... ............... . ................ .. ............... . 6 ARTICLE IITERM 2.01TERM ............ . ................................... .. .. ..... .. .... ........ .. ........................... . ... .. .............. 6 2.02PERFORMANCE TEST ...................... ..... .......... ...................... ... ....... ........ . .................. . 6 ARTICLE IIICOMPENSATION OF MANAGER 3.01MANAGEMENT FEE ..... ...................... ......... . ... ... ............................. .. .......... ............... 8 3.02BASE ROYALTY........... ..... . .. ... . ................................... .. ................... .. ......... .............. 8 3.03DISTRIBUTION OFOPERATING PROFIT ............ ....... . ......................... . ..... ... ...... ......... . 8 ARTICLE IVACCOUNTING MATTERS 4.01ACCOUNTING, DISTRIBUTIONS AND ANNUAL RECONCILIATION ............................... 8 4.02BOOKS AND REcORDs ...... .. .. .... .. .... .. ....................................................................... 10 4.03ACCOUNTS, EXPENDITURES ................... .. ...... ... .. . .......... .. ......................... . ... .. ...... . . 11 4.04BUSINESS PLAN.... ... ..... . ..... . ... . ... ... .... ... ... ............................... .. ......... ..................... 12 4.05CURRENCy .................... .. ................................... ... ...... . .. .. ............... . .. : ... .. ....... .. ... ... 12 4.06WORKING CAPITAL ... ... ... ..................... ... ..... . ..... ............ ... ...................................... 13 4.07FIXED ASSET SUPPLIES ............... .. .......... .. ..... ...... .. ........ .. ........ ............. . ......... ... ..... 13 4.08IMPOSITIONS. ...... . .............. .... .... .. .. .. .......... . .................... ... ....... .. ......... ............ .. ..... 14 ARTICLE VREPAIRS, MAINTENANCE ANDREPLACEMENTS 5.01REPAIRS AND MAINTENANCE COSTS THAT ARE EXPENSED...... .. .......... .. .... ... ... .. .. . 14 5.02FF&amp;E RESERVE .................................................................... ...... .. .. . ...... ... ........... . .. 14 5.03CAPITAL EXPENDITURES ............................... .. ........ .. .. .. . ... ......... ............. .. ............. . 17 5.04OWNERSHIP OF REPLACEMENTS... ............ ... ........................................... ............... . 18 ARTICLEVIINSURANCE (i) TABLE OF CONTENTS Page 6.01PROPERTY INSURANCE ......................................................................... .. ................. 18 6.02OPERATIONAL INSURANCE .................................................................... .. ...... ...... .... 21 6.03GENERAL CONDITIONS OF MANAGER'S INSURANCE PROGRAM .............................. 22 ARTICLE VIIDAMAGE, REPAIR ANDCONDEMNATION 7.01DAMAGE AND REPAIR .................................. .......... .... ............................................. 23 7 .02CONDEMNATION ........................................ ... ... ......... ................... ..... ..... ..... ............ 23 ARTICLE VIIIOWNERSHIP OF THE HOTEL 8.01INTEREST INTHE HOTEL................ .. .. ........................ .. ................ .. ........ .. ............... 24 8.02MORTGAGES ................................................................................ ........................... 25 8.03SUBORDINATION,NON-DISTURBANCE AND A TIORNMENT ............ ......................... 26 8.04No COVENANTS, CONDITIONS OR RESTRICTIONS.......................... .. ....................... 27 8.05LIENS;CREDIT .................................................................... ... ................................. 27 8.06AMENDMENTS REQUESTED BY MORTGAGEE ............ .. ............................................ 28 ARTICLE IXDEFAULTS 9.01EVENTSOF DEFAULT ...................................... .. ................... .... ...... .... ..................... 28 9.02REMEDIES ...................... ... ................. ..................................................................... 3 0 9.03ADDITIONAL REMEDIES .............................................. .. , ................ ......................... 30 9 .04EXTRAORDINARYEVENTS.............................. ..... .......... .... ............ ........... .............. 31 ARTICLE XASSIGNMENT ANDSALE 10.01ASSIGNMENT ..................................... ............... .. ............................... .. ................... .31 10.02SALE OF THE HOTEL ............................... ............ ......................................... .. ......... .32 ARTICLE XIMISCELLANEOUS 11.01RIGHT TOMAKE AGREEMENT................................................................................ 35 11.02CONSENTSANDCOOPERATION............................................................................... 35 11. 03RELATIONSHIP........................................................................................................ 3 5 11.04APPLICABLELAW ..................................... ....................... ....................................... 36 11.05ARBITRATION............................. .. ............ ..................... ......................................... 36 11.06RECORDATION.............. .. ............. ........................ .. ............................... .. ....... ........ .36 11.07INTERPRETATION....................... .. ............ ...... ................................................. .. ..... .3 7 11.08NOTICES ................................................... .... ............................ .................. .... ......... 3 7 11.09ENVIRONMENTAL MA TIERS ...................... .............. ...... .. ....................................... 38 11.10CONFIDENTIALlTY...................... ........... ..................................... ........................... .39 (ii) TABLE OF CONTENTS Page 11.11PROJECTIONS.......................................................................... ...... .......................... 39 11.12ACTIONSTOBE TAKEN UPON TERMINA TION ............ .. .. .. .............................. .... ...... 39 11.13TRADEMARKS AND INTELLECTUAL PROPERTY...................................................... .41 11.14COMPETING FACILITIES.................................................. .. .......... ........ ... ........ .. ...... .43 11.15WAIVER ................................................. .. ................................ ...................... .. ...... .43 11.16PARTIAL INVALIDITY .......................................... ..................... ...................... .. ...... .43 11.17SURVIVAL ............................................... ........................ .......... .. .................... .. ..... .43 11.18AFFILIATES............................................. .................................. ......... ............... ...... 44 11.19NEGOTIATION OFAGREEMENT.. ............................................................................. .44 11.20ESTOPPEL CERTIFICATES................................................................... .................... .44 11.21RESTRICTIONSONOPERATING THE HOTEL INACCORDANCE WITHSYSTEM STANDARDS ........................................................................................................... .45 11.22EXPERT DECISIONS ................................................................................................ .45 11.23WAIVER OF CONSEQUENTIAL, INCIDENTAL,SPECIAL ANDPUNITIVE DAMAGES .... .46 11.24COUNTERPARTS ........................................... ......................................................... ..46 11.25ENTIRE AGREEMENT .............................................................................................. .46 11.26CONTINUIG CONDITIONSTO MANAGER'S OBLIGATIONS ........................ .... ............ .46 11.27VALUE ADDED TAX ANDSIMILAR TAXES................................... .. ........ .. .............. .48 11.28COOPERATION ............................................................ .. .......................................... .48 11.29LANGUAGE......................... .. ................. .. .... .. ............ .. .................. .. ...................... .48 11.30NON-COMPETITION .......................... ............. ...................................... .. ... .. ....... ..... .49 11.31SPONSORSHIP ............. .............................................................................. .. ........... ..49 11.32RIGHTSOF THIRD PARTIES .......................................... ........ .................................... 50 11.33COOPERATIONWITH BRANCH ESTABLISHMENT ...................................................... 50 ARTICLE XIIDEFINITION OF TERMS 12.01DEFINITIONOF TERMS.......... .. ............ ........................................... .. ............ .. ........ .50 Exhibit A Exhibit B Exhibit C Exhibit D Exhibit E Addendum Legal Description of the Site Equity Interest in Owner Memorandum of Management Agreement Central Office Services Restricted Area Pre-Commencement (iii) MANAGEMENT AGREEMENT THISMANAGEMENT AGREEMENT("Agreement")isexecutedasof the __ day of May, 2007 ("Effective Date"), by: and FAWAZABDULAZIZALHOKAIRANDASSOCIATESHOTELSCOMPANY LLC("Owner"), a limited liability company organized and existing under thelawsof the Kingdomof SaudiArabia withitsaddressatP.O.Box341904,Riyadh11333,Kingdom of Saudi Arabia; MARRIOTTHOTELSINTERNATIONALB.V.("Manager"),acompanyorganized andexistingunderthelawsof theNetherlandswithitsregisteredofficeatcloCitco, Telestone - Teleport, Naritaweg165,1043BW Amsterdam, The Netherlands. RECITALS A.Owner istheowner of fullfreeholdtitletotheparcelof realproperty(tlle"Site") locatedonOleyaStreetinRiyadh,Kingdomof SaudiArabiaanddescribedonExhibitA. Owner willimprove theSite with a building or buildingscontaining 200Guest Rooms,a lobby, restaurant(s),meetingrooms,administrativeoffices,andcertainoilieramenitiesandrelated facilities(collectively,the"HotelImprovements").TheSiteandtheHotelImprovementstobe constructedthereonbyOwner,inadditiontocertainoilierrights,improvements,andpersonal propertyasmoreparticularlydescribedinthedefinitionof"Hotel"inSection12.01,are collectivelyreferredtoasthe"Hotel."Inaddition,Ownerwillconstructcertainimprovements whicharenot on theSiteincluding,wiilioutlimitation,theEmployee Housing(collectively,the "Off-SiteImprovements")whicharenecessaryfortheHoteltobeoperatedincompliancewith System Standards.TheHotel Improvements and theOff-Site Improvements shall collectively be referred toin this Agreement asthe "Improvements." B.AllcapitalizedtermsusediniliisAgreementshallhavethemeaningsetforthin Section 12.01. C.Owner desirestoengageManager tomanageandoperatetheHotelandManager desires toaccept such engagement upon the terms and conditions set forthinthis Agreement. NOW,THEREFORE,inconsiderationofthemutualcovenantscontainedinthis Agreementandothergoodandvaluableconsideration,thereceiptandsufficiencyof whichare hereby acknowledged,Owner and Manager agree as follows: ARTICLE I MANAGEMENT OF THE HOTEL 1.01Construction ofthe Improvements OwneragreestobuildtheImprovementsinaccordancewiththeTechnicalServices Agreement.OwnerandManageragreethattheirrightsandobligationsunderthisAgreement with respect tothe pre-opening stages ofthe Hotel shall be governed by the Addendum, which is deemedtobeanintegralpartofthisAgreement,inadditiontothoseprovisionsinthis Agreement that are otherwise generally applicable during the Term. 1.02Management Responsibilities A.Uponcompletionoftheconstruction,furnishingandequippingoftheHotel Improvements inaccordance with the Technical Services Agreement, and upon satisfaction of all otherconditionsprecedenttotheoccurrenceof theCommencementDate,Managershall,and Owner hereby authorizesandengages Manager to,supervise, direct and control the management and operation of the Hotel in accordance with the System Standardsand the termsand conditions of this Agreement. B.Subjecttothetermsof thisAgreement,ManagershallmanagetheHoteland performeachof thefollowingfunctions(thecostsandexpensesof whichshallbeDeductions) with respect tothe Hotel: 1.Recruit,hire,supervise, direct anddischarge the Hotel Employees. 2.Establishprices,ratesandchargesforservicesprovidedintheHotel, including Guest Room rates. 3.Establishandrevise,asnecessary,administrative policiesandprocedures, includingpoliciesandproceduresforthecontrolof revenueandexpenditures,forthe purchasingof suppliesandservices,forthecontrolof credit,andfortheschedulingof maintenance,and verify that the foregoing procedures are operating ina sound manner. 4.Makepaymentsonaccountspayableandhandlecollectionsof accounts receivable. 5.Arrangeforandsuperviselocally-generatedpublicrelations,advertising, and marketing programs. 6.Procure allInventories and replacement Fixed Asset Supplies. 7.Prepareanddeliverinterimaccountings,annualaccountings,Annual OperatingStatements,BuildingEstimates,FF&amp;EEstimates,andsuchotherinformation -2-asisrequiredbythisAgreementandbeavailableatreasonabletimestodiscusswith Owner theabove-listeditemsaswellasanyandallmattersrelatingtotheoperationsat the Hotel. 8.Plan,executeandsupervise repairs,maintenance,andFF&amp;Epurchasesat the Hotel. 9.Provide,or cause tobe provided, risk managementservices relating tothe types of insurance required tobe obtained or provided by Manager under this Agreement. 10.Grant leases,subleases,licensesandconcessionsforshopsand businesses within the Hotel and collect rent and other payments pursuant tosuch arrangements. 11.ExceptasprovidedintheAddendum,obtainandkeepinfullforceand effect,eitherin Manager'snameorinOwner'sname,asmay be requiredbyapplicable LegalRequirements,anyandalllicensesandpermitstotheextentsameiswithinthe controlof Manager (or,if sameisnotwithinthecontrolof Manager,Managershalluse due diligence andreasonable efforts toobtain andkeepsame in fullforceand effect). C.The o...</p>

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