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HAMA Spring Meeting Fairmont Hotel April 9, 2003 ____________ Management Agreements

J EFFER , M ANGELS , B UTLER & M ARMARO The premier hospitality practice in a full-service law firm. HAMA Spring Meeting Fairmont Hotel April 9, 2003 ____________ Management Agreements. J EFFER , M ANGELS , B UTLER & M ARMARO The premier hospitality practice in a full-service law firm.

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HAMA Spring Meeting Fairmont Hotel April 9, 2003 ____________ Management Agreements

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  1. JEFFER, MANGELS, BUTLER & MARMAROThe premier hospitality practice in a full-service law firm HAMA Spring Meeting Fairmont Hotel April 9, 2003____________ Management Agreements

  2. JEFFER, MANGELS, BUTLER & MARMAROThe premier hospitality practice in a full-service law firm More than $20 Billion of Hotel Experience!

  3. JEFFER, MANGELS, BUTLER & MARMAROThe premier hospitality practice in a full-service law firm For your complementary copy of “Management Agreement Resource Materials” Contact: Jim Butler 310-201-3526 or jbutler@JMBM.com

  4. . . . And something to offend everyone, particularly our French friends . . .

  5. JEFFER, MANGELS, BUTLER & MARMAROThe premier hospitality practice in a full-service law firm "Going to war without France is like going deer hunting without your accordion." --Norman Schwartzkopf

  6. JEFFER, MANGELS, BUTLER & MARMAROThe premier hospitality practice in a full-service law firm "I just love the French. They taste like chicken!" --- Hannibal Lecter

  7. JEFFER, MANGELS, BUTLER & MARMAROThe premier hospitality practice in a full-service law firm "The only time France wants us to go to war is when the German Army is sitting in Paris sipping coffee." --- Regis Philbin

  8. JEFFER, MANGELS, BUTLER & MARMAROThe premier hospitality practice in a full-service law firm "The last time the French asked for 'more proof' it came marching into Paris under a German flag." --David Letterman

  9. JEFFER, MANGELS, BUTLER & MARMAROThe premier hospitality practice in a full-service law firm "France has neither winter nor summer nor morals. Apart from these drawbacks it is a fine country. France has usually been governed by prostitutes." --Mark Twain

  10. Management Agreements We are going to focus on: • Critical Considerations • Trends in Contract Terms • Common Mistakes and Problems

  11. Goal of Presentation Facilitate Exchange of Information Among HAMA Members

  12. Critical Considerations

  13. Critical Considerations How important Process & team Controlling the draft Drafting principles Who is a fiduciary?

  14. Trends in Contract Terms

  15. Trends in Contract Terms • Term • Operator duties – how detailed? • Hotel standard • Owner’s preferred return • Employees

  16. Trends in Contract Terms • Subordination to financing - SNDA • Termination rights • Performance • Assignment • Audit rights

  17. Trends in Contract Terms • Ownership • Exculpation • Non competition • Force majeure • Indemnification

  18. Trends in Contract Terms • Interest in real property • ROFR or ROFO • Dispute resolution

  19. Common Mistakes • Administration of existing management agreements • In negotiations of new agreements or renegotiation of existing ones

  20. Common Mistakes In Administration of Existing Agreements: • “Fixing” the problem • Nasty letter writing • Failure to give notice • Bad Annual Plans

  21. Common Mistakes • Enthusiastic letters • Perfecting the right to terminate does not require termination

  22. Common Mistakes In Administration of Existing: • Permitting use of Operator’s use of hotel assets • Bypassing management audit • Forgetting asset managers can be fiduciaries too

  23. Common Mistakes In Negotiations: • Failure to understand importance of terms to long term value • Over negotiate the agreement • Believe “We never do this!” • Confidentiality provisions

  24. JEFFER, MANGELS, BUTLER & MARMAROThe premier hospitality practice in a full-service law firm More than $20 Billion of Hotel Experience!

  25. JEFFER, MANGELS, BUTLER & MARMAROThe premier hospitality practice in a full-service law firm Jim Butler Jeffer Mangels Butler & Marmaro LLP 1900 Avenue of the Stars, 7th Floor Los Angeles, CA 90067 310-201-3526 or jbutler@JMBM.com

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