EXHIBIT 10.10
POST-FORMATION ACQUISITION AGREEMENT
THIS AGREEMENT is entered into this ___ day of _________, 1995, by and
between Host Funding, Inc., a Maryland corporation (the "REIT") and Host
Acquisition Group, LLC, a Delaware limited liability company (the "Acquisition
Manager") with reference to the following facts.
A. WHEREAS, REIT wishes to undertake an acquisition program which will
lead to the acquisition of hotel and motel properties which will be economically
rewarding to REIT;
B. WHEREAS, neither REIT nor Host Funding Advisors, Inc. (the REIT
"Advisor") currently has the resources and personnel to undertake such an
acquisition program;
C. WHEREAS, Both the REIT and the Advisor have the authority to delegate
certain acquisition responsibilities to third party service providers; and
D. WHEREAS, Acquisition Manager is willing and qualified to serve as the
manager of REIT's acquisition program;
NOW, THEREFORE, by execution of this Agreement, the REIT and the Advisor
appoint Acquisition Manager as its manager of acquisition services and
Acquisition Manager hereby accepts the appointment as Manager of acquisition
services and acknowledges that it will perform said services on behalf of REIT.
Accordingly,
REIT and Acquisition Manager agree as follows:
1. ENGAGEMENT. REIT hereby engages Acquisition Manager to provide
continuing real estate investment search and acquisition services on behalf of
REIT pursuant to the terms and conditions set forth in this Agreement.
In the performance of its duties under this Agreement, Acquisition Manager
shall have full, complete, and exclusive discretion to search for, negotiate for
and prepare acquisition documentation for hotel and motel acquisitions.
However, REIT shall make the actual ultimate investment decision as to any such
property and after Acquisition Manager shall have presented such property to the
REIT, the REIT has no obligation to acquire such property.
2. OBJECTIVES. In order to satisfy the principal investment objective
of REIT pursuant to this Agreement, Acquisition Manager shall identify and
acquire hotel and motel properties which will perform on an above-average level
in REIT. Acquisition Manager is also authorized, as a secondary objective, to
identify favorable investment opportunities in and mortgage loans to hotel and
motel projects.
3. COVENANTS.
(a) Acquisition Manager is, and throughout the term of this Agreement
shall remain, qualified to provide acquisition
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services to REIT; and
(b) To the extent of the responsibility allocated to Acquisition
Manager under this Agreement, Acquisition Manager shall not, without the written
consent of REIT (i) deal or act as an agent or broker for, or represent or act
on behalf of, any party whose interests are adverse to the interests of REIT in
any transaction, and (ii) shall not receive any consideration for Acquisition
Manager's own account from any party dealing with REIT in connection with a
transaction involving REIT.
4. RELATIONSHIP OF PARTIES. It is agreed that REIT's acquisition of hotel
and motel properties will be limited to acquisitions negotiated by Acquisition
Manager, and that REIT and its Advisor will not in any case take part or be
active in the negotiations and preliminary steps leading to an acquisition under
this Agreement. Nothing contained in this Agreement is to be construed as
creating a partnership, joint venture or agency relationship between REIT and
Acquisition Manager. Acquisition Manager is engaged under this Agreement and
its relationship to REIT during the term of this Agreement is limited to that of
independent contractor.
5. PAYMENT OF FEES AND REIMBURSEMENT OF EXPENSES.
(a) FEES: REIT shall pay to Acquisition Manager an acquisition fee
of six percent (6%) of the gross purchase price of any hotel and motel
properties acquired by REIT during the term of
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this Agreement. Such fees will be computed and billed monthly immediately after
a closed acquisition and REIT agrees to remit payment promptly. The fee for
services contemplated hereunder shall be paid by REIT in REIT common shares or
cash (at the election of REIT). REIT common shares issued to Acquisition
Manager as payment for services hereunder shall be valued at their current
(i.e., last trade) value. In the event this Agreement is terminated, all fees
from any acquisition of property by the REIT where there has been a presentation
of the property by the Acquisition Manager to the REIT prior to said termination
shall be deemed earned as of said termination.
(b) EXPENSES: In addition to the fees described in 5(a) above, REIT
shall pay for pre-approved expenses reasonably and necessarily incurred in the
performance of the acquisition services provided under this Agreement. Such
expenses include, but are not limited to, the following: (i) fees and expenses
paid to independent contractors, engineers, and consultants engaged by
Acquisition Manager in connection with an acquisition of a hotel or motel
property; (ii) costs of obtaining independent appraisals of such properties;
(iii) costs and expenses connected with title to properties; (iv) all other
expenses and costs connected with an acquisition, except that legal fees
incurred in the documentation of any acquisition transaction shall be billed
directly to REIT and paid directly by REIT to the provider of such legal
services and except that any costs and/or fees incurred by REIT or Acquisition
Manager for other real estate brokers or commission-type fees shall
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not be reimbursed by REIT but shall either be paid directly by Acquisition
Manager from its fee described in Section 5(a) or if paid by REIT said fees
shall be credited against Acquisition Manager's fee under Section 5(a).
(c) STATEMENTS: A statement showing the amount of fees and
reimbursable expenses payable will be submitted to REIT by Acquisition Manager
promptly after the close of each calendar month.
6. REPORTS. Acquisition Manager will provide to REIT monthly reports
which will include a list of all hotel and motel properties identified and
targeted as potential acquisitions and the acquisition status of each such
potential targeted property.
7. ACCOUNTING. During the term of this Agreement, Acquisition Manager
will maintain complete and accurate books, accounts, and records including all
charges made for its services and expenses incurred on behalf of REIT. REIT, or
its duly authorized agent, may have access at all reasonable times to such
books, accounts and records for the purpose of inspecting and auditing them.
8. REPRESENTATION. Acquisition Manager represents that, with respect
to acquisitions of hotel and motel properties, under this Agreement:
(a) Acquisition Manager shall not have an interest in
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any such property nor participate in the proceeds of the sale of such property
except as provided for and disclosed under this Agreement; and
(b) Acquisition Manager shall identify and negotiate for the
acquisition of hotel and motel properties in accordance with the "Acquisition
Guidelines", a copy of which is attached hereto as Schedule A.
9. LIABILITY AND INDEMNIFICATION.
(a) LIABILITY: REIT, its officers and directors, and REIT's Advisor,
if any, shall have the obligation or duty to make the final investment decisions
with respect to any property disclosed to REIT by Acquisition Manager pursuant
to this Agreement. Acquisition Manager shall not be liable for any act or
omission of REIT in connection with such determination.
Acquisition Manager's responsibilities under this Agreement are
limited to the duties and responsibilities allocated to Acquisition Manager
under this Agreement and the duties and responsibilities, if any, imposed by
applicable Federal and state law.
(b) INDEMNIFICATION: REIT agrees to hold harmless Acquisition
Manager and each of its officers, directors, employees, agents and other
representatives from any claims, actions, debts, liabilities, obligations,
losses, damages, costs and expenses (including reasonable attorneys' fees) that
arise as a result of the performance of the services required by this Agreement.
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(c) COSTS AND ATTORNEYS' FEES: In the event of a breach of any
provision or default under this Agreement, the prevailing party in any lawsuit
thereon shall be entitled to reasonable attorneys' fees in addition to any award
of damages for such breach or default.
10. COMPENSATION LIMITED. The only compensation which Acquisition
Manager shall receive in connection with any acquisition for REIT shall be the
fees specified in Section 5 of this Agreement. Acquisition Manager agrees that
it will not accept, or knowingly permit any officers or employees, or any member
of their immediate families (i.e., spouses or children), of itself or of any
affiliates or subsidiaries, to accept any compensation, bonuses, commissions,
rebates, discounts, gifts, or any other thing of value from any other person or
party in connection with any acquisition for REIT.
If there should be any violations of this provision, REIT shall have the right
to immediately terminate this Agreement, and further, to recover from
Acquisition Manager, or other parties involved, any compensation which may have
been wrongfully realized.
11. COUNTERPARTS. This Agreement may be signed or executed in separate
counterparts and the signing or execution of each counterpart shall have the
same effect as the signing or execution of a single original document.
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12. ASSIGNMENT: No assignment of this Agreement may be made by
Acquisition Manager without the written consent of REIT.
13. MODIFICATIONS. All modifications of this Agreement shall be in
writing, signed by REIT and Acquisition Manager.
14. BENEFIT. This Agreement and all of the terms and conditions contained
in this Agreement shall be binding upon and inure to the benefit of the parties
and their respective heirs, executors, administrators, successors and assigns.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties relating to the subject matter hereof and supersedes all
prior and contemporaneous agreements, understandings and negotiations, whether
oral or written, and there are no other general or specific warranties,
representations or other agreements except as herein specifically set forth.
16. TERM OF AGREEMENT. The term of this Agreement shall begin on the date
first above specified and shall terminate on the earlier of the (i) fifth annual
anniversary date of this Agreement, or (ii) when the net fees earned by
Acquisition Manager shall equal or exceed $9 million. Notwithstanding the
foregoing, the REIT may cancel this Agreement by giving sixty (60) days written
notice of such cancellation to the Acquisition Manager provided that such
proposed cancellation date is within six (6) months of the
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effective date of this Agreement.
17. NOTICES. All notices given pursuant to this Agreement shall be in
writing. All notices shall be deemed to have been properly given or served (i)
on the date of delivery if delivered personally or by courier, (ii) three days
following the date of deposit if mailed by registered or certified mail within
the United States, postage prepaid, (iii) the next business day following
deposit with an overnight air courier service which guarantees next day
delivery, or (iv) when sent by facsimile or telex. Notices shall be sent to the
parties to this Agreement at the addresses set forth on the signature page (or
to such person or persons at such address or addresses as a party may specify by
notice pursuant to this Section 17).
18. SEVERABILITY. In the event any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, such holding
shall not invalidate or render unenforceable any other provision of this
Agreement.
19. GOVERNING LAW. This Agreement and all rights under it, including
enforcement by litigation, shall be governed by and construed in accordance with
the laws of the State of Delaware.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
"REIT" HOST FUNDING, INC.,
a Maryland corporation
0000 Xxx Xxxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
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By: Xxxxxxx X. XxXxxxx
Its: President
"ACQUISITION MANAGER" HOST ACQUISITION GROUP, LLC
a Delaware limited liability company
------------------------------
By: Xxx Xxxxxxx-Xxxxx
Its: President
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SCHEDULE A
ACQUISITION GUIDELINES
Host Funding, Inc. hereby adopts and affirms the following acquisition
policies and criteria:
1. [___ to provide]
2. [___ to provide]
