Exhibit 10.32
FINANCIAL AND ADMINISTRATIVE SERVICES AGREEMENT
FINANCIAL AND ADMINISTRATIVE SERVICES AGREEMENT made effective as of the
1st day of January, 2000 by and between XXXXXXXX HOSPITALITY LIMITED PARTNERSHIP
and E&P FINANCING LIMITED PARTNERSHIP (either party being the "Partnerships"),
XXXXXXXX HOSPITALITY TRUST, INC. (the "Company") and XXXXXXXX HOSPITALITY
MANAGEMENT, INC., a Maryland corporation (the "Provider").
WHEREAS, the Partnerships desire to compensate the Provider for services
the Provider renders in the acquisition or disposition of properties on behalf
of the Partnerships;
WHEREAS, the Partnerships desire to compensate the Provider for services
the Provider renders in the closing of loans, loan renewals, and loan
refinancings approved on behalf of the Partnerships;
WHEREAS, the Company desires that the Provider provide certain services
with respect to the Company's accounting and administrative requirements;
WHEREAS, the Partnerships and the Provider are entering into this Financial
and Administrative Services Agreement ("Agreement") to establish a fee structure
regarding such compensation;
NOW, THEREFORE, in consideration of the mutual covenants and conditions set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. The Partnerships shall pay the Provider a fee ("Acquisition Fee")
equal to one percent (1%) of the gross sales price of any property purchased by
the Partnerships in exchange for services supplied by the Provider in the
acquisition of such property, including, but not limited to, conducting initial
due diligence and evaluating the prospective property. For purposes of this
Agreement, the "gross sales price" of a property purchased by the Partnerships
shall include any and all cash payments, assignments of partnership units by the
Partnerships and/or assumptions of debt made by the Partnerships in the
acquisition of the property.
2. The Partnerships shall pay the Provider a fee ("Disposition Fee")
equal to one percent (1%) of the gross sales price of any property sold by the
Partnerships. For purposes of this Agreement, the "gross sales price" of a
property sold by the Partnerships shall include any and all cash payments, the
fair market value of any property received in exchange for the sold property,
and/or assumptions of the
Partnerships' debt by the purchaser in the disposition of the property, reduced
by assumptions of debt by the Partnerships or any property received in exchange
by the Partnerships.
3. The Partnerships shall pay to the Provider a fee ("Financing
Fee") equal to one-quarter percent (0.25%) of the principal amount of debt of
any new loans, refinancings, or renewals approved by the Company on behalf of
the Partnerships.
4. The Partnership shall pay to the Provider a fee ("Construction
Management Fee") equal to nine percent (9%) of the costs described below for
services provided in the oversight and coordination of any development,
construction, alteration, purchasing of any budgeted capital item or improvement
project ("Construction Project") undertaken by the Partnerships. The costs on
which the Construction Management Fee is calculated include all third party
hard, including any budgeted costs of furniture, fixtures and equipment, and
soft costs and the allocable costs of any personnel of the Provider specifically
assigned to a Construction Project. The Construction Management Fee shall be
payable thirty days after completion of a Construction Project.
5. The Company shall pay the Provider a fee in the amount of One
Million Fifty Thousand Dollars ($1,050,000) per year, effective January 1, 2000
which shall be payable monthly in installments by the tenth day following the
month in which the services are performed (the "Administration Fee"). The
Provider shall have the obligation to: (i) provide accounting services,
including the preparation and submittal of all reports required by the United
States Securities and Exchange Commission and NASDAQ; (ii) prepare and tally
proxy statements; (iii) prepare the Company's monthly income statements; (iv)
prepare and disclose all obligations, bills and checks of the Company; (v)
provide administrative services, including preparing and announcing press
releases and handling investor relation services, such as meetings with analysts
and reporters; (vi) provide tax work papers and audit work papers to the
preparer of the tax returns and financial audit; (vii) provide for the services
of a portfolio manager to review hotel operations; provide short-term and long-
term forecasts to determine which hotels should remain part of the Partnerships'
portfolios and which hotels should be divested from the portfolios, including
analysis of physical, operational, marketing and financial requirements
necessary to maintain a hotel in the portfolio; and provide portfolio analysis
for prospective hotel purchases to determine if prospective hotels should be
added to one of the portfolios; and (viii) provide investor relations services
including the review and comment on the format of reports to be provided by the
Company and the Partnerships to their investors; determine methods for providing
efficient communications and favorable relationships among the Partnerships the
Company and their investors; and develop systems to provide useful, timely and
appropriate information to the investors of the Company and the Partnerships.
6. The Partnerships shall pay any Acquisition Fee, Disposition Fee, or
Financing Fee to the
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Provider in the form of the Partnership Units. For purposes of this Agreement,
"Partnership Units" are defined as all the Common Partnership Units of the
Partnerships.
7. The value of a Partnership Unit to be paid to the Provider shall be
based on the value of the Company's REIT Share on (i) the Closing Date of any
property purchased by the Partnerships (in the event of an Acquisition Fee);
(ii) the Closing Date of any property disposed of by the Partnerships (in the
event of a Disposition Fee); or (iii) the Closing Date of any new loan, loan
renewal, or loan refinancing approved on behalf of the Partnerships (in the
event of a Financing Fee). For purposes of this Agreement, "Closing Date" is
defined as the date upon which the property legally changes hands from the
selling party to the purchasing party (in the event of an Acquisition Fee or
Disposition Fee), or the date upon which the loan, loan renewal, or loan
refinancing transaction is funded (in the event of a Financing Fee).
A REIT Share is defined as a common share of the Company. The
value of the Company's REIT Share shall be based on the average of the daily
market price of a REIT Share for the ten consecutive trading days immediately
preceding the date of such valuation. The market price for each such trading day
shall be: (i) if the REIT Shares are listed or admitted to trading on any
securities exchange or the NASDAQ-National Market System, the sale price,
regular way, on such day, or if no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, on such day, (ii) if
the REIT Shares are not listed or admitted to trading on any securities exchange
or the NASDAQ-National Market System, the last reported sale price on such day
or, if no sale takes place on such day, the average of the closing bid and asked
prices on such day, as reported by a reliable quotation source designated by the
Company; or (iii) if the REIT Shares are not listed or admitted to trading on
any securities exchange or the NASDAQ-National Market System and no such last
reported sale price or closing bid and asked prices are available, the average
of the reported high bid and low asked prices on such day, as reported by a
reliable quotation source designated by the Company, or if there shall be no bid
and asked prices on such day, the average of the high bid and low asked prices,
as so reported, on the most recent day (not more than 10 days prior to the date
in question) for which prices have been so reported; provided that if there are
no bid and asked prices reported during the ten days prior to the date in
question, the value of the REIT Shares shall be determined by mutual agreement
between the Company and the Provider, or, if such mutual agreement cannot be
reached, by an appraiser mutually agreed upon by the Company and the Provider.
In the event that the parties are unable to agree upon an
appraiser, the Company and the Provider each shall select an appraiser. Each
such appraiser shall complete an appraisal of the fair market value of the REIT
Shares within 20 days of the first attempt at evaluating the REIT Shares, and
the fair market value of the REIT Shares shall be the average of the two
appraisals; provided, however, that if the higher appraisal exceeds the lower
appraisal by more than 20% of the lower appraisal, the two appraisers
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shall select a third appraiser who shall complete an appraisal of the fair
market value of the REIT Shares no later than 30 days after the first attempt at
evaluating the REIT Shares. In such case, the fair market value of the REIT
Shares shall be the average of the two appraisals closest in value. The Company
shall pay the costs of all appraisals.
8. The payment of any Acquisition Fee, Disposition Fee, or Financing
Fee by the Partnerships to the Provider shall be made within sixty (60) days of
the respective Closing Date.
9. The Partnerships shall be obligated to the Provider for any
Acquisition Fee, Disposition Fee, Contractor Management Fee, or Financing Fee
for a period of two (2) years, commencing May 25, 2000. The Partnerships shall
be obligated to Provider for an Acquisition Fee, Disposition Fee, or Financing
Fee relating to any contracts for the purchase or sale of property, or any loan
financing commitments, executed, or any Construction Project approved by the
Company, subsequent to May 24, 2000 and prior to May 26, 2002, regardless of the
Closing Date. The Administrative Fee has been in place since January 1, 1996 and
shall continue until terminated by either Company or Provider upon receipt of
thirty (30) days written notice sent to the current business address of the
other party.
10 . The covenants and agreements contained herein shall be binding
upon and inure to the benefit of the successors and assigns of the respective
parties hereto. Neither party may assign this Agreement without the consent of
the other party.
11. Each provision of this Agreement shall be considered severable,
and if for any reason any provision that is not essential to the effectuation of
the basic purposes of the Agreement is determined to be invalid and contrary to
any existing or future law, such invalidity shall not impair the operation of or
affect those provisions of this Agreement that are valid.
12. The waiver of either party of any breach of this Agreement shall
not operate or be construed to be a waiver of any subsequent breach.
13. This Agreement shall be construed and enforced in accordance with
the laws of the State of Maryland, without regard to principles of conflicts of
law.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
WITNESS: PARTNERSHIPS:
------------
XXXXXXXX HOSPITALITY LIMITED PARTNERSHIP
By: Xxxxxxxx Hospitality REIT Trust,
General Partner
____________________________ By:_____________________________________
Name:_______________________________
Title:______________________________
E&P FINANCING LIMITED PARTNERSHIP
By: E&P REIT Trust, General Partner
____________________________ By:_____________________________________
Name:_______________________________
Title:______________________________
PROVIDER:
--------
XXXXXXXX HOSPITALITY MANAGEMENT, INC.
____________________________ By:_____________________________________
Name:_______________________________
Title:______________________________
COMPANY:
-------
XXXXXXXX HOSPITALITY TRUST, INC.
____________________________ By:_____________________________________
Name:_______________________________
Title:______________________________
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