EXHIBIT 10
ADVISORY AGREEMENT
THIS ADVISORY AGREEMENT (this "Agreement") is entered into effective as
of January 1, 1998, by and between Hospitality Properties Trust, a Maryland real
estate investment trust (the "Company"), HRPT Advisors, Inc., a Delaware
corporation (the "Advisor"), and, solely with respect to Section 15 of this
Agreement with respect to certain non-competition covenants, Xxxxx X.
Xxxxxxx and Xxxxxx X. Xxxxxx.
WHEREAS, the Company is a Maryland real estate investment trust
pursuant to a Declaration of Trust effective May 12, 1995 (as amended and
restated from time to time, the "Declaration") for the purpose of buying,
selling, leasing, holding and financing real and personal property and granting
and holding mortgages thereon;
WHEREAS, the Advisor is a corporation organized for the purpose of
providing management and administrative services with respect to the ownership
of real property;
WHEREAS, Xxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxx are both directors and
50% shareholders of the Advisor;
WHEREAS, the Company has qualified and intends to continue to qualify
as a real estate investment trust as defined in the Internal Revenue Code of
1986, as amended, (said Code, as in effect from time to time, together with any
regulations and rulings thereunder, being hereinafter referred to as the
"Internal Revenue Code"); and
WHEREAS, the Company desires to make use of the advice and assistance
of the Advisor and certain sources of information available to the Advisor, and
the Advisor desires to undertake the duties and responsibilities herein set
forth, on behalf of and subject to the supervision of the Company's Board of
Trustees (the "Trustees"), all as provided for herein;
NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, the parties hereto agree as follows:
1. General Duties of the Advisor. The Advisor shall use its best
efforts to present to the Company a continuing and suitable investment program
consistent with the investment policies and objectives of the Company. Subject
to the supervision of the Trustees and upon their direction, and consistent with
the provisions of the Declaration, the Advisor shall:
(a) serve as the Company's investment advisor, with its
obligations to include providing research and economic and statistical data in
connection with the Company's investments and recommending changes in the
Company's investment policies, when appropriate;
(b) investigate and evaluate investment opportunities and make
recommendations concerning such opportunities to the Trustees;
(c) manage the Company's short term investments including the
acquisition and sale of money market instruments in accordance with the
Company's policies;
(d) administer the day to day operations of the Company;
(e) investigate, select and conduct relations and enter into
appropriate contracts on behalf of the Company with other individuals,
corporations and entities in furtherance of the investment activities of the
Company;
(f) upon request of the Trustees, act as attorney in fact or
agent in acquiring and disposing of investments and funds of the Company and in
handling, prosecuting and settling any claims of the Company;
(g) upon request of the Trustees, invest and reinvest any
money of the Company;
(h) obtain for the Company, when appropriate, the services of
property managers or management firms to perform customary property management
services with regard to the real estate properties owned by or in the possession
of the Company, and perform such supervisory or monitoring services on behalf of
the Company with respect to the activities of such property managers or
management firms as would be performed by a prudent owner, including but not
limited to closely supervising the activities of such property managers or
management firms, visiting the properties, participating in property management
budgeting, reviewing the accounting of property income and expenses, reporting
on the financial status of the properties and reviewing the accounting of
property income and expenses, reporting on the financial status of the
properties and reviewing and approving marketing plans, but excluding the actual
on-site property management functions performed by said property managers or
management firms;
(i) obtain for the Company such services as may be required
for other activities relating to the investment portfolio of the Company;
(j) administer such day-to-day bookkeeping and accounting
functions as are required for the proper management of the assets of the
Company, contract for audits and prepare or cause to be prepared such reports as
may be required by any governmental authority in connection with the ordinary
conduct of the Company's business, including without limitation, periodic
reports, returns or statements required under the Securities Exchange Act of
1934, as amended, the Internal Revenue Code after, the securities and tax
securities of any jurisdiction in which the Company is obligated to file such
reports, or the rules and regulations promulgated under any of the foregoing;
(k) provide office space, office equipment and the use of
accounting or computing equipment when required, and provide personnel necessary
for the performance of the foregoing services; and
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(l) from time to time, or at any time requested by the
Trustees, make reports thereto of its performance of the foregoing services to
the Company.
In performing its services under this Agreement, the Advisor may
utilize facilities, personnel and support services of various of its Affiliates
(as defined below). The Advisor shall be responsible for paying such Affiliates
for their personnel and support services and facilities out of its own funds.
Notwithstanding the above, the Company may request, and will pay for the direct
costs of, services provided by Affiliates of the Advisor provided that such
request is approved by a majority vote of the Directors who are not Affiliates
of the Advisor and who do not perform any services for the Company except as
Trustee (the "Independent Trustees").
As used in this Agreement, the term "Affiliate" means, as to any
Person, (i) any other Person directly or indirectly controlling, controlled by
or under common control with such Person, (ii) any other Person that owns
beneficially, directly or indirectly, five percent (5%) or more of the
outstanding capital stock, shares or equity interests of such Person, or (iii)
any officer, director, employee, general partner or trustee of such Person or of
any Person controlling, controlled by or under common control with such Person
(excluding Trustees who are not otherwise Affiliates of such Person). The term
"Person" means and includes individuals, corporations, limited partnerships,
general partnerships, joint stock companies or associations, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts, business
trusts, limited liability companies, and other entities.
2. Bank Accounts. The Advisor shall establish and maintain one or more
bank accounts in its own name or, at the direction of the Trustees, in the name
of the Company, and shall collect and deposit into such account or accounts and
disburse therefrom any monies on behalf of the Company, provided that no funds
in any such account shall be commingled with any funds of the Advisor or any
other Person. The Advisor shall from time to time render an appropriate
accounting of such collections and payments to the Trustees and to the auditors
of the Company.
3. Records. The Advisor shall maintain appropriate books of account and
records relating to services performed pursuant to this Agreement, which books
of account and records shall be available for inspection by representatives of
the Company upon reasonable notice during ordinary business hours.
4. Information Furnished Advisor. The Trustees shall at all times keep
the Advisor fully informed with regard to the investment policies of the
Company, the capitalization policy of the Company, and generally the Trustees'
then-current intentions as to the future of the Company. In particular, the
Trustees shall notify the Advisor promptly of their intention to sell or
otherwise dispose of any of the Company's investments or to make any new
investment. The Company shall furnish the Advisor with a certified copy of all
financial statements, a signed copy of each report prepared by independent
certified public accountants, and such other information with regard to its
affairs as the Advisor may from time to time reasonably request. The Company
shall retain legal counsel and accountants to provide such legal and accounting
advice and services as the Advisor or the Trustees shall deem necessary or
appropriate to adequately perform the functions of the Company.
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5. REIT Qualification. Anything else in this Agreement to the contrary
notwithstanding, the Advisor shall refrain from any action (including, without
limitation, the furnishing or rendering of services to tenants of property or
managing real property) which, in its judgment made in good faith, or in the
judgement of the Trustees as transmitted to the Advisor in writing, would (a)
adversely affect the status of the Company as a real estate investment trust as
defined and limited in the Internal Revenue Code or which would make the Company
subject to the Investment Company Act of 1940, as amended, or (b) violate any
law, rule, regulation or statement of policy of any governmental body or agency
having jurisdiction over the Company or over its securities, or (c) otherwise
not be permitted by the Declaration or Bylaws of the Company, except if such
action shall be ordered by the Trustees, in which event the Advisor shall
promptly notify the Trustees of the Advisor's judgment that such action would
adversely affect such status or violate any such law, rule or regulation or the
Declaration or Bylaws of the Company and shall refrain from taking such action
pending further clarification or instructions from the Trustees. In addition,
the Advisor shall take such affirmative steps which, in its judgment made in
good faith, or in the judgment of the Trustees as transmitted to the Advisor in
writing, would prevent or cure any action described in (a), (b) or (c) above.
6. Self-Dealing. Neither the Advisor nor any Affiliate of the Advisor
shall sell any property or assets to the Company or purchase any property or
assets from the Company, directly or indirectly, except as approved by a
majority of the Independent Trustees. In addition, except as otherwise provided
in Sections 1, 9, or 10 hereof, or except as approved by a majority of the
Independent Trustees, neither the Advisor nor any Affiliate of the Advisor shall
receive any commission or other remuneration, directly or indirectly, in
connection with the activities of the Company or any joint venture or
partnership in which the Company is a party. Except for compensation received by
the Advisor pursuant to Section 9 hereof, all commissions or other remuneration
received by the Advisor or an Affiliate of the Advisor and not approved by the
Independent Trustees under Sections 1 or 10 hereof or this Section 6 shall be
reported to the Company annually within ninety (90) days following the end of
the Company's fiscal year.
Upon request of any Trustee, the Advisor shall from time to time
promptly furnish the Company with information on a confidential basis as to any
investments within the Company's investment policies made by the Advisor for its
own account.
7. No Partnership or Joint Venture. The Company and the Advisor are not
partners or joint venturers with each other and neither the terms of this
Agreement nor the fact that the Company and the Advisor have joint interests in
any one or more investments shall be construed so as to make them such partners
or joint venturers or impose any liability as such on either of them.
8. Fidelity Bond. The Advisor shall not be required to obtain or
maintain a fidelity bond in connection with the performance of its services
hereunder.
9. Compensation. The Advisor shall be paid, for the services rendered
by it to the Company pursuant to this Agreement, an annual advisory fee (the
"Advisory Fee") equal to 0.70 percent of the Average Invested Capital (as
defined below) computed as of the last day of the Company's fiscal year up to
$250,000,000, and 0.50 percent of the Average Invested Capital equal to or
exceeding $250,000,000. In addition, the Advisor shall be paid an annual
incentive fee (the
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"Incentive Fee"), consisting of a number of shares of the Company's Common
Shares of Beneficial Interest ("Common Shares") with a value (determined as
provided below) equal to 15 percent of the amount by which Cash Available for
Distribution to Shareholders (as defined below) for such fiscal year exceeds
Cash Available for Distribution to Shareholders for the fiscal year immediately
prior to such fiscal year, but in no event shall the Incentive Fee payable in
respect of any year exceed $.02 multiplied by the weighted average number of
Common Shares outstanding during such year.
Payment of the Incentive Fee shall be made by issuance of Common
Shares, under the Company's 1995 Incentive Share Award Plan or otherwise. The
number of Common Shares to be issued in payment of the Incentive Fee shall be
the whole number of shares (disregarding any fraction) equal to the value of the
Incentive Fee, as provided above, divided by the average closing price of the
Common Shares on the New York Stock Exchange during the month of December in the
year for which the computation is made. (The Advisory Fee and Incentive Fee are
hereinafter collectively referred to as the "Fees.")
For purposes of this Agreement: "Average Invested Capital" of the
Company shall mean the daily weighted average of the total book value of the
assets of the Company invested, directly or indirectly, in equity interests in
and loans secured by real estate and personal property owned in connection with
such real estate (collectively, "Properties"), before reserves for depreciation
or bad debts or other similar noncash reserves, computed by taking the weighted
average of such values. "Cash Available for Distribution" shall mean, for any
period, the net income of the Company, before real estate depreciation,
amortization and other non-cash or non-recurring items, less the amount, if any,
included in the calculation thereof which represents rental income recognized by
the Company in respect of amounts which, pursuant to leasing arrangements
relating to any of the Properties, the Company is required to escrow or reserve
for renovations and refurbishments. Calculation of Average Invested Capital
shall be made annually by the Company; calculation of Cash Available for
Distribution to Shareholders shall be made annually by the Company's independent
certified public accountants.
The Advisory Fee shall be computed and paid within thirty (30) days
following the end of each fiscal month by the Company, and the Incentive Fee
shall be computed and paid within thirty (30) days following the public
availability of the Company's annual audited financial statements for each
fiscal year. Such computations shall be based upon the Company's monthly or
annual financial statements, as the case may be, and shall be in reasonable
detail. A copy of such computations shall promptly be delivered to the Advisor
accompanied by payment of the Fees shown thereon to be due and payable.
The payment of the aggregate annual Fees paid for any fiscal year shall
be subject to adjustment as of the end of each fiscal year. On or before the
30th day after public availability of the Company's annual audited financial
statements for each fiscal year, the Company shall deliver to the Advisor an
Officer's Certificate (a "Certificate") reasonably acceptable to the Advisor and
certified by an authorized officer of the Company setting forth (i) the Average
Invested Capital and Funds From Operations for the Company's fiscal year ended
upon the immediately preceding December 31, and (ii) the Company's computation
of the Fees payable for said fiscal year.
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If the aggregate annual Fees payable for said fiscal year as shown in
such Certificate exceed the aggregate amounts previously paid with respect
thereto by the Company, the Company shall include its check for such deficit and
deliver the same to the Advisor with such Certificate.
If the aggregate annual Fees payable for said fiscal year as shown in
such Certificate are less than the aggregate amounts previously paid with
respect thereto by the Company, the Company shall specify in such Certificate
whether the Advisor should (i) remit to the Company its check in an amount equal
to such difference or (ii) grant the Company a credit against the Fees next
coming due in the amount of such difference until such amount has been fully
paid or otherwise discharged.
10. Compensation for Additional Services. If, and to the extent that,
the Company shall request the Advisor to render services on behalf of the
Company other than those required to be rendered by the Advisor in accordance
with the terms of this Agreement, such additional services shall be compensated
separately on terms to be agreed upon between the Advisor and the Company from
time to time.
11. Expenses of the Advisor. Without regard to the compensation
received by the Advisor from the Company pursuant to this Agreement, the Advisor
shall bear the following expenses incurred in connection with the performance of
its duties under this Agreement:
(a) employment expenses of the personnel employed by the
Advisor, including but not limited to, salaries, wages, payroll taxes and the
cost of employee benefit plans;
(b) fees and travel and other expenses paid to directors,
officers and employees of the Advisor, except fees and travel and other expenses
of such persons who are Trustees or officers of the Company incurred in their
capacities as Trustees or officers of the Company;
(c) rent, telephone, utilities, office furniture, equipment
and machinery and other office expenses of the Advisor, except to the extent
such expenses relate solely to an office maintained by the Company separate from
the office of the Advisor; and
(d) miscellaneous administrative expenses incurred in
supervising, monitoring and inspecting real property and other investments of
the Company or relating to performance by the Advisor of its obligations
hereunder.
12. Expenses of the Company. Except as expressly otherwise provided in
this Agreement, the Company shall pay all its expenses not payable by the
Advisor, and, without limiting the generality of the foregoing, it is
specifically agreed that the following expenses of the Company shall be paid by
the Company and shall not be paid by the Advisor:
(a) the cost of borrowed money;
(b) taxes on income and taxes and assessments on real
property, if any, and all other taxes applicable to the Company;
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(c) legal, auditing, accounting, underwriting, brokerage,
listing, reporting, registration and other fees, and printing, engraving and
other expenses and taxes incurred in connection with the issuance, distribution,
transfer, trading, registration and stock exchange listing of the Company's
securities, including transfer agent's, registrar's and indenture trustee's fees
and charges;
(d) expenses of organizing, restructuring, reorganizing or
terminating the Company, or of revising, amending, converting or modifying the
Company's organizational documents;
(e) fees and travel and other expenses paid to Trustees and
officers of the Company in their capacities as such (but not in their capacities
as officers or employees of the Advisor) and fees and travel and other expenses
paid to advisors, contractors, mortgage services, consultants, and other agents
and independent contractors employed by or on behalf of the Company;
(f) Expenses directly connected with the acquisition,
disposition or ownership of real estate interests or other property (including
the costs of foreclosure, insurance premiums, legal services, brokerage and
sales commissions, maintenance, repair, improvement and local management or
property), other than expenses with respect thereto of employees of the Advisor,
to the extent that such expenses are to be borne by the Advisor pursuant to
Section 11 above;
(g) all insurance costs incurred in connection with the
Company (including officer and trustee liability insurance) or in connection
with any officer and trustee indemnity agreement to which the Company is a
party;
(h) expenses connected with payments of dividends or interest
or contributions in cash or any other form made or caused to be made by the
Trustees to holders of securities of the Company;
(i) all expenses connected with communications to holders of
securities of the Company and other bookkeeping and clerical work necessary to
maintaining relations with holders of securities, including the cost of printing
and mailing certificates for securities and proxy solicitation materials and
reports to holders of the Company's securities;
(j) legal, accounting and auditing fees and expenses, other
than those described in subsection (c) above; and
(k) expenses relating to any office or office facilities
maintained by the Company separate from the office of the Advisor.
13. Annual Operating Expenses Limitation Requiring Refunds by the
Advisor. There shall be a limitation (the "Limitation") on Operating Expenses
(as defined below) of the Company for each fiscal year which shall be the lower
of the following:
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(a) the greater of (i) 2% of the Average Invested Capital of
the Company for such fiscal year; and (ii) 25% of the Net Income (as defined
below) of the Company for such fiscal year; or
(b) the lowest of any applicable operating expense limitations
that may be imposed by law or regulation in a state in which any securities of
the Company are or will be qualified for sale or by a national securities
exchange on which any securities of the Company are or may be listed, as such
limitations may be altered from time to time.
For purposes of this Agreement, "Operating Expenses" shall be
calculated on the basis of the Company's annual audited financial statements and
shall be deemed to mean the aggregate annual expenses regarded as ordinary
operating expenses in accordance with generally accepted accounting principles
(including the Fees), exclusive of the following:
(i) the expenses set forth in subsections (a) through
(d), inclusive, and (f) of Section 12 hereof;
(ii) non-cash expenditures, including provisions for
depreciation, depletion, bad debt reserve and
amortization;
(iii) losses on the disposition of assets and provisions
for such losses;
(iv) options granted to the Advisor; and
(v) other extraordinary charges including, without
limitation, litigation costs.
For purposes of this Agreement, "Net Income" for any period shall be
calculated on the basis of the Company's audited financial statements and shall
be deemed to mean total revenues applicable to such period, less the expenses
applicable to such period, including additions to reserves for depreciation or
bad debts or other similar noncash reserves, determined in accordance with
generally accepted accounting principles.
On or before the 30th day after public availability of the Company's
annual audited financial statements for each fiscal year, the Advisor shall
refund (to the extent of the aggregate Fees it has received with respect to such
year) to the Company the amount, if any, by which the Operating Expenses
exceeded the Limitation; provided however, that unless such action is prohibited
by laws or regulations, the Company may instead permit such refund to be
effected by a reduction in the amount of the Fees to be paid by the Company
during the fiscal years following the fiscal year with respect to which such
refund is to be made until such time as any such refund is fully paid and
provided the Limitation imposed by this Section 13 shall require that only so
much of such excess need be refunded as is conclusively determined by the
Trustees, including a majority of the Independent Trustees, to be unjustified.
14. Limits of Advisor Responsibility. The Advisor assumes no
responsibility other than to render the services described herein in good faith
and shall not be responsible for any action of the Trustees in following or
declining to follow any advice or recommendation of the Advisor. The
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Advisor, its shareholders, directors, officers, employees and Affiliates will
not be liable to the Company, its shareholders, or others, except by reason of
acts constituting bad faith, willful or wanton misconduct or gross negligence.
The Company shall reimburse, indemnify and hold harmless the Advisor, its
shareholders, directors, officers and employees and its Affiliates for and from
any and all expenses, losses, damages, liabilities, demands, charges and claims
of any nature whatsoever in respect of or arising from any acts or omissions of
the Advisor undertaken in good faith and in accordance with the standard set
forth above pursuant to the authority granted to it by this Agreement.
15. Other Activities of Advisor. Neither the Advisor nor Xxxxxx X.
Xxxxxx nor Xxxxx X. Xxxxxxx shall, without the consent of the Company's
Independent Trustees, (i) provide advisory services to, or serve as a director
or officer of, any other REIT which is principally engaged in the business of
ownership of hotel properties or (ii) make direct investments in hotel
facilities. Nothing herein shall prevent the Advisor from engaging in other
activities or businesses or from acting as advisor to any other Person
(including other real estate investment trusts) provided that no such activity
shall conflict with the Advisor's obligations under the immediately preceding
sentence; provided, further, however, that the Advisor shall notify the Company
in writing in the event that it does so act as an advisor to another real estate
investment trust. The Advisor shall be free from any obligation to present to
the Company any particular investment opportunity which comes to the Advisor.
Without limiting the foregoing provisions, the Advisor agrees, upon the request
of any Trustee of the Company, to disclose certain investment information
concerning the Advisor or certain of its Affiliates, provided, however, that
such disclosure shall be required only if it does not constitute a breach of any
fiduciary duty or obligation of the Advisor.
Directors, officers, employees and agents of the Advisor or of its
Affiliates may serve as Trustees, officers, employees, agents, nominees or
signatories of the Company. When executing documents other otherwise acting in
such capacities for the Company, such persons shall use their respective titles
in the Company. Such persons shall receive no compensation from the Company for
their services to the Company in any such capacities.
16. Term, Termination. This Agreement shall continue in force and
effect until December 31, 1998 unless extended or sooner terminated in
accordance with the terms of this Section 16. The expiration date of the then
current term of this Agreement is referred to herein as the "Termination Date."
The Company shall give written notice to the Advisor prior to the Termination
Date of its intention to renew this Agreement and the period of such extension.
Such renewal shall be determined by a majority of the Independent Trustees of
the Company.
Notwithstanding any other provision of this Agreement to the contrary,
this Agreement, or any extension hereof, may be terminated by either party
hereto upon sixty (60) days' written notice to the other party, pursuant to a
majority vote of the Independent Trustees; or, in the case of a termination by
the Advisor, by a majority vote of the directors of the Advisor.
Paragraph 19 hereof shall govern the rights, liabilities and
obligations of the parties upon termination of this Agreement; and, except as
provided in paragraph 20, such termination shall be without further liability of
either party to the other than for breach or violation of this Agreement prior
to termination.
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17. Assignment. The Company may terminate this Agreement at any time in
the event of its assignment by the Advisor except an assignment to a
corporation, association, trust, or other successor organization which may take
over the property and carry on the affairs of the Advisor; provided that,
following such assignment, the persons who controlled the operations of the
Advisor immediately prior to the assignment shall control the operation of the
successor organization, including the performance of its duties under this
Agreement, and such successor organization shall be bound by the same
restrictions by which the Advisor was bound prior to such assignment. Such
assignment or any other assignment of this Agreement by the Advisor shall bind
the assignee hereunder in the same manner as the Advisor is bound hereunder.
This Agreement shall not be assignable by the Company without the prior written
consent of the Advisor, except in the case of any assignment by the Company to a
corporation or other organization which is the successor to the Company, in
which case such successor shall be bound hereby and by the terms of said
assignment in the same manner and to the same extent as the Company is bound
hereby.
18. Default, Bankruptcy, Etc. of the Advisor. At the sole option of the
Company, this Agreement may be terminated immediately upon written notice of
such termination from the Trustees to the Advisor if any of the following events
shall have occurred:
(a) the Advisor shall have violated any provision of this
Agreement and, after written notice from the Trustees of such violation, shall
have failed to cure such default within thirty (30) days;
(b) a petition shall have been filed against the Advisor for
an involuntary proceeding under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, and such petition shall not have been
dismissed within ninety (90) days of filing; or a court having jurisdiction
shall have appointed a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Advisor for any substantial portion of
its property, or ordered the winding upon or liquidation of its affairs, and
such appointment or order shall not have been rescinded or vacated within ninety
(90) days of such appointment or order; or
(c) the Advisor shall have commenced a voluntary proceeding
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall have made any general assignment for the benefit
of creditors, or shall have failed generally to pay its debts as they became
due.
The Advisor agrees that, if any of the events specified in Paragraphs
(b) or (c) of this Section 18 shall occur, it will give written notice thereof
to the Trustees within seven (7) days following the occurrence of such event.
19. Action Upon Termination. From and after the effective date of any
termination of this Agreement pursuant to Sections 16, 17 or 18 hereof, the
Advisor shall be entitled to no compensation for services rendered hereunder for
the then-current term of this Agreement, but shall be paid, on a pro rata basis,
all compensation due for services performed prior to such termination (reduced
by the amount, if any, of the Fees to be refunded by the Advisor pursuant to
Section 13 hereof, which section shall apply pro rata to the applicable portion
of the fiscal year in which
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termination occurs in the event of a termination occurring at other than the end
of the Company's fiscal year. Upon such termination, the Advisor immediately
shall:
(a) pay over to the Company all monies collected and held for
the account of the Company by it pursuant to this Agreement, after deducting
therefrom any accrued Fees (reduced by amounts owed by the Advisor to the
Company pursuant to the last paragraph of Section 13 hereof) and reimbursements
for its expenses to which it is then entitled;
(b) deliver to the Trustees a full and complete accounting,
including a statement showing all sums collected by it and a statement of all
sums held by it for the period commencing with the date following the date on
its last accounting to the Trustees; and
(c) deliver to the Trustees all property and documents of the
Company then in its custody or possession.
The amount of Fees paid to the Advisor upon termination shall be
subject to adjustment pursuant to the following mechanism. On or before the 30th
day after public availability of the Company's annual audited financial
statements for the fiscal year in which termination occurs, the Company shall
deliver to the Advisor a Certificate reasonably acceptable to the Advisor and
certified by an authorized officer of the Company setting forth (i) the Average
Invested Real Estate Assets, Cash Available for Distribution to Shareholders and
Funds From Operations for the Company's fiscal year ended upon the immediately
preceding December 31, and (ii) the Company's computation of the Fees payable
upon the date of termination (reduced by the aggregate amount of any excess
expenses to be refunded pursuant to Section 13 hereof, which Section shall apply
to the applicable portion of the fiscal year in which termination occurs in the
event of a termination occurring at other than the end of the Company's fiscal
year.
If the annual Fees owed upon termination as shown in such Certificate
exceed the Fees paid by the Company upon termination, the Company shall include
its check for such deficit and deliver the same to the Advisor with such
Certificate.
If the Annual Fees owed upon termination as shown in such Certificate
are less than the Fees paid by the Company upon termination, the Advisor shall
remit to the Company its check in an amount equal to such difference.
20. Trustee Action. Wherever action on the part of the Trustees is
contemplated by this Agreement, action by a majority of the Trustees, including
a majority of the Independent Trustees, shall constitute the action provided for
herein.
21. Notices. Any notice, report or other communication required or
permitted to be given hereunder shall be in writing unless some other method of
giving such notice, report or other communication is accepted by the party to
whom it is given, and shall be given by being delivered at the following
addresses to the parties hereto:
If to the Company:
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Hospitality Properties Trust
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: President
If to the Advisor:
REIT Management & Research, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: President
Such notice shall be effective upon its receipt by the party to whom it
is directed. Either party hereto may at any time given notice to the other party
in writing of a change of its address for purposes of this paragraph 21.
22. Amendments. The Agreement shall not be amended, changed, modified,
terminated, or discharged in whole or in part except by an instrument in writing
signed by each of the parties hereto, or by their respective successors or
assigns, or otherwise as provided herein.
23. Successors and Assigns. This Agreement shall be binding upon any
successors or permitted assigns of the parties hereto as provided herein.
24. Governing Law. The provisions of this Agreement shall be governed
by and construed in accordance with the laws of the Commonwealth of
Massachusetts.
25. Captions. The captions included herein have been inserted for ease
of reference only and shall not be construed to affect the meaning, construction
or effect of this Agreement.
26. Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof and supersedes
and cancels any pre-existing agreements with respect to such subject matter.
27. Attorneys' Fees. If any legal action is brought for the enforcement
of this Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party or parties shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action in addition
to any other relief to which it or they may be entitled.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, under seal, as of the day and year
first above written.
ATTEST: HOSPITALITIES PROPERTIES TRUST
/s/ Xxxx X. Xxxxxx By: /s/ Xxxxxx X. X'Xxxxx
----------------------------- -------------------------------
Its Treasurer and Chief
Financial Officer
WITNESS: REIT MANAGEMENT & RESEARCH, INC.
/s/ Xxxxxx XxXxxxxxxx By: /s/ Xxxx Xxxxx
------------------------------ ------------------------------
Its Treasurer
THE PROVISIONS OF SECTION 15
HEREOF ARE HEREBY AGREED TO:
/s/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx
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