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EXHIBIT 10.16
REVENUE SHARING AGREEMENT AND AGREEMENT AS TO CERTAIN
MANAGEMENT SERVICE OBLIGATIONS
This Revenue Sharing Agreement is entered
into as of the _____________day
of____________, 2005, by and among John Q.
Hammons Management Company, LLC,
("Management Company"), John Q. Hammons
Hotels, L.P. ("Partnership"), John Q.
Hammons Hotels Two, L.P. (LP II), [TRS
Subsidiary ("Owner")], and each of the
entities listed in Schedule I attached
hereto (the "Hammons Owners").
WITNESSETH:
Whereas, Management Company is the
successor to the Partnership in connection
with and has assumed all obligations under
that certain Assignment Agreement
between Partnership and John Q. Hammons
Hotels, Inc. ("JQH, Inc."), dated April
1, 2002, as amended by Amendment No. 1,
dated ______ , 2005 (the "Assignment
Agreement") to provide management services
and duties on behalf of and for the
Partnership in connection with the
management of certain hotel properties owned,
leased or managed by the Partnership and LP
II, (the "Partnership Properties"),
or managed by the Partnership under certain
management contracts between certain
Hammons Owners and (or assigned by JQH,
Inc. to) the Partnership (the "Existing
Hammons Properties"); and
Whereas, pursuant to those Lease Agreements
between Partnership, as Lessor, and
Owner, as Lessee, dated _____________,
2005, and LP II, as Lessor, and Owner, as
Lessee, Owner leases the Partnership
Properties from Partnership and LP II; and
Whereas, concurrently herewith, Management
Company and Owner are entering into
that certain Management Services Agreement,
(the "Management Services
Agreement"), pursuant to which Management
Company shall continue to provide
management services to and for Owner, as
lessee of the Partnership Properties;
and
Whereas, concurrently herewith, Management
Company and the Hammons Owners are
entering into a Management Agreement
(Hammons Ownership Group) (the "Hammons
Properties Management Agreement"), dated
_________________, 2005, pursuant to
which Management Company shall provide
management services to certain of the
Existing Hammons Properties, and will
provide management services to certain
hotel properties and associated facilities
that may be developed in the future
and be owned, leased or managed by the
Hammons Owners, or their Affiliates (the
"Future Hammons Properties", and with the
Existing Hammons Properties, the
"Hammons Properties").
Now, Therefore, in consideration of the
mutual promises and covenants
hereinafter set forth, the parties hereto
mutually agree as follows:
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1. Termination of
Non-Indenture Management Contracts. Partnership and
Management
Company hereby agree that (a) the obligations of Management
Company
under the Assignment Agreement to provide management agreement
services
to the Partnership Properties and certain of the Existing
Hammons
Properties
specified in Schedule II attached hereto (the "Non-Indenture
Properties"), are hereby terminated, and (b) the corresponding
Management
Contracts
and Additional Management Contracts applicable to such
Partnership Hotels and the Non-Indenture Properties are hereby
terminated
without
further liability of either party thereto, except for such
provisions
as shall survive in accordance with their terms. Owner, as a
successor
to the Partnership and John Q. Hammons Hotels Two, L.P., in
regard to
the Partnership Properties, and the applicable Hammons Owners,
in regard
to the Non-Indenture Properties, hereby consent to such
termination of the foregoing Management Contracts and
Additional
Management
Contracts.
2. Indenture Management
Contracts. Solely in regard to the Management
Contracts
specified in Schedule III attached hereto (the "Indenture
Management
Contracts", and the Existing Hammons Properties to which they
apply, the
"Indenture Properties"), the respective obligations, including
monetary
obligations, of (i) Partnership and Management Company pursuant
to the
Assignment Agreement, and (ii) certain Hammons Owners and the
Partnership, shall survive and remain in full force and effect
in
accordance
with the provisions of the Indenture Management Contracts and
the
Assignment Agreement, as amended. Payments by the applicable
Hammons
Owners
pursuant to such Indenture Management Contracts shall survive
any
release of
the Indenture dated as of May 21, 2002, Wachovia Bank, N.A.
Trustee,
relating to those certain Series A and Series B 8 7/8% First
Mortgage
Notes of John Q. Hammons Hotels, L.P. and John Q. Hammons
Hotels
Finance
Corporation III, as joint and several obligors, but shall
otherwise
be suspended or terminate in accordance with the provisions
herein.
The parties acknowledge, however, that the obligation of
Partnership under the Assignment Agreement to reimburse Management
Company
the costs
and expenses incurred by Management Company for management
services
provided on behalf of the Partnership for the Indenture
Properties
shall be waived so long as such costs are fully reimbursed by
Owner
under the terms of the Management Services Agreement (the
foregoing
provision
to not constitute a release of the obligations of Partnership).
3. Reimbursement of
Management Company Actual Operating Costs. In
consideration of Management Company entering into and providing
management
services
to and directly for the Existing Hammons Properties and the
Future
Hammons Properties, and the termination of the Management
Contracts
and
Additional Management Contracts pursuant to which Partnership
was
contractually obligated to provide management services for the
Hammons
Properties, Partnership covenants and agrees to promptly reimburse
and pay
to
Management Company the amount by which (i) the
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Management
Fee that would be due Management Company based upon Actual
Operating
Costs (as defined in Section 3.1 of the Management Services
Agreement)
exceeds (ii) the Arms-Length Fee actually paid by the Owner
pursuant
to Section 3.1 of the Management Services Agreement. Owner
consents
and agrees that any failure of Partnership to make any such
required
reimbursement and payment at such time as the Management Fee is
due under
the Management Services Agreement, shall constitute an Event of
Default
thereunder as if such failure to pay was the default of Owner.
4. Revenue Sharing
Payments. During the term of this Agreement, the Hammons
Owners
hereby consent and agree to pay to the Partnership a share of
gross
revenues
of the Non-Indenture Hotels and the Future Hammons Properties
(individually, with respect to each of such Hammons Properties,
the
"Revenue
Sharing Payments"). The Revenue Sharing Payments shall be in
the
amounts
applicable to each of the Non-Indenture Hotels and Future
Hammons
Properties, as specified in accordance with Schedule IV attached
hereto,
and shall
be payable as to any such Non-Indenture Hotels and Future
Hammons
Properties, only so long as owned, leased or managed by the
applicable
Hammons Owners or an Affiliate of the Hammons Owners.
Management
Company hereby consents to the Revenue Sharing Payments by the
Hammons
Owners or their Affiliates to Partnership, which payments shall
be
in lieu of
any payment by the Hammons Owners or their Affiliates to
Management
Company of the management fees required in the Hammons
Properties
Management Agreement.
5. Term of Agreement. The
term of this Agreement shall run concurrently with
the term
of the Management Services Agreement, and this Agreement (and
all
further
obligations of Management Company and the applicable Hammons
Owners
under the Assignment Agreement and any and all Indenture
Management
Contracts)
shall expire and be of no further force and effect (except as
to the
matters referenced herein which relate to modification or
termination of prior agreements) upon the expiration or termination
of the
Management
Services Agreement in accordance with Section 2.1 of the
Management
Services Agreement. Notwithstanding any provision of the
Indenture
Management Contracts to the contrary, the term of such
Indenture
Management
Contracts shall terminate concurrently with the expiration or
termination of this
Agreement, as provided above.
6. Termination of
Payments. Notwithstanding any provision of this Agreement,
the
Assignment, or any of the Indenture Management Contracts specified
in
Schedule
III to the contrary, all obligations of the Hammons Owners and
any of
their Affiliates to make any of the Revenue Sharing Payments
and
any
payment of management fees to the Partnership pursuant to the
Indenture
Management Contracts, shall cease and be suspended, or shall
terminate,
as follows:
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a.
The
obligation to make such payments shall cease and be suspended
(the "Suspended Payments") in the event of any failure or default
of
the Owner to pay in full the Management Fee due Management
Company
under the Management Services Agreement, as and when due, and
will
not recommence and continue until such time as such failure or
default is fully cured, at which time the Suspended Payments will
be
paid.
b.
The
obligation to make such payments shall terminate in their
entirety at the earlier of such time as either (i) the
Management
Services Agreement is terminated by Owner as to all Partnership
Properties, (ii) the Partnership is in default of any obligation
to
pay the Preferred Redemption Price to the holders of the
Hammons
Preferred Units (other than the Required Holders), or to
liquidate
the Partnership and complete the liquidation process by the
Liquidation Completion Deadline, including the full distribution
of
the liquidation proceeds, in each case as required in Section
13.2
of that certain Fourth Amended and Restated Agreement of
Limited
Partnership of [John Q. Hammons Hotels], L.P., dated as of the
date
hereof, as amended, supplemented or otherwise modified from time
to
time in accordance with its terms (the "Partnership
Agreement");
(iii) such time as the Preferred Redemption Price is paid in full
to
the holders of the Hammons Preferred Units (other than the
