ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT ("Agreement") is
entered as of the 1st day of March, 1996, between Leucadia
Financial Corporation, a Utah corporation ("Leucadia"), HomeFed
Corporation, a Delaware corporation ("HomeFed"), HomeFed
Resources Corporation, a California corporation ("HomeFed
Resources"), and HomeFed Communities, Inc., a California
corporation ("HomeFed Communities"), with reference to the
following facts:
A. As a result of a reorganization under Chapter 11
of the Bankruptcy Code, HomeFed's operations have been
significantly streamlined, and it, and its wholly owned
subsidiaries, HomeFed Resources and HomeFed Communities, have one
employee responsible for managing their business, but no
employees to carry on day-to-day operations and no office
facilities from which to conduct business. HomeFed, HomeFed
Resources and HomeFed Communities are referred to herein as the
"HomeFed Group."
B. Each of the members of HomeFed Group has a
continuing need for office space, office facilities, services and
administrative personnel to carry on its ongoing activities.
Leucadia has the capability to provide office space, office
facilities, secretarial support, administrative services,
supplies and other facilities and services that would customarily
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be required in connection with the administration of the
operations of businesses similar to those operated by the HomeFed
Group.
C. The HomeFed Group desires to retain Leucadia to
provide such services for the consideration and on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Retention of Leucadia. As of the effective date
of this Agreement, Leucadia is retained to provide the facilities
and services described in this Agreement in consideration of the
payment of the administrative fee described herein.
2. Scope of Work. Leucadia shall provide all of the
office facilities and administrative services required by each
member of the HomeFed Group in connection with the ongoing
operation of its business. In this connection, Leucadia shall
provide the following facilities and services, as well as any
other reasonably related thereto:
(a) Provide office space, office facilities, such
as telephones, telecopying, photocopying and other similar
facilities, and such administrative services, including
secretarial and other similar administrative support, as may be
reasonably required to enable the HomeFed Group to carry on its
businesses;
(b) Receive, deposit and withdraw all funds
received from the operations of the HomeFed Group;
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(c) Recruit, employ, train, direct and terminate
the employment of administrative personnel, as needed, in the
administration of the operations of the HomeFed Group;
(d) Establish and maintain books of account,
using accounts and classifications consistent with generally
accepted accounting practices;
(e) Prepare and deliver to the directors of each
of the members of the HomeFed Group a quarterly unaudited
statement of income and an unaudited balance sheet for each
member of the HomeFed Group;
(f) Coordinate legal matters and proceedings with
the attorneys for each of the members of the HomeFed Group;
(g) Provide, to the extent possible and based
upon available revenues, for the orderly payment of accounts
payable, employee payroll taxes and insurance premiums and any
other operating expenses incurred by a member of the HomeFed
Group;
(h) Supervise the annual audit of the financial
records of each member of the HomeFed Group.
3. Compensation. As compensation for the services
and facilities provided under this Agreement, Leucadia shall be
compensated during the first 12 months of this Agreement at an
annual rate of $141,000, payable in monthly installments of
$11,750 on the first day of each month, commencing on the first
day of the first month after the date of this Agreement and
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continuing thereafter for a 12-month period. At the expiration
of the initial 12-month period commencing on the date of this
Agreement, Leucadia and each member of the HomeFed Group shall
negotiate in good faith to determine the compensation to be paid
to Leucadia under this Agreement for periods subsequent to such
initial 12-month period.
4. Term and Termination. The term of this Agreement
shall commence on the effective date set forth in the preamble to
this Agreement and continue for a 36-month period thereafter;
provided, however, if Leucadia and the members of the HomeFed
Group are unable to reach agreement regarding the compensation to
be paid to Leucadia for periods after the initial 12-month period
following the date of this Agreement, Leucadia shall have the
right to terminate this Agreement upon 30 days' written notice to
each member of the HomeFed Group.
5. Inspection Rights of HomeFed Group. During the
term of this Agreement, each member of the HomeFed Group shall
have the right to appoint a person (other than an employee or
officer of Leucadia or any of its affiliates) who shall have the
right to inspect at reasonable times and upon reasonable notice
all books and records pertaining to each member of the HomeFed
Group.
6. Relationship of Parties. The relationship of
Leucadia to each member of the HomeFed Group shall be that of
independent contractor and principal. This Agreement does not
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create an employer/employee relationship, or a partnership, joint
venture or other agency relationship between the parties.
7. General Provisions.
7.1 Severability. Each provision of this
Agreement shall be viewed as separate and divisible, and in the
event any provision shall be held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall continue to be in full force and effect.
7.2 Waiver. The waiver by any party of a breach
or violation of any provision of this Agreement shall not operate
as or be construed to be a waiver of any subsequent breach.
7.3 Governing Law. This Agreement shall be
construed in accordance with and governed by the laws of the
State of Utah.
7.4 Assignment. No party hereto shall have the
right to assign any of its rights, duties or obligations under
this Agreement without the prior written consent of the other
parties.
7.5 Notices. All notices and other
communications under this Agreement shall be in writing and shall
be deemed to have been duly given on the date of service if
personally served on the party to whom notice is to be given, or
72 hours after mailing, if mailed to the party to whom notice is
to be given by first class mail, postage prepaid and properly
addressed to the party at its address set forth on the signature
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page of this Agreement or any other address that such party may
designate by written notice to the other parties.
7.6 Successors and Assigns. Subject to the
restrictions on assignment set forth hereinabove, this Agreement
shall be binding upon and inure to the benefit of the legal
representatives, successors and assigns of the parties hereto.
IN WITNESS WHEREOF, this Agreement has been executed as
of the date first hereinabove written.
LEUCADIA FINANCIAL CORPORATION,
a Utah corporation
By: /s/ Corinne A. Maki
----------------------------
Address: 529 East South Temple
Salt Lake City, UT 84102
HOMEFED CORPORATION,
a Delaware corporation
By: /s/ Patricia A. Wood
--------------------------
Address: 529 East South Temple
Salt Lake City, UT 84102
HOMEFED RESOURCES CORPORATION,
a California corporation
By: /s/ Patricia A. Wood
----------------------------
Address: 529 East South Temple
Salt Lake City, UT 84102
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HOMEFED COMMUNITIES, INC.,
a California corporation
By: /s/ Patricia A. Wood
-----------------------------
Address: 529 East South Temple
Salt Lake City, UT 84102
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