TERMINATION OF CERTAIN LEASE AGREEMENTS AND
MASTER AGREEMENTS RELATED THERETO
(CROSSHOST PROPERTIES)
This Termination of Certain Lease Agreements and Master Agreements
Related Thereto (this "Agreement") is entered into effective as of the ___
day of June, 1998 (the "Effective Date"), by and between CrossHost, Inc., a
Maryland corporation ("CrossHost"), Host Funding, Inc., a Maryland
corporation ("Host Funding"), Crossroads Hospitality Tenant Company, L.L.C.,
a Delaware limited liability company ("Lessee"), and Crossroads Hospitality
Company, L.L.C., a Delaware limited liability company ("Crossroads"), and
with regard to the hotels commonly known as SLEEP INNS, and located at 0000
Xxxxxxx Xxxxxx, XX, Xxxxxxxxxxx, Xxxxxxx (the "Tallahassee Property"), and
10775 W. Emerald Coast Parkway, Destin, Florida (the "Destin Property") and
those hotels commonly known as SUPER 8 MOTELS, and located at 0000 Xxxx
Xxxxxx, Xxxxx, Xxxxxxxx (the "Miner Property"), 0000 Xxxxx Xxxxxxxx, Xxxxxx
Xxxxx, Missouri (the "Poplar Bluff Property"), 000 XX Xxxxxxx 00, Xxxxxxxx,
Xxxxxxxx (the "Somerset Property"), and 0000 Xxxxx Xxxxxx, Xxxx Xxxxx,
Xxxxxxxx (the "Rock Falls Property") (and with the Tallahassee Property, the
Destin Property, the Miner Property, the Poplar Bluff Property, the Somerset
Property, and the Rock Falls Property hereinafter sometimes collectively
referred to as the "CrossHost Properties").
W I T N E S S E T H:
WHEREAS, CrossHost (or its predecessor in interest, Host Funding) and
Lessee, have previously entered into those certain Lease Agreements
(hereinafter sometimes collectively referred to as the "CrossHost Lease
Agreements"), more particularly defined and described in EXHIBIT "A" attached
hereto and by reference incorporated herein, pursuant to which Lessee has
leased from CrossHost the CrossHost Properties; and
WHEREAS, CrossHost, or its predecessor in interest, Host Funding, Lessee
and Crossroads have previously entered into that certain Master Agreement
("Master Agreement I"), dated April 1, 1996, Master Agreement I relating to
certain rights and obligations of said parties with respect to the Miner
Lease, the Poplar Bluff Lease Agreement, the Somerset Lease Agreement and the
Rock Falls Lease Agreement; and
WHEREAS, CrossHost, Lessee and Crossroads have previously entered into
that certain Master Agreement ("Master Agreement II", and with Master
Agreement I hereinafter sometimes collectively referred to as the "Master
Agreements"), dated September 6, 1996, Master Agreement II relating, among
other things, to certain rights and obligations of said parties with respect
to the Tallahassee Lease Agreement and the Destin Lease Agreement; and
WHEREAS, CrossHost, Host Funding, Lessee and Crossroads desire to, upon the
terms and conditions set forth herein, terminate the CrossHost Lease Agreements,
Master Agreement I and
Master Agreement II (but only as to the Tallahassee Lease Agreement and the
Destin Lease Agreement).
NOW, THEREFORE, in consideration of the mutual premises contained
herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged and confessed by the parties
hereto, CrossHost, Host Funding, Lessee and Crossroads, where and as
applicable, agree as follows:
1. CrossHost and Xxxxxx acknowledge and agree that, as of the
Effective Date, the CrossHost Lease Agreements are hereby terminated and
declared to be of no further force or effect. Incident to such terminations,
CrossHost and Xxxxxx acknowledge and agree that neither CrossHost nor Lessee
shall have any further obligations one to the other pursuant to the CrossHost
Lease Agreements, monetary, non-monetary, or otherwise, except as set forth
hereinafter in this Agreement. Notwithstanding anything contained herein to
the contrary, Xxxxxx further agrees, at no expense to Xxxxxx, to cooperate
fully with BAC Hotel Management, Inc. ("BAC"), the new operator of the
CrossHost Properties (except the Tallahassee Property), so as to facilitate
an orderly and effective transition of the ongoing operations thereof.
2. CrossHost, Lessee and Crossroads acknowledge and agree that Master
Agreement I is hereby terminated and declared to be of no further force or
effect. Incident to such termination, CrossHost, Lessee and Crossroads
acknowledge and agree that CrossHost, Lessee and Crossroads have any further
obligations one to the other pursuant to Master Agreement I, monetary,
non-monetary, or otherwise, except as set forth hereinafter in this Agreement.
3. CrossHost, Lessee and Crossroads agree that Master Agreement II
(but only as to the Tallahassee Lease Agreement and the Destin Lease
Agreement) is hereby terminated and declared to be of no further force and
effect. Incident to such termination, CrossHost, Lessee and Crossroads
acknowledge and agree that CrossHost, Lessee and Crossroads have no further
obligations one to the other pursuant to Master Agreement II (but only as to
the Tallahassee Lease Agreement and the Destin Lease Agreement), monetary,
non-monetary, or otherwise, except as hereinafter set forth in this Agreement.
4. In consideration for the termination of the CrossHost Lease
Agreements, Master Agreement I and Master Agreement II (but only as to the
Tallahassee Lease Agreement and the Destin Lease Agreement), Cross Host
and/or Host Funding agree to on the Effective Date pay or cause to be paid to
Lessee and/or Crossroads the sum of $236,000.00 in cash PLUS the sum of all
xxxxx cash on site as of the Closing Date at the CrossHost Properties LESS
$109,168.00 (working capital deposits delivered by CrossHost, or its
predecessor-in-interest, Host Funding, to Lessee upon the commencement of the
CrossHost Lease Agreements) and LESS $45,147.00 (working capital deposits
delivered by CrossHost or its predecessor-in-interest, Host Funding, to
Lessee upon the commencement of the San Diego Lease Agreement).
2
5. In consideration for the termination of the Lease Agreements,
Master Agreement I and Master Agreement II (but only as to the Tallahassee
Lease Agreement and the Destin Lease Agreement), and with respect to the
CrossHost Lease Agreements, Lessee agrees to as of the Effective Date
transfer and deliver to CrossHost (or, at the option of CrossHost, to BAC)
all assets (other than cash on hand, working capital and capital expenditure
reserves), inventory and equipment delivered by CrossHost (or its
predecessor-in-interest, Host Funding) to Lessee upon the commencement of the
CrossHost Lease Agreements, and CrossHost agrees, or agrees to cause BAC to
assume all assets (other than cash on hand, working capital and capital
expenditure reserves), liabilities (including, but not limited to, service
contracts, leases, and other similar liabilities existing at, or arising
after the commencement of the CrossHost Lease Agreements), inventory and
equipment delivered to Lessee by CrossHost (or its predecessor-in-interest,
Host Funding) upon the commencement of the CrossHost Lease Agreements (all
pursuant to Section 6.4 of the CrossHost Lease Agreements); provided,
CrossHost acknowledges that the four (4) personal computers and a van
purchased by Lessee incident to the operation of the CrossHost Properties is
and shall remain the property of Lessee.
6. With respect to the CrossHost Lease Agreements, CrossHost and
Lessee agree that all revenues and expenses for the CrossHost Properties
shall, in a manner reasonably acceptable to CrossHost and Lessee, be prorated
as of the Effective Date, such that the revenues and expenses for the period
of time preceding the Effective Date shall be for the account of Lessee, and
the revenues and expenses for the period of time from and after the Effective
Date shall be for the account of CrossHost or its designee.
7. CrossHost and Lessee, as to the CrossHost Lease Agreements,
acknowledge and agree that the indemnity obligations of CrossHost and Lessee
contained in Sections 8 and 23 of the CrossHost Lease Agreements (but, as to
Lessee, only for events described therein and arising after the commencement
of the CrossHost Lease Agreements and prior to the Effective Date, and, for
CrossHost, only for such events and arising prior to the commencement of the
CrossHost Lease Agreements or after the Effective Date) shall survive the
execution and closing of the transactions contemplated by this Agreement for
the benefit of CrossHost, Host Funding, Lessee and Crossroads, as applicable.
Further, and notwithstanding the existence of any insurance, and without
regard to the policy limits of any insurance, Lessee and Crossroads, jointly
and severally,, will protect, indemnify, hold harmless and defend CrossHost
and Host Funding, their affiliates, subsidiaries, members, officers,
directors, managers, agents and assigns ("Host Indemnified Persons"), from
and against all liabilities, obligations, claims, damages, penalties, causes
of action, costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) imposed upon or incurred by or asserted against
Host Indemnified Persons by reason of any failure on the part of Lessee to
hereafter, and if required, satisfy or comply with its hereinabove described
indemnity obligations. Additionally, and notwithstanding the existence of
any insurance, and without regard to the policy limits of any insurance, Host
Funding and CrossHost, jointly and severally, will protect, indemnify, hold
harmless and defend Lessee and Crossroads, their affiliates, subsidiaries,
members, officers, managers, agents and assigns ("Crossroads Indemnified
Persons"), from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including, without
3
limitation, reasonable attorneys' fees and expenses) imposed upon or incurred
by or asserted against Crossroads Indemnified Persons by reason of any
failure on the part of CrossHost to hereafter, and if required, satisfy or
comply with its hereinabove described indemnity obligations.
8. With respect to the CrossHost Properties, Lessee and Crossroads
acknowledge and agree that any employees or personnel of Lessee involved in
the operation by Lessee of the CrossHost Properties will be terminated as of
the Effective Date, and any such employees which BAC elects not to
re-employee (the "Non-BAC Employees") shall not be deemed for any reason to
be the employees or personnel of BAC, CrossHost or Host Funding. Lessee and
Crossroads further acknowledges and agree that from and after the Effective
Date, neither BAC, CrossHost nor Host Funding shall be responsible or liable
for the Employee Costs (hereinafter defined) payable, accruing or otherwise
due to any Non-BAC Employees. Lessee and Crossroads jointly and severally
agree to defend, indemnify and hold harmless BAC, CrossHost and Host Funding
from and against each and every demand, claim, loss, cost and expense,
including, but not limited to, reasonable attorneys' fees, imposed or
incurred by any of said parties, which directly or indirectly, relate to,
result from or arise out of Employee Costs relating to the Non-BAC Employees.
Lessee and Crossroads further acknowledge and agree that Lessee shall be
responsible for the payment of any and all termination and exit payments or
the like payable, accruing or otherwise due to any Non-BAC Employee. For the
purposes hereof, "Employee Costs" shall mean any costs, expenses, salaries,
employee benefit, pension or incentive plans (including without limitation,
"ERISA" plans), insurance and medical plans, employment agreements, exit
payments (including without limitation, final payroll or accrued vacation
time) or the like payable, accruing or otherwise due to any Non-BAC Employee.
9. CrossHost, Host Funding, Lessee and Crossroads shall, in addition
to any consideration paid to Lessee and/or Crossroads pursuant to Section 4
hereof, and prior to the Effective Date, agree upon the appropriate
adjustments to be made between the parties as to cash advances of any nature
whatsoever made by CrossHost and/or Host Funding to Lessee pursuant to the
terms of the CrossHost Lease Agreements and the San Diego Lease Agreement
($63,000.00 with respect to the CrossHost Lease Agreements and $25,616.00
with respect to the San Diego Lease Agreement) (said sum in addition to the
$109,168.00 and $45,147.00 described in Section 4 hereof), payments made or
reserved by Lessee for capital expenditures funded by Lessee pursuant to the
CrossHost Lease Agreements ($58,731.00 with respect to the CrossHost Lease
Agreements, other than the Tallahassee Lease Agreement; $82,597.00 for the
San Diego Lease Agreement [plus $7,000.00 for a hot water heater]; and
$34,855.00 with respect to the Tallahassee Lease Agreement), and Negative
Base Rent ($35,000.00) (as defined in the CrossHost Lease Agreements), if
any, incurred in calendar year 1998 by Lessee incident to the operation of
the CrossHost Properties. In the event such adjustments result in CrossHost
and/or Host Funding owing monies to Lessee, said monies shall be paid to
Lessee on or before the Effective Date; provided, if such adjustments result
in Lessee owing monies to CrossHost and/or Host Funding, said monies shall be
paid to CrossHost and/or Host Funding on or before the Effective Date.
10. CrossHost, Host Ventures and Host Funding acknowledge and agree
that the 60,000 shares of Host Funding Class A Common Stock previously
pledged as security for the obligations
4
of Lessee and Crossroads under the Master Agreements are and shall remain in
the control and possession of Lessee and/or Crossroads free and clear of such
security interest, subject to the terms and conditions of that certain letter
agreement, dated March __, 1998, and relating to the rights of Crossroads as
to the sale of such shares of Host Funding Class A Common Stock.
11. CrossHost, Lessee and Crossroads acknowledge and agree that
pursuant to that certain Lease Termination Agreement and that certain Partial
Termination of Master Agreement, both dated March __, 1998, (collectively,
the "Previous Tallahassee Termination Agreements"), CrossHost and Lessee
have, for certain agreed upon business reasons, heretofore terminated the
Tallahassee Lease Agreement and Master Agreement II (only as it relates to
the Tallahassee Lease Agreement), that the terms and conditions of this
Agreement are incorporated into the Previous Tallahassee Termination
Agreements as if originally included therein, and that to the extent any
conflict exists between this Agreement and the Previous Tallahassee
Termination Agreements, the applicable terms and conditions of this Agreement
shall control.
12. Capital Management Services, Inc. ("Capital Management") owes
Lessee and/or Crossroads $14,654.00 with respect to the Tallahassee Property.
Host Funding agrees to use its best faith efforts to cause Capital
Management to pay said sum to Xxxxxx and/or Crossroads; provided, if Capital
Management has not paid such sum within forty-five (45) days after the
Effective Date, Host Funding agrees to pay same to Lessee and/or Crossroads.
13. Lessee also presently leases from CrossHost the hotel commonly
known as a Super 8 Motel located at 0000 Xxxxxxx Xxx Xxxxx, Xxx Xxxxx,
Xxxxxxxxxx (the "San Diego Lease Agreement"). With regard to the San Diego
Lease, CrossHost and Xxxxxx acknowledge and agree that the San Diego Lease
Agreement is not currently being terminated and remains in full force and
effect, but may, within one (1) year after the Effective Date, be terminated
by Lessee upon ninety (90) days prior written notice to CrossHost; provided,
upon such termination by Lessee (or upon termination of the San Diego Lease
Agreement by CrossHost) CrossHost shall owe an $84,400.00 lease cancellation
fee to Lessor. Additionally, Host Funding, Lessee and Crossroads further
acknowledge and agree that Master Agreement I, as hereby terminated, does not
survive after the Effective Date with respect to the San Diego Lease
Agreement, irrespective of the continuing existence of the San Diego Lease
Agreement.
14. CrossHost, Host Funding, Lessee and Crossroads understand and
agree that the performance of the obligations of each of said parties
hereunder is subject to the respective lenders and/or mortgagees of
CrossHost holding liens on the CrossHost Properties having approved this
Agreement and the terms and provisions hereof, and the respective
franchisors pursuant to any existing franchise agreements under which the
CrossHost Properties are operated, have approved the transition of the
operation thereof. Xxxxxx and Crossroads also acknowledge and agree that the
performance of the obligations of CrossHost and Host Funding hereunder is
further subject to the execution by XxxxxXxxx and BAC, of the new operating
or lease agreements with respect to the CrossHost Properties.
5
15. CrossHost, Host Funding, Lessee and Crossroads acknowledge and
agree that this Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
16. CrossHost, Host Funding, Lessee and Crossroads acknowledge and
agree that this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their successors and assigns.
17. CrossHost, Host Funding, Lessee and Crossroads acknowledge and
agree that this Agreement may not be modified or changed orally but may be
modified or changed only by a written agreement signed by the parties hereto.
18. CrossHost, Host Funding, Lessee and Crossroads acknowledge and
agree that if any provision of this Agreement or the application thereof to
any person or circumstances shall be invalid or unenforceable to any extent,
the remainder of this Agreement and the application of such provisions to
other person or circumstances shall not be effected thereby and shall be
enforceable to the greatest extent permitted by law.
19. CrossHost, Host Funding, Lessee and Crossroads understand and
agree that should any party to this Agreement commence legal proceedings
against the other to enforce the terms and provisions of this Agreement, the
party losing in such legal proceeding should pay the attorney's fees and
other expenses of the party prevailing in such legal proceedings.
20. CrossHost, Host Funding, Lessee and Crossroads understand and agree
that this Agreement is the entire agreement of the parties hereto with regard
to the subject matter addressed herein and supersedes any prior written or
oral agreements between the parties hereto regarding same.
IN WITNESS WHEREOF, the parties have executed this Agreement by their
duly authorized officers as of the Effective Date.
CROSSHOST:
CROSSHOST, INC., a Maryland corporation
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
6
HOST FUNDING:
HOST FUNDING, INC., a Maryland corporation
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
LESSEE:
CROSSROADS HOSPITALITY TENANT COMPANY,
L.L.C., an affiliate of Crossroads
Hospitality Company, L.L.C.
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
CROSSROADS:
CROSSROADS HOSPITALITY COMPANY, L.L.C.,
a Delaware limited liability company
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
7
EXHIBIT "A"
CROSSHOST LEASE AGREEMENTS
1. Lease Agreement (as from time to time amended, the "Miner Lease
Agreement"), dated March 29, 1996, covering the Miner Property, and
executed by Host Funding, as lessor, and Lessee, as lessee, the rights of
Host Funding as lessor thereunder having been assigned by Host Funding to
CrossHost.
2. Lease Agreement (as from time to time amended, the "Poplar Bluff Lease
Agreement"), dated March 29, 1996, covering the Poplar Bluff Property, and
executed by Host Funding, as lessor, and Lessee, as lessee, the rights of
Host Funding as lessor thereunder having been assigned by Host Funding to
CrossHost.
3. Lease Agreement (as from time to time amended, the "Somerset Lease
Agreement"), dated March 29, 1996, covering the Somerset Property, and
executed by Host Funding, as lessor, and Lessee, as lessee, the rights of
Host Funding as lessor thereunder having been assigned by Host Funding to
CrossHost.
4. Lease Agreement (as from time to time amended, the "Rock Falls Lease
Agreement") dated March 29, 1996, covering the Rock Falls Property, and
executed by Host Funding, as lessor, and Lessee, as lessee, the rights of
Host Funding as lessor thereunder having been assigned by Host Funding to
CrossHost.
5. Lease Agreement (as from time to time amended, the "Tallahassee Lease
Agreement"), dated September 6, 1996, covering the Tallahassee Property,
and executed by CrossHost, as lessor, and Xxxxxx, as lessee.
6. Lease Agreement (as from time to time amended, the "Destin Lease
Agreement"), dated September 6, 1996, covering the Destin Property, and
executed by CrossHost, as lessor, and Xxxxxx, as lessee.
