MASTER AGREEMENT
between
HOST FUNDING, INC.
CROSSROADS HOSPITALITY TENANT COMPANY, L.L.C.
and
CROSSROADS HOSPITALITY COMPANY, L.L.C.
October 15, 1995
MASTER AGREEMENT
THIS MASTER AGREEMENT (this "Agreement"), dated as of October 15, 1995, by
and among HOST FUNDING, INC., a Maryland corporation ("Host"), CROSSROADS
HOSPITALITY TENANT COMPANY, L.L.C., a Delaware limited liability company
("Tenant") and CROSSROADS HOSPITALITY COMPANY, L.L.C., a Delaware limited
liability company ("Crossroads").
W I T N E S S E T H:
WHEREAS, Host holds and owns clear and marketable title to the hotel
properties listed on Exhibit "A" attached hereto and made a part hereof (the
"Hotels");
WHEREAS, contemporaneously with entering into this Agreement, Host is
entering into separate and individual lease agreements with Tenant pursuant to
which Host will lease each of the Hotels to Tenant (hereinafter referred to
individually as a "Lease," and collectively as the "Leases"). All capitalized
terms used herein as defined terms which are not defined herein but which are
defined in any of the Leases shall have the same meanings herein as are given
to them in the Leases in which such terms are defined;
WHEREAS, in furtherance of the consummation of the above-described lease
transactions, Host, Tenant and Crossroads wish to set forth in this Agreement
certain terms and conditions which shall apply to all of the Leases.
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 by the parties hereto, the parties agree as follows:
Section 1. TERMINATION RIGHTS. Notwithstanding anything contained in any of
the Leases to the contrary, Tenant shall, upon the provision to Host of at least
ninety (90) days Notice, have the following termination rights with respect to
the Leases:
(A) Tenant shall have the right to terminate without cause and without
the payment of a Termination Fee (as defined below) any one of the Leases
during the initial five (5) years after the Commencement Date; provided,
however, in the event of a termination without cause pursuant to this
Section 1(A), Tenant shall be obligated to pay Host all Rent and other sums
due to Host with respect to the Lease being so terminated through the date
of such termination.
(B) In the event Tenant shall have terminated one of the Leases during
the initial five (5) years after the Commencement Date pursuant to
Section 1(A) above, Tenant shall have the right to terminate without cause
one more of the Leases during the initial five (5)
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years after the Commencement Date by paying to Host the sum of (i) the
applicable Termination Fee (as defined below) for the Lease being so
terminated, as is set forth in Section 1(F) below, and (ii) all Rent and
other sums due to Host with respect to the Lease being so terminated
through the date of such termination.
(C) In the event Tenant shall have terminated two of the Leases during
the initial five (5) years after the Commencement Date pursuant to Sections
1(A) and (B) above, Tenant may not terminate without cause any other Lease
during the initial five (5) years after the Commencement Date without
simultaneously therewith terminating all of the remaining Leases and paying
to Host the sum of (i) the applicable Termination Fee (as defined below) to
Host for each of the Leases being so terminated, as is set forth in Section
1(F) below, and (ii) all Rent and other sums due to Host with respect to each
of the Leases being so terminated through the date of such termination or
terminations.
(D) In addition to and notwithstanding any rights granted to Tenant in
Section 1(A) above, in the event Tenant has not terminated any of the Leases
during the initial three (3) years after the Commencement Date, Tenant shall
have the right to simultaneously terminate without cause and without the
payment of a Termination Fee (as defined below) all but not less than all of
the Leases then in effect after the third (3rd) anniversary of the
Commencement Date but on or prior to the fifth (5th) anniversary of the
Commencement Date; provided, however, in the event of a termination without
cause pursuant to this Section 1 (D), Tenant shall be obligated to pay Host
all Rent and other sums due to Host with respect to the Leases being so
terminated through the date of such termination.
(E) At any time after the fifth (5th) anniversary of the Commencement
Date Tenant shall have the right to terminate without cause and without the
payment of a Termination Fee (as defined below) any of the Leases; provided,
however, in the event of a termination without cause pursuant to this Section
1(E) Tenant shall be obligated to pay Host all Rent and other sums due to
Host with respect to each of the Leases being so terminated through the date
of such termination or terminations; provided further, however, that if
Tenant has, before or after the fifth (5th) anniversary of the Commencement
Date, previously terminated without cause two (2) of the Leases, Tenant may
not thereafter terminate without cause any other Lease without simultaneously
therewith terminating the remainder of the Leases and paying to Host all Rent
and other sums due to Host with respect to each of the Leases being so
terminated through the date of such termination or terminations.
(F) In the event that Tenant terminates any of the Leases pursuant to
Sections 1(B) or (C) above, Tenant shall pay to Host a termination fee or
termination fees (the "Termination Fee" or "Termination Fees") as follows:
(i) If the termination without cause pursuant to Sections 1(B)
and/or (C) above occurs prior to the third (3rd) anniversary of the
Commencement Date, the Termination Fee shall be in an amount equal to the
product of (x) the Base
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Management Fee earned during the first year after the Commencement Date
pursuant to the Lease or Leases being so terminated, multiplied by (y)
three (3). For purposes of calculating the Termination Fee due pursuant
to this Section 1(F)(i), if the termination without cause occurs during
the first year after the Commencement Date, the Base Management Fee
earned during the first year after the Commencement Date pursuant to the
Lease or Leases being so terminated, shall be in an amount equal to the
sum of (x) the Base Management Fee actually paid for the portion of such
first year through the date of termination for the Lease or Leases being
so terminated, and (y) the projected Base Management Fee to be paid from
the date of termination for the Lease or Leases being so terminated for
the remainder of such first year.
(ii) If the termination without cause pursuant to Sections 1(B)
and/or (C) above occurs after the third (3rd) anniversary of the
Commencement Date but prior to the fourth (4th) anniversary of the
Commencement Date, the Termination Fee shall be in an amount equal
to the product of (x) the Base Management Fee earned during the first
year after the Commencement Date pursuant to the Lease or Leases being
so terminated, multiplied by (y) two (2).
(iii) If the termination without cause pursuant to Sections 1(B)
and/or (C) above occurs after the fourth (4th) anniversary but on or
prior to the fifth (5th) anniversary of the Commencement Date, the
Termination Fee shall be in an amount equal to the Base Management Fee
earned during the first year after the Commencement Date pursuant to the
Lease or Leases being so terminated.
(iv) Notwithstanding anything contained in this Section 1(F) to the
contrary, Tenant and Crossroads understand and agree that in no event
shall the Base Management Fee for each of the Leases terminated by Tenant
pursuant to Sections 1(B) and/or (C) above be less than the amounts set
forth on EXHIBIT "B" attached hereto and made a part hereof for the
purposes of calculating the Termination Fee or Termination Fees to be
paid to Host pursuant to Sections 1(F)(i), (ii) and/or (iii) above.
(G) Notwithstanding anything contained in this Section 1 to the
contrary, Host understands and agrees that the termination by Tenant of
a Lease pursuant to the provisions of Section 41 of any of the Leases
shall not be deemed a termination without cause pursuant to Sections
1(A), (B), (C), (D) or (E) above.
(H) Notwithstanding anything contained in Section 1(F) above to the
contrary, Host understands and agrees that in the event Tenant has not
recovered all accrued Negative Base Rent at the time of termination
without cause of any of the Leases pursuant to Section 1(B) and/or (C)
above, the Termination Fee payable incident to such termination shall be
reduced by the amount of Negative Base Rent accrued but unrecovered by
Tenant for the Lease or Leases being so terminated.
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(I) Notwithstanding anything contained in this Section 1 to the
contrary, Tenant and Crossroads understand and agree that the provisions
of this Section 1 shall in no way release or be deemed to release Tenant
from any other obligations Tenant may have incident to the termination of
any of the Leases (whether such termination is with or without cause),
said obligations being more specifically set forth in each of the Leases.
Section 2. EVENTS OF DEFAULT BY TENANT UNDER THE LEASES. Tenant and
Crossroads understand and agree that if an Event of Default by Tenant occurs
under any of the Leases on or prior to the fifth (5th) anniversary of the
Commencement Date, Tenant is obligated to, among other things, pay to Host
the applicable Termination Fee or Termination Fees described in Section 1(F)
above, together with all Rent and other sums due by Tenant to Host pursuant
to such Lease or Leases through the date of such default termination or
terminations. Tenant and Crossroads further understand and agree that if an
Event of Default by Tenant occurs under any of the Leases after the fifth
(5th) anniversary of the Commencement Date, Tenant is obligated to, among
other things, pay the Host all Rent and other sums due by Tenant to Host
pursuant to such Lease or Leases through the date of such default termination
or terminations.
Section 3. LETTER OF CREDIT COVENANTS. In consideration of the agreement
by Host to enter into the Leases with Tenant and to secure the obligations of
Tenant set forth in Sections 1 and 2 above, Tenant and/or Crossroads covenant
and agree to at all times during the Term (as defined below), provide to Host
a letter of credit in an amount not less than (a) $264,000.00 for the initial
three (3) years after the Commencement Date, (b) $176,000.00 from and after
the third (3rd) anniversary of the Commencement Date until the fourth (4th)
anniversary of the Commencement Date, (c) $88,000.00 after the fourth (4th)
anniversary of the Commencement Date and from and through the fifth (5th)
anniversary of the Commencement Date, and (d) the sum of the Percentage Rent
paid by Tenant pursuant to all of the Leases then in effect for the previous
Fiscal Year after the fifth (5th) anniversary of the Commencement Date and at
all times thereafter during the Term (as defined below); provided, however,
in no event shall the amount of the letter of credit furnished to Host
pursuant to (a), (b) or (c) above be less than an amount equal to the sum of
the Percentage Rent paid by tenant pursuant to the Leases then in effect for
the previous Fiscal Year. Tenant and Crossroads understand and agree that
the letter of credit furnished pursuant to this Section 3 shall be issued by
a financial institution reasonably acceptable to Host and shall otherwise be
upon such other terms and conditions as are reasonably acceptable to Host.
Section 4. GUARANTY IN LIEU OF LETTER OF CREDIT.
(A) Notwithstanding anything contained in Section 3 above to the
contrary, at any time during the Term (as defined below), upon provision to
Host of at least ninety (90) days Notice, Crossroads may elect to guaranty
the obligations of Tenant set forth in Sections 1 and 2 above in substitution
for the obligation to furnish the letter of credit described in Section 3
above. In such event Crossroads covenants and agrees that during the Term
(as defined below) and as applicable with the date of such election,
Crossroads will not permit its Net Worth (as defined below) to be less than
(a) $660,000.00 for the initial three (3) years after the Commencement Date,
(b) $440,000.00
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from and after the third (3rd) anniversary of the Commencement Date until
the fourth (4th) anniversary of the Commencement Date and from and through
the fifth (5th) anniversary of the Commencement Date, and (d) in an amount
equal to the sum of the Percentage Rent paid by Tenant pursuant to all of
the Leases then in effect for the previous Fiscal Year from and after the
fifth (5th) anniversary of the Commencement Date and at all time thereafter
during the Term (as defined below).
(B) For purposes of this Section 4, Crossroads understands and agrees
that Net Worth shall mean the sum of the following for Crossroads: (a) the
amount of capital or stated capital (after deducting the cost of any shares
held in its treasury), plus (b) the amount of capital surplus and retained
earnings (or, in the case of a capital or retained earnings deficit, minus
the amount of such deficit), minus (c) the sum of the following (without
duplication of deductions with respect to items already deducted in arriving
at surplus and retained earnings): (1) unamortized debt discount and expense;
and (2) any write-up in the book value of assets resulting from a revaluation
thereof subsequent to the most recent Financials (as defined below) prior to
the date thereof, except any net write-up in value of foreign currency in
accordance with generally accepted accounting principles; provided, however,
that Crossroads covenants and agrees that it will maintain at least forty
percent (40%) of the foregoing Net Worth requirements in liquid assets.
(C) For purposes of this Section 4, Crossroads covenants and agrees to at
all times after its election to so guaranty the obligations of Tenant set
forth in Sections 1 and 2 above and during the Term (as defined below)
provide to Host for each Fiscal Year or other accounting period, statements
of earnings and retained earnings and of changes in financial position for
such period and for the period from the beginning of the respective Fiscal
Year to the end of such period and the related balance sheet as of the end
of such period, together with the notes thereto, all in reasonable detail
and setting forth in comparative form the corresponding figures for the
corresponding period in the preceding Fiscal Year, and prepared in accordance
with generally accepted accounting principles and audited by independent
certified public accounts acceptable to Host in its sole discretion
("Financials").
Section 5. FRANCHISE AGREEMENTS. Host agrees that it will pay any and
all fees or charges necessary to transfer to Tenant any of the Franchise
Agreements applicable to any of the Hotels subject to any of the Leases.
Section 6. TERM. This Agreement shall continue in full force and effect
so long as any of the Leases remain in effect (the "Term").
Section 7. MISCELLANEOUS.
(A) In the event Crossroads elects to guaranty the obligations of
Tenant set forth in Sections 1 and 2 above, Crossroads represents to Host,
as an inducement for Host to enter into the Leases, that Crossroads has
an interest in the financial success of Tenant.
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(B) In the event Crossroads elects to guaranty the obligations of
Tenant set forth in Sections 1 and 2 above, notice of acceptance of the
guaranty obligations of Crossroads by Host is hereby waived by Crossroads.
(C) In the event Crossroads elects to guaranty the obligations of
Tenant set forth in Sections 1 and 2 above, Crossroads understands and
agrees that the liability of Crossroads pursuant to this Agreement shall
in no way be affected by (i) the release or discharge of Tenant in any
creditor's receivership, bankruptcy or other proceedings, (ii) the
impairment, limitation or modification of the liability of Tenant or the
estate of Tenant in bankruptcy, or of any remedy for the enforcement of
Tenant's liability under any of the Leases resulting from the operation
of any present or future provision of the United States Bankruptcy Code or
other statute or from the decision of any court, (iii) the rejection or
disaffirmance of any of the Leases in any such proceedings, (iv) the
assignment or transfer of any of the Leases in a manner prohibited by any
of the Leases, (v) any disability or other defense of Tenant, or (vi) the
cessation for any cause whatsoever, other than Host's fault, of the
liability of Tenant pursuant to any of the Leases.
(D) In the event Crossroads elects to guaranty the obligations of
Tenant set forth in Sections 1 and 2 above, Crossroads understands and
agrees that until all the covenants and conditions in the Leases on
Tenant's part to be performed and observed are fully performed and
observed, Crossroads (i) shall have no right of subrogation against Tenant
by reason of any payments or acts of performance by Crossroads in
compliance with the obligations of Crossroads hereunder, (ii) waives any
right to enforce any remedy which Crossroads now or hereafter shall have
against Tenant by reason of any one or more payments or acts of
performance in compliance with the obligations of Crossroads hereunder,
and (iii) subordinates any lability or indebtedness of Tenant now or
hereafter held by Crossroads to the obligations of Tenant to Host under
the Leases.
(E) Any notice which may or is required to be given hereunder
shall be deemed given when received by personal delivery, federal express
or other overnight delivery service, or by registered or certified United
States mail, addressed to Host, Tenant and/or Crossroads at the addresses
set forth after their respective names below, or at such different
addresses as either party shall advise the other party in writing:
To Host: with copy to:
Host Funding, Inc. Xxxxxx & Xxxxxx
c/o Hunt Properties 000 XxXxxxxx Xxxxxx
0000 Xxxxxxx Xxxxxx Xxxxx 000
Xxxxx 0000 Xxxxxx, Xxxxx 00000
Xxxxxx, Xxxxx 00000 Attn: Xxxxx X. Xxxxxx
Attn: Xxxxxxx XxXxxxx
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To Tenant: with copy to:
Crossroads Hospitality Tenant
Company, L.L.C. Interstate Hotels Corporation
Xxxxxx Plaza Ten Xxxxxx Plaza Ten
000 Xxxxxxxx Xxxxx 000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000 Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx Attn: General Counsel
To Crossroads: with copy to:
Crossroads Hospitality Company, L.L.C. Interstate Hotels Corporation
Xxxxxx Plaza Ten Xxxxxx Plaza Ten
000 Xxxxxxxx Xxxxx 000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000 Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx Attn: General Counsel
(F) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
(G) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their successors and assigns.
(H) 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.
(I) No waiver of any breach of any covenant, condition or
agreement contained herein shall be construed to be a subsequent waiver
of that covenant, condition or agreement or of any subsequent breach
thereof or of this Agreement.
(J) 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 persons or circumstances shall not be affected
thereby and shall be enforceable to the greatest extent permitted by law.
(K) To the extent that any conflict exists between this Agreement
and any of the Leases, this Agreement shall control the understandings
and agreements among the parties respecting the within subject matter.
(L) It is understood and agreed 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 attorneys' fees and other expenses of the party
prevailing in such legal proceedings.
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(M) It is understood and agreed 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 Lease by their duly
authorized officers as of the date first above written.
HOST
HOST FUNDING, INC.,
a Maryland corporation
By: _______________________
Title: ____________________
TENANT
CROSSROADS HOSPITALITY TENANT
COMPANY, L.L.C.,
a Delaware limited liability company
By: _______________________
Title: ____________________
CROSSROADS
CROSSROADS HOSPITALITY
COMPANY, L.L.C.,
a Delaware limited liability company
By: _______________________
Title: ____________________
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