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 (the "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").
WITNESSETH:
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 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 collectively.
NOW, THEREFORE, in consideration of the mutual premises contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknoweldged by the parties hereto, the parties agree as follows:
Section 1. TERMINATION RIGHTS. Notwithstanding anything contained in any
of the Leases to the contrary, the Tenant shall have the following termination
rights with respect to the Leases:
(A) The Tenant shall have the right to terminate any or all of the Leases
at any time after the third (3rd) anniversary of the Commencement Date, with or
without cause and without the payment of any termination fee, upon the provision
to Host of at least ninety (90) days prior written notice of termination so long
as the Tenant shall not have exercised its Initial Without Cause Termination
Right (as defined below) and all obligations of Tenant under such Lease(s) shall
cease as of the effective date of such termination. For purposes hereof, the
term "Initial Without Cause Termination Right" shall mean the right of the
Tenant to terminate, without cause, and without the payment of any termination
fee, any individual Lease during the initial three (3) years after the
Commencement Date. Notwithstanding the foregoing, a termination pursuant to
Section 41 of the Leases shall not be deemed to be an exercise of the Tenant's
Initial Without Cause Termination Right. In addition, if at any time the Tenant
exercises the Initial Without Cause Termination Right, the Tenant shall not have
the right to terminate any other Lease without terminating all of the remaining
Leases.
(B) In the event that the Tenant exercises its Initial Without Cause
Termination Right during the initial three (3) years after the Commencement
Date, the Tenant shall pay to Host a termination fee (the "Termination Fee") as
set forth below if the Tenant terminates, without cause, any other Lease during
the initial five (5) years after the Commencement Date.
(i) If the termination without cause occurs prior to the third anniversary
of the Commencement Date and the Tenant has already exercised the Initial
Without Cause Termination Right for any individual Hotel, the Termination
Fee shall be in an amount equal to the product of (x) the Base Management
Fees earned during the initial year under all of the then currently
effective Leases being terminated, multiplied by (y) three (3).
(ii) If the termination without cause occurs after the third
anniversary of the Commencement Date but prior to the fourth anniversary of
the Commencement Date and the Tenant has already exercised the Initial
Without Cause Termination Right for any individual Hotel, the Termination
Fee shall be in an amount equal to the product of (x) the Base Management
Fees earned during the initial year under all of the other then currently
effective Leases being terminated, multiplied by (y) two (2).
(iii) If the termination without cause occurs after the fourth
anniversary but prior to the fifth anniversary of the Commencement Date and
the Tenant has already exercised the Initial Without Cause Termination
Right for any individual Hotel, the Termination Fee shall be in an amount
equal to the Base Management Fees earned during the initial year under all
of the other then currently effective Leases being terminated.
For purposes of calculating the Termination Fee, if the Tenant terminates
more than one Lease during the first year after the Commencement Date, the Base
Management Fee shall be the actual collected plus projected Base Management Fees
of that first year for the then currently effective Leases being terminated, but
no less than the amounts set forth on EXHIBIT "B" attached hereto and made a
part hereof for each of the respective Hotels.
Notwithstanding the foregoing, in the event that the Tenant has not
recovered all accrued Negative Base Rent upon the termination of any of the
Leases, the Termination Fee, if any, payable hereunder shall be reduced by the
amount of the then outstanding Negative Base Rent. For purposes hereof,
Negative Base Rent shall mean to the extent that at any time during the first
four (4) years after the Commencement Date the Property Cash Flow from the
Leased Property is less than the Base Rent, then Lessee will be allowed to
accrue the difference as Negative Base Rent. The Negative Base Rent shall be
cumulative but shall not bear interest.
Upon the sale of any of the Hotels by Host, Host shall immediately pay to
the Tenant all of the outstanding Negative Base Rent in addition to the Lessor
Cancellation Fee, if applicable, and all other amounts due to Tenant pursuant to
the Lease(s) applicable to such Hotel(s).
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2. FINANCIAL COVENANTS. In consideration of the agreement by the Lessor
to enter into the Leases with the Lessee, Crossroads hereby guarantees the
obligations of the Lessee contained in Section 1 (B) of this Agreement. As part
of the consideration described in the immediately preceding sentence, Crossroads
covenants and agrees that Crossroads will not permit its Net Worth to be less
than (A) $660,000 for the initial three (3) years after the Commencement Date,
(b) $440,000 from and after the third (3rd) anniversary of the Commencement Date
until the fourth anniversary if, but only if, Tenant has exercised the Initial
Without Cause Termination Right, and (c) $220,000 after the fourth (4th)
anniversary from and until the fifth anniversary if, but only if, the Tenant
has exercised the Initial Without Cause Termination Right. For purposes hereof,
Net Worth shall mean the sum of the following for the Tenant: (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 prior to the date thereof, except any net write-up in
value of foreign currency in accordance with generally accepted accounting
principles. In addition, Crossroads agrees that it will maintain at least forty
percent (40%) of the foregoing Net Worth requirements in liquid assets.
Crossroads agrees to pay to Lessor all fees, costs and expenses reasonably paid
or incurred by Lessor in collecting all or any part of the obligations of
Crossroads pursuant to the guaranty described herein.
In connection with Section 2.1, the Tenant shall deliver to Host its annual
financial statements including but not limited to all fiscal year-end financial
statements and balance sheets.
If Tenant has not exercised its Initial Without Cause Termination Right
during the initial three (3) years after the Commencement Date , Crossroads' and
Tenant's obligation pursuant to this Section 2(B) and Section 2(C) hereof shall
immediately cease and be of no further force and effect.
Section 3. TERM. This Agreement shall continue in full force and effect
so long as any of the Leases remain in effect.
Section 4. FRANCHISE AGREEMENTS. Lessor agrees that it will pay any and
all fees or charges necessary to transfer to the Lessee any of the franchise
agreements applicable to any of the Hotels subject to any of the Leases.
Section.5 NOTICES AND REPORTING. 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 Owner and/or Consultant 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:
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Host Funding, Inc.
c/o Hunt Properties
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx XX 00000
Attn: Xxxxxxx XxXxxxx
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 XX 00000 Xxxxxxxxxx XX 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 XX 00000 Xxxxxxxxxx XX 00000
Attn: Xxxxx X. Xxxxxxxx Attn: General Counsel
Section.6 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of Delaware.
Section.7 MISCELLANEOUS.
(A) This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their successors and assigns. This Agreement shall not be
changed orally but may be changed only by a written agreement signed by
Consultant and Owner. 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.
(B) 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.
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.
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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:
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Title:
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TENANT
CROSSROADS HOSPITALITY TENANT
COMPANY, L.L.C.
a Delaware limited liability company
By:
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Title:
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CROSSROADS
CROSSROADS HOSPITALITY
COMPANY, L.L.C.
a Delaware limited liability company
By:
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Title:
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