TERMINATION OF CERTAIN LEASE AGREEMENTS AND
MASTER AGREEMENTS RELATED THERETO
(HOST VENTURES 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 Host Ventures, Inc.,
a Maryland corporation ("Host Ventures"), 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
Xxxxxx Xxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxx (the "Ocean Springs Property"), and
000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx (the "Sarasota Property") (and with
the Ocean Springs Property and the Sarasota Property hereinafter sometimes
collectively referred to as the "Host Ventures Properties").
W I T N E S S E T H:
WHEREAS, Host Ventures (or its predecessor-in-interest, CrossHost), and
Xxxxxx, have previously entered into those certain Lease Agreements
(hereinafter sometimes collectively referred to as the "Host Ventures Lease
Agreements"), more particularly defined and described in EXHIBIT "A" attached
hereto and by reference incorporated herein, pursuant to which Xxxxxx has
leased from Host Ventures the Host Ventures Properties; and
WHEREAS, CrossHost, Inc., a Maryland corporation ("CrossHost"), Lessee
and Crossroads have previously entered into that certain Master Agreement
("Master Agreement II"), dated September 6, 1996, Master Agreement II, among
other things, relating to certain rights and obligations of said parties with
respect to the Ocean Springs Lease Agreement and the Sarasota Lease
Agreement; and
WHEREAS, Crossroads has assigned to Host Ventures its rights under
Master Agreement II, and Host Ventures has assumed the obligations of
CrossHost thereto with regard to the Ocean Springs Lease Agreement and the
Sarasota Lease Agreement; and
WHEREAS, Host Ventures, Host Funding, Lessee and Crossroads desire to,
upon the terms and conditions set forth herein, terminate the Host Ventures
Lease Agreements and Master Agreement II (but only as it relates to the Ocean
Springs Property and the Sarasota Property).
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, Host Ventures, Host Funding, Lessee and Crossroads, where and as
applicable, agree as follows:
1. Host Ventures and Xxxxxx acknowledge and agree that, as of the
Effective Date, the Host Ventures Lease Agreements are hereby terminated and
declared to be of no further force or effect. Incident to such terminations,
Host Ventures and Xxxxxx acknowledge and agree that neither Host Ventures nor
Lessee shall have any further obligations one to the other pursuant to the
Host Ventures 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 Host Ventures Properties, so as to facilitate an orderly and
effective transition of the ongoing operations thereof.
2. Host Ventures, Lessee and Crossroads agree that Master Agreement
II (but only as to the Ocean Springs Lease Agreement and the Sarasota Lease
Agreement) is hereby terminated and declared to be of no further force and
effect. Incident to such termination, Host Ventures, Lessee and Crossroads
acknowledge and agree that Host Ventures, Lessee and Crossroads (but only as
to the Ocean Springs Lease Agreement and the Sarasota Lease Agreement) have
no further obligations one to the other pursuant to Master Agreement II,
monetary, non-monetary, or otherwise, except as hereinafter set forth in this
Agreement.
3. In consideration for the termination of the Host Ventures Lease
Agreements and Master Agreement II (but only as to the Ocean Springs Lease
Agreement and the Sarasota Lease Agreement), Host Ventures and/or Host
Funding agree to on the Effective Date pay or cause to be paid to Lessee
and/or Crossroads the sum of $112,900.00 in cash PLUS the sum of all xxxxx
cash on site as of the Closing Date at the Host Ventures Properties LESS
$47,111.00 (working capital deposits delivered by Host Ventures, or its
predecessor-in-interest, CrossHost, to Lessee upon the commencement of the
Host Ventures Leases) and LESS $19,911.00 (working capital deposits delivered
by Host Ventures to Lessee upon the commencement of the Flagstaff Lease
Agreement).
4. In consideration for the termination of the Host Ventures Lease
Agreements and Master Agreement II (but only as to the Ocean Springs Lease
Agreement and the Sarasota Lease Agreement), and with respect to the Host
Ventures Lease Agreements, Lessee agrees to on the Effective Date transfer
and deliver to Host Ventures (or, at the option of Host Ventures, to BAC)
all assets (other than cash on hand, working capital and capital expenditure
reserves), inventory and equipment delivered by Host Ventures (or its
predecessor-in-interest CrossHost), to Lessee upon the commencement of the
Host Ventures Lease Agreements and Host Ventures 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 Host Ventures Lease Agreements),
inventory and equipment delivered to Lessee by Host Ventures (or its
predecessor-in-interest, CrossHost) upon the commencement of the Host
Ventures Lease Agreements (all pursuant to Section 6.4 of the Host Ventures
Lease Agreements).
5. With respect to the Host Ventures Lease Agreements, Host Ventures
and Lessee agree that all revenues and expenses for the Host Ventures
Properties shall, in a manner reasonably
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acceptable to Host Ventures 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 Host Ventures or its designee.
6. Host Ventures and Lessee, as to the Host Ventures Lease
Agreements, acknowledge and agree that the indemnity obligations of Host
Ventures and Lessee contained in Sections 8 and 23 of the Host Ventures Lease
Agreements (but, as to Lessee, only for events described therein and arising
after the commencement of the Host Ventures Lease Agreement and prior to the
Effective Date, and, as to Host Ventures, only for such events and arising
prior to the commencement of the Host Ventures Lease Agreements or after the
Effective Date) shall survive the execution and closing of the transactions
contemplated by this Agreement for the benefit of Host Ventures, 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 Host Ventures 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 Host Ventures,
jointly and severally, will protect, indemnify, hold harmless and defend
Lessee and Crossroads, their affiliates, subsidiaries, members, officers,
directors, managers, agents and assigns ("Crossroads 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 Crossroads Indemnified Persons by reason of any failure on
the part of Host Ventures to hereafter, and if required, satisfy or comply
with its hereinabove described indemnity obligations.
7. With respect to the Host Ventures Properties, Lessee and
Crossroads acknowledge and agree that any employees or personnel of Lessee
involved in the operation by Lessee of the Host Ventures Properties will be
terminated as of the Effective Date, and any such employees which BAC elects
not to re-employ (the "Non-BAC Employees") shall not be deemed for any reason
to be the employees or personnel of BAC, Host Ventures or Host Funding.
Lessee and Crossroads further acknowledges and agree that from and after the
Effective Date, neither BAC, Host Ventures 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, Host
Ventures 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
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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.
8. Host Ventures, Host Funding, Lessee and Crossroads shall, in
addition to any consideration paid to Lessee and/or Crossroads pursuant to
Section 3 hereof, and prior to the Effective Date, agree upon the appropriate
adjustments to be made between the parties as to payments made or reserved by
Lessee for capital expenditures funded by Lessee pursuant to the Host
Ventures Lease Agreements ($34,837.00). In the event such adjustments result
in Host Ventures and/or Host Funding owing monies to Xxxxxx, said monies
shall be paid to Lessee on or before the Effective Date.
9. 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 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 25,
1998, and relating to the rights of Crossroads as to the sale of such shares
of Host Funding Class A Common Stock.
10. Host Ventures, 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 Host
Ventures holding liens on the Host Ventures Properties having approved this
Agreement and the terms and provisions hereof, and the respective
franchisors pursuant to any existing franchise agreements under which the
Host Venture Properties are operated have approved the transition of the
operations hereof. Xxxxxx and Crossroads also acknowledge and agree that the
performance of the obligations of Host Ventures and Host Funding hereunder is
further subject to the execution by Host Ventures and BAC, of the new
operating or lease agreements with respect to the Host Ventures Properties.
11. Lessee also presently leases from Host Ventures the hotel commonly
known as a Super 8 Motel located at 0000 Xxxxxx, Xxxxxxxxx, Xxxxxxx (the
"Flagstaff Lease Agreement"). With regard to the Flagstaff Lease Agreement,
CrossHost and Lessee acknowledge and agree that the Flagstaff 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 Host Ventures; provided, upon
such termination by Lessee (or upon termination of the Flagstaff Lease
Agreement Host Ventures), Host Ventures shall owe to Lessee a $71,700.00
lease cancellation fee and $35,000.00 for accrued Negative Base Rent (as
defined in the Flagstaff Lease Agreement).
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12. Host Ventures, 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.
13. Host Ventures, 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.
14. Host Ventures, 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.
15. Host Ventures, 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.
16. Host Ventures, 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.
17. Host Ventures, 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.
HOST VENTURES:
HOST VENTURES, INC., a Maryland corporation
By:
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Name:
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Title:
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HOST FUNDING:
HOST FUNDING, INC., a Maryland corporation
By:
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Name:
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Title:
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LESSEE:
CROSSROADS HOSPITALITY TENANT COMPANY,
L.L.C., an affiliate of Crossroads
Hospitality Company, L.L.C.
By:
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Name:
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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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Name:
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Title:
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EXHIBIT "A"
HOST VENTURES LEASE AGREEMENTS
1. Lease Agreement (as from time to time amended, the "Ocean Springs Lease
Agreement"), dated September 6, 1996, covering the Ocean Springs Property,
and executed by CrossHost, as lessor, and Xxxxxx, as lessee, the rights of
CrossHost as lessor thereunder having been assigned by CrossHost to Host
Ventures.
2. Lease Agreement (as from time to time amended, the "Sarasota Lease
Agreement"), dated September 6, 1996, covering the Sarasota Property, and
executed by CrossHost, as lessor, and Xxxxxx, as lessee, the rights of
CrossHost as lessor thereunder having been assigned by CrossHost to Host
Ventures.
