RESTATED AND AMENDED
AGREEMENT REGARDING HOTEL LEASES
(HOST VENTURES PROPERTIES)
This RESTATED AND AMENDED AGREEMENT REGARDING HOTEL LEASES (this
"Agreement") is made effective April 15, 1998 (the "Effective Date"), by and
between HOST FUNDING, INC., a Maryland corporation ("Host Funding"), and
BUCKHEAD AMERICA CORPORATION, a Delaware corporation ("BAC").
W I T N E S S E T H:
WHEREAS, Host Ventures, Inc., a Maryland corporation ("CrossHost"), a
wholly owned subsidiary of Host Funding, holds clear and marketable title to
certain Sleep Inn hotel properties located in Ocean Springs, Mississippi (the
"Ocean Springs Property") and Sarasota, Florida (the "Sarasota Property")
(and said hotel properties hereinafter sometimes collectively referred to as
the "Hotel Properties"); and
WHEREAS, the Hotel Properties are presently leased to Crossroads
Hospitality Tenant Company, LLC, a Delaware limited liability company
("CHTC") pursuant to certain lease agreements being terminated by CrossHost
and CHTC pursuant to that certain Termination of Certain Lease Agreements and
Master Agreements Related Thereto - Host Ventures Properties (the
"Termination Agreement"); and
WHEREAS, Host Ventures, as "lessor," and BAC Hotel Management, Inc., a
Delaware corporation ("Lessee"), as "lessee," are entering into separate and
individual lease agreements (hereinafter sometimes collectively referred to
as the "Leases") pursuant to which Host Ventures will lease to Lessee the
Ocean Springs Property (the "Ocean Springs Lease") and the Sarasota Property
(the "Sarasota Lease"); and
WHEREAS, Host Funding and BAC have previously entered into that certain
Agreement Regarding Hotel Properties (the "Original Agreement"), dated
effective April 15, 1998, and desire to restate and amend the Original
Agreement such that this Agreement will be executed in partial replacement of
and substitution for the Original Agreement.
NOW, THEREFORE, in consideration of the mutual premises contained
herein, and other good and valuable consideration, including the execution of
the Leases, the receipt and sufficiency of which is hereby acknowledged and
confessed by the parties hereto, Host Funding and BAC agree as follows:
1. PURCHASE PRICE. BAC shall, in consideration of the execution of
the Leases, pay and/or deliver to Host Funding the sum of $460,625.00 (the
"Lease Rights Acquisition Fee"), as follows:
(a) BAC's delivery to Host Funding of the sum of $179,828.00 in cash
or other immediately available funds (the "Cash Portion of the Lease Rights
Acquisition Fee") upon the date the Leases are fully executed by all
parties thereto; provided, Host Funding acknowledges and agrees that the
actual Cash Portion of the Lease Rights Acquisition Fee to be delivered to
Host Funding is $179,828.00 LESS the approximate sum of $112,900.00
(approximate net sum to be delivered by BAC, Lessee and/or Host Funding to
CHTC pursuant to the Termination Agreement; and, provided further, Host
Funding acknowledges and agrees that a $36,850.00 portion of the Cash
Portion of the Lease Rights Acquisition Fee may, in lieu of delivery of
same to Host Funding, be used as working capital with respect to the Hotel
Properties;
(b) BAC's delivery to Host Funding of a promissory note (the "Lease
Acquisition Finance Note"), in the original principal amount of $78,122.00,
executed by BAC, payable to Host Funding, bearing no interest prior to
maturity, maturing on the first anniversary of the effective date of the
Leases, and otherwise upon such terms and conditions as are reasonably
acceptable to BAC and Host Funding (the "Finance Note Portion of the Lease
Rights Acquisition Fee"), upon the date the Leases are fully executed by
all parties thereto; and
(c) BAC's delivery to Host Funding, within fifteen (15) days after
the date the Leases are fully executed by all parties thereto, of the
number of unregistered shares of the common stock of BAC having an
aggregate value of $147,400.00 (the "BAC Stock"), for the purposes hereof
the value of the BAC Stock to be deemed to be the average selling price for
the common stock of BAC as reported on NASDAQ for the period of time
beginning ten (10) days prior to the date the Leases are fully executed by
all parties thereto, and ending ten (10) days after said date (the "BAC
Stock Portion of the Lease Rights Acquisition Fee").
With respect to the Lease Rights Acquisition Fee, Host Funding
acknowledges and agrees that BAC shall receive a $55,275.00 credit (the
"$55,275.00 Portion of the Lease Rights Acquisition Fee") against same for
legal, accounting and other professional fees incurred by BAC incident to the
transactions described herein. Further, BAC and Host Funding agree that, as
among the Hotel Properties and the Leases, the Lease Rights Acquisition Fee
shall be allocated as set forth on EXHIBIT A attached hereto and incorporated
herein by reference for all purposes.
2. LEASE RIGHTS ACQUISITION FEE DEPOSIT. Upon execution of this
Agreement, BAC shall deliver to Host Funding $36,850.00 (the "Lease Rights
Acquisition Fee Deposit"), which shall be paid and applied against the Cash
Portion of the Lease Rights Acquisition Fee; provided, in the event the
transactions contemplated hereby are not consummated for any reason
whatsoever, the Lease Rights Acquisition Fee Deposit will immediately be
returned to BAC by Host Funding, and,
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if Host Funding fails to timely do so, BAC shall have the right to offset
against the next accruing installments of percentage rent due by BAC to BH -
Auburn, L.P. and BH - Findlay, L.P., pursuant to those certain Lease
Agreements with said parties, as applicable (and related to Country Heath Inn
hotel properties located in Auburn, Indiana and Findlay, Ohio), an amount
equal to the Lease Rights Acquisition Fee Deposit, together with interest
accruing thereon at the rate of twelve percent (12%) per annum from the date
the Lease Rights Acquisition Fee Deposit was to be returned by Host Funding
to BAC until the date such obligation of Host Funding is satisfied in full.
3. SECURITY DEPOSITS. Section 48.1 of all of the Leases requires the
delivery to CrossHost of security deposits (collectively, the "Security
Deposits") consisting of the number of shares of the Class A Common Stock of
Host Funding (the "Host Funding Stock") having an aggregate value as
designated by each of the Leases. In consideration of the execution of the
Leases, and with respect to the Security Deposits, BAC agrees to, on or
before fifteen (15) days after the Commencement Date (as defined in each of
the Leases), purchase from Host Funding the number of shares of Host Funding
Stock having an aggregate value of $106,128.00, said $106,128.00 in aggregate
value of shares of Host Funding Stock to be allocated among the Leases and
the Security Deposits as set forth in EXHIBIT B attached hereto and
incorporated herein by reference for all purposes. The price per share of
the Host Funding Stock shall be the average selling price for Host Funding
Stock as reported on the American Stock Exchange for the period of time
beginning ten (10) days prior to the date the Leases are fully executed by
all parties thereto, and ending ten (10) days after said date. The purchase
price for the Host Funding Stock shall be payable by BAC's delivery to Host
Funding of a promissory note (the "Host Funding Stock Note") in the amount of
the purchase price for the Host Funding Stock, executed by BAC, payable to
Host Funding, bearing no interest prior to maturity, maturing on the first
anniversary of the effective date of the Leases, and otherwise upon such
terms and conditions as are reasonably acceptable to BAC and Host Funding.
BAC acknowledges that the Host Funding Stock shall be issued to BAC pursuant
to a private placement and shall be subject to applicable restrictions
imposed upon stock which has not been registered under applicable laws.
Further, BAC understands that if Host Funding files a registration statement
for shares of Host Funding Stock with the United States Securities and
Exchange Commission (other than an S-8 registration or an S-4 registration),
then BAC shall have the right to cause the Host Funding Stock to be included
in such registration provided that: if the registration is filed in
connection with an underwritten public offering, the underwriters shall have
the right to reduce the number of shares of the Host Funding Stock in
proportion to other shares of Host Funding Stock subject to similar
"piggyback" registration rights, and these registration rights shall expire
as soon as, and to the extent that, BAC is eligible to publicly trade the
Host Funding Stock pursuant to Rule 144 of the Securities Act of 1933.
4. AGREEMENTS WITH REGARD TO THE BAC STOCK. With regard to the BAC
Stock delivered to Host Funding pursuant to Paragraph 1(c) hereof, Host
Funding acknowledges that the BAC Stock shall be issued to Host Funding
pursuant to a private placement and shall be subject to applicable
restrictions imposed upon stock which has not been registered under
applicable securities laws. Further, Host Funding understands that if BAC
files a registration statement for shares of its common stock with the United
States Securities and Exchange Commission (other than an S-8
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registration or an S-4 registration), then Host Funding shall have the right
to cause the BAC Stock to be included in such registration PROVIDED that: if
the registration is filed in connection with an underwritten public offering,
the underwriters shall have the right to reduce the number of shares of the
BAC Stock in proportion to other shares of BAC common stock subject to
similar "piggyback" registration rights, and these registration rights shall
expire as soon as, and to the extent that, Host Funding is eligible to
publicly trade the BAC Stock pursuant to Rule 144 of the Securities Act of
1933.
5. EXTRAORDINARY CAPITAL EXPENDITURES. BAC and Host Funding agree
that an amount equal to the aggregate sum of the Lease Acquisition Finance
Note and the Host Funding Stock Note (approximately $184,000.00) shall be
used for the renovation and/or refurbishment of all or certain of the Hotel
Properties, and in amounts and with respect to the Hotel Properties
reasonably agreed upon by BAC and Host Funding pursuant to the applicable
Capital Expenditures Budgets prepared for said Hotel Properties pursuant to
Section 40.1 of the Lease Agreements (the "Extraordinary Capital
Expenditures"); provided, the "Extraordinary Capital Expenditures" shall be
in addition to any capital expenditures made through use of monies reserved
or deposited by CrossHost or Host Ventures, as applicable, pursuant to
Section 40.1 of the Lease Agreements; provided further, if the anticipated
renovation and/or refurbishment of the Hotel Properties is not completed (and
allocable funds are not utilized) prior to the first anniversary of the
effective date of the Leases, BAC agrees or agrees to cause Lessee to deliver
said funds not previously utilized to Host Funding. BAC also agrees or
agrees to cause Lessee to, upon the request of the holder of the mortgage
encumbering the Hotel Properties, furnish such holder with periodic status
and payment reports with respect to all such Extraordinary Capital
Expenditures. All Extraordinary Capital Expenditures so made pursuant to
this Section 6 shall automatically become dollar-for-dollar reductions, first
to the Host Funding Stock Note, and next, to the Lease Acquisition Finance
Note; provided, to the extent an amount equal to the aggregate original sum
of the Lease Acquisition Finance Note and the Host Funding Stock Note are not
utilized for Extraordinary Capital Expenditures prior to the first
anniversary of the effective date of the Leases, any sums remaining unpaid on
the Lease Acquisition Finance Note and/or the Host Funding Stock Note (after
all appropriate credits and/or reductions have been applied against same
pursuant to the provisions of this Section 5) shall, and as applicable,
immediately become due and payable by BAC to Host Funding. Additionally,
Credit Suisse First Boston Mortgage Capital LLC, holder of the existing
mortgage loan with respect to the Ocean Springs Property and the Sarasota
Property, has required Host Ventures to reserve approximately $185,000.00 for
capital expenditures related to the Ocean Springs Property and the Sarasota
Property, and, incident to same, BAC agrees to immediately pay to Host
Funding, for application to the Host Funding Stock Note, $100,000.00 of the
amount required to be so reserved. Notwithstanding anything contained herein
to the contrary, BAC acknowledges that all personal property purchased by
Lessee through use of funds provided pursuant to this Section 5 or Section
40.1 of the Leases, and all personal property purchased with monies provided
to Lessee by Host Ventures or from monies generated through operation of the
Hotel Properties, shall be purchased solely in the name of Host Ventures, and
shall remain the property of Host Ventures (and not BAC or Lessee).
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6. REPRESENTATIONS AND WARRANTIES OF HOST FUNDING. Host Funding, for
itself, and Host Ventures, represents and warrants to BAC and/or Lessee, as
applicable, as follows:
(a) ORGANIZATION AND GOOD STANDING. Host Funding and Host Ventures are
corporations duly organized, validly existing and in good standing
under the laws of the State of Maryland, as applicable, qualified to
do business and in good standing in the states in which the Hotel
Properties are located, and Host Ventures has all right, power and
authority, together with all governmental licenses, authorizations,
consents and approvals, required to own, operate or lease the Hotel
Properties.
(b) AUTHORITY OF HOST FUNDING; ENFORCEABILITY. Host Funding has all
necessary power and authority to enter into this Agreement, to carry
out its obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly authorized,
executed and delivered by Host Funding and this Agreement (and the
obligations of Host Funding set forth herein), assuming due
authorization, execution and delivery by BAC, constitutes the legal,
valid and binding obligation of Host Funding, enforceable against Host
Funding in accordance with its terms, subject to the effect, if any,
of bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting the rights of creditors generally and the
effect, if any, of general principles of equity.
(c) AUTHORITY OF HOST VENTURES; ENFORCEABILITY. Host Ventures has all
necessary power and authority to enter into the Leases, to carry out
its obligations thereunder and to consummate the transactions
contemplated thereby. The Leases have been duly authorized, and,
subject to the provisions hereof, will be executed and delivered by
Host Ventures, and the Leases (and the obligations of Host Ventures
set forth therein), assuming due authorization, execution and delivery
by all other parties thereto, will constitute the legal, valid and
binding obligation of Host Ventures, enforceable against Host Ventures
in accordance with their terms, subject to the effect, if any, of
bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting the rights of creditors generally and the effect, if
any, of general principles of equity.
(d) NO CONFLICTS; CONSENTS (HOST FUNDING). The execution, delivery and
performance of this Agreement by Host Funding and the transactions
contemplated hereby do not and will not:
(i) violate or conflict with the certificate of incorporation or
bylaws or other organizational documents of Host Funding;
(ii) conflict with or violate any law, rule or regulation of, or any
order, writ, judgment, injunction, decree, stipulation,
determination or award entered by or with, any foreign, federal,
state or local governmental authority, body,
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agency official, regulatory or administrative agency, body or
official, or governmental commission, court, tribunal, body,
agency official or arbitral body (singularly and collectively,
"Governmental Authority") applicable to Host Funding or its
business;
(iii) conflict with, result in any breach of, constitute a material
default (or constitute an event which with the giving of notice
or lapse of time, or both, would become or result in a conflict,
breach or default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or
result in the creation of any security interest, pledge,
mortgage, lien, charge, adverse claim of ownership or use or any
encumbrance of any kind (collectively, "Encumbrance") on Host
Funding or its assets pursuant to any agreement, contract or
other instrument, to which Host Funding is a party or by which
any of its assets or properties are bound or affected; or
(iv) require the consent of any third party reasonably necessary to
consummate the transactions contemplated hereby, or, if so
required, has or will be obtained by Host Funding at its sole
cost and expense;
(e) NO CONFLICTS; CONSENTS (HOST VENTURES). The execution, delivery and
performance of the Leases by Host Ventures, the operation of the Hotel
Properties as hotels, and the transactions contemplated thereby will
not:
(i) violate or conflict with the certificate of incorporation or
bylaws or other organizational documents of Host Ventures;
(ii) conflict with or violate any law, rule or regulation of, or any
order, writ, judgment, injunction, decree, stipulation,
determination or award entered by or with, any Governmental
Authority applicable to Host Ventures or its business;
(iii) conflict with, result in any breach of, constitute a material
default (or constitute an event which with the giving of notice
or lapse of time, or both, would become or result in a conflict,
breach or default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or
result in the creation of any security interest, pledge,
mortgage, lien, charge, adverse claim of ownership or use or any
Encumbrance on Host Ventures, or its assets pursuant to any
agreement, contract or other instrument, to which Host Ventures
is a party or by which any of its assets or properties,
including, without limitation, the Hotel Properties, are bound or
affected; or
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(iv) require the consent of any third party reasonably necessary to
consummate the transactions contemplated hereby, or, if so
required, has or will be obtained by Host Ventures, at its sole
cost and expense.
(f) HOTEL PROPERTIES. Host Ventures has good, clear and marketable title
to the Hotel Properties. Except as otherwise disclosed in writing to
BAC, the Hotel Properties are free from any material defect. Each of
the Hotel Properties is zoned, and all governmental approvals have
been obtained, for the current use of each of the Hotel Properties as
hotels.
(g) ADA COMPLIANCE. To the best knowledge of Host Funding, each of the
Hotel Properties is in full compliance with the Americans With
Disabilities Act and all rules and regulations promulgated thereunder
or in connection therewith (the "ADA Act") and neither Host Funding
nor Host Ventures has received notice from any Governmental Authority,
or complaint for allegation from any third party asserting that any of
the Hotel Properties is not in full compliance with the ADA Act.
(h) LITIGATION. There are no pending (or to the best knowledge of Host
Funding, threatened) claims, disputes, actions, suits, arbitrations,
inquiries, audits, proceedings or investigations (or any basis
therefor) by or against Host Funding or Host Ventures or any of their
respective assets or properties, including any of the Hotel
Properties.
(i) BROKERS. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated under this Agreement or the Leases and Host
Funding will indemnify and hold harmless BAC and Lessee from any such
payments alleged to be due through Host Funding or Host Ventures.
(j) ENVIRONMENTAL MATTERS. Other than as found or contained in normal and
customary materials and supplies used in connection with the operation
of the Hotel Properties, there has been no presence, use, generation,
release, discharge, storage, disposal, or transportation of any
Hazardous Materials (as hereinafter defined) on, under, in, about, to,
or from the Hotel Properties. As used herein, the term "Hazardous
Materials" means any hazardous or toxic substances, material or
wastes, including, but not limited to, those substances, materials,
and wastes listed in the United States Department of Transportation
Hazardous Materials Table (49 C.F.R. Section 172.101) or by the
Environmental Protection Agency's hazardous substances (40 CRIER Part
302) and amendments thereto, or such substances, materials,
constituents, and wastes which are currently regulated under any
applicable local, state, or federal law including, without limitation:
(i) petroleum, gasoline or other petroleum derivatives, or additives
to gasoline or other petroleum derivative; (ii) asbestos or asbestos-
containing materials; (iii) polychlorinated biphenyls; (iv) designated
as a "hazardous substance" pursuant to section 307 of the Clean Water
Act (33 U.S.C. Section 1317); (v)
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defined as "hazardous waste" pursuant to section 1004 of
the Resource Conservation and Recovery Act, 42 U.S.C. Section
6903); (vi) defined as a "hazardous substance" pursuant to section
101 of the Comprehensive Environmental Response, Compensation, and
Liability Act, 2 U.S.C. Section 9601 ET SEQ. (42 U.S.C. Section
9601); or (vii) any substance the nature, use, manufacture, or
effect of which render it subject to federal, state, or local
regulation, investigation, removal, or remediation as potentially
hazardous or toxic, injurious to human health or welfare, or
injurious to the environment.
(k) EMPLOYEE MATTERS. Any employees associated with the operations of the
Hotel Properties are employees of CHTC and/or an affiliate of CHTC,
and are not the employees of Host Funding or Host Ventures.
(l) COMPLIANCE WITH LAWS. To the best knowledge of Host Funding, neither
Host Funding nor Host Ventures is in violation of, or has violated,
any applicable Federal, state, local or foreign or other law,
regulation or order or any other requirement of any Governmental
Authority. Host Funding is not now charged with, and to the best
knowledge of Host Funding, neither Host Funding nor Host Ventures is
now under investigation with respect to, any possible violation of any
applicable law, regulation or order, and Host Funding and Host
Ventures have filed all reports required to be filed with any
Governmental Authority on or before the Effective Date.
7. REPRESENTATIONS AND WARRANTIES OF BAC. BAC, for itself and Lessee,
as applicable, represents and warrants to Host Funding and Host Ventures, as
applicable, as follows:
(a) ORGANIZATION AND GOOD STANDING. BAC is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware. Lessee is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and has
all right, power and authority, together with all governmental
licenses, authorizations, consents and approvals, required to operate
or lease the Hotel Properties.
(b) AUTHORITY OF BAC; ENFORCEABILITY. BAC has all necessary power and
authority to enter into this Agreement, to carry out its obligations
hereunder and to consummate the transactions contemplated hereby.
This Agreement has been duly authorized, executed and delivered by BAC
and this Agreement (and the obligations of BAC set forth herein),
assuming due authorization, execution and delivery by Host Funding,
constitutes the legal, valid and binding obligation of BAC,
enforceable against BAC in accordance with its terms, subject to the
effect, if any, of bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting the rights of creditors generally and
the effect, if any, of general principles of equity.
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(c) AUTHORITY OF LESSEE; ENFORCEABILITY. Lessee has all necessary power
and authority to enter into the Leases, to carry out its obligations
thereunder and to consummate the transactions contemplated thereby.
The Leases have been duly authorized, executed and delivered by
Lessee, and the Leases (and the obligations of Lessee set forth
therein), assuming due authorization, execution and delivery by Host
Ventures, constitute the legal, valid and binding obligation of Lessee
enforceable against Lessee in accordance with their terms, subject to
the effect, if any, of bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the rights of creditors
generally and the effect, if any, of general principles of equity.
(d) NO CONFLICTS; CONSENTS (BAC). The execution, delivery and performance
of this Agreement by BAC and the transactions contemplated hereby do
not and will not:
(i) violate or conflict with the certificate of incorporation or
bylaws or other organizational documents of BAC;
(ii) conflict with or violate any law, rule or regulation of, or any
order, writ, judgment, injunction, decree, stipulation,
determination or award entered by or with, any Governmental
Authority applicable to BAC or its business;
(iii) conflict with, result in any breach of, constitute a material
default (or constitute an event which with the giving of notice
or lapse of time, or both, would become or result in a conflict,
breach or default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or
result in the creation of any security interest, pledge,
mortgage, lien, charge, adverse claim of ownership or use or any
encumbrance of any Encumbrance on BAC or its assets pursuant to
any agreement, contract or other instrument, to which BAC is a
party or by which any of its assets or properties are bound or
affected; or
(iv) require the consent of any third party reasonably necessary to
consummate the transactions contemplated hereby, or, if so
required, has or will be obtained by BAC at its sole cost and
expense.
(e) NO CONFLICTS; CONSENTS (LESSEE). The execution, delivery and
performance of the Leases by Lessee, the operation of the Hotel
Properties as hotels, and the transactions contemplated thereby do no
and will not:
(i) violate or conflict with the articles of organization or other
organizational documents of Lessee;
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(ii) conflict with or violate any law, rule or regulation of, or any
order, writ, judgment, injunction, decree, stipulation,
determination or award entered by or with, any Governmental
Authority applicable to Lessee or its business;
(iii) conflict with, result in any breach of, constitute a material
default (or constitute an event which with the giving of notice
or lapse of time, or both, would become or result in a conflict,
breach or default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or
result in the creation of any security interest, pledge,
mortgage, lien, charge, adverse claim of ownership or use or any
Encumbrance on Lessee or its assets pursuant to any agreement,
contract or other instrument, to which Lessee is a party or by
which any of its assets or properties are bound or affected; or
(iv) require the consent of any third party reasonably necessary to
consummate the transactions contemplated hereby, or, if so
required, has or will be obtained by Lessee at its sole cost and
expense.
(f) LITIGATION. There are no pending (or to the best knowledge of BAC,
threatened) claims, disputes, actions, suits, arbitrations, inquiries,
audits, proceedings or investigations (or any basis therefor) by or
against BAC or Lessee or any of their respective assets or properties
which would have a material affect on the ability of BAC to perform
its obligations under this Agreement.
(g) BROKERS. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated under this Agreement or the Leases and BAC
will indemnify and hold harmless Host Funding and Host Ventures from
any such payments alleged to be due through BAC or Lessee.
(h) COMPLIANCE WITH LAWS. To the best knowledge of BAC, neither BAC nor
Lessee is in violation of, and has not violated, any applicable
Federal, state, local or foreign or other law, regulation or order or
any other requirement of any Governmental Authority. BAC is not now
charged with, and to the best knowledge of BAC, neither BAC nor Lessee
is not now under investigation with respect to, any possible violation
of any applicable law, regulation or order, and BAC and Lessee have
filed all reports required to be filed with any Governmental Authority
on or before the Effective Date.
8. EXISTING OBLIGATION. Host Funding (i) acknowledges and agrees that
it owes BAC $20,000.00 for franchise fees related to the Country Hearth Inn
hotel properties described in Section 2 hereof, and (ii) that in order to
satisfy such indebtedness, said $20,000.00 sum may be
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withheld from the first accruing Percentage Rent payments (as defined in the
Leases) due and payable pursuant to the terms of the Leases.
9. POTENTIAL ACQUISITION OF FLORIDA HOLIDAY INN PROPERTIES. Host
Funding has entered into two (2) Agreements of Sale and Purchase
(collectively, the "Agreements of Sale and Purchase") to acquire a Holiday
Inn Hotel & Suites located in Clearwater, Florida, and a Holiday Inn Express
located in Port ▇▇▇▇▇▇, Florida (collectively, the "Florida Hotel
Properties"), copies of the Agreements of Sale and Purchase having been
delivered to BAC by Host Funding. In consideration for Host Funding granting
to BAC the first right of refusal to be the operator and/or lessee of the
Florida Hotel Properties, which right of first refusal is hereby granted, BAC
shall, upon execution of this Agreement, deliver to the Title Company (as
defined in the Agreements of Sale and Purchase) on behalf of Host Funding,
the $25,000.00 Initial Deposits (as defined in the Agreements of Sale and
Purchase) required pursuant to each of the Agreements of Sale and Purchase.
Host Funding will simultaneously with such delivery provide to BAC predated
letters terminating the Agreements of Sale and Purchase twenty-four (24)
hours prior to the expiration of the Due Diligence Period (as defined in the
Agreements of Sale and Purchase). Notwithstanding the foregoing, if for any
reason the transactions contemplated with respect to the Florida Hotel
Properties are not consummated, and, incident thereto, the $25,000.00 Initial
Deposits are forfeited or otherwise not returned to Host Funding, Host
Funding will immediately pay to BAC the sum of $50,000.00, and if Host
Funding fails to timely do so, BAC shall have the right to offset against the
next accruing installments of any percentage rent due by BAC to BH - Auburn,
L.P., and BH -Findlay, L.P., pursuant to those certain Lease Agreements with
said parties, as applicable (and related to Country Hearth Inn hotel
properties located in Auburn, Indiana, and Findlay, Ohio), an amount equal to
$50,000.00, together with interest accruing thereon at the rate of twelve
percent (12%) per annum from the date the $50,000.00 was to be returned by
Host Funding to BAC until the date such obligation of Host Funding is
satisfied in full.
10. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the state in which the Hotel Property in question is
located.
(b) This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their successors and assigns.
(c) 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.
(d) 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.
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(e) 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.
(f) 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.
(g) It us 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.
(h) Host Funding and BAC understand and agree that the performance of
the obligations of said parties hereunder is subject to (i) the respective
lenders and/or mortgagees of Host Ventures holding liens on any of the
Hotel Properties having approved this Agreement and the terms and
provisions hereof, and (ii) the execution of the Leases by Host Ventures
and Lessee. BAC also acknowledges and agrees that the performance of the
obligations of Host Funding hereunder is further subject to the execution
by Host Funding, CHTC, CHC, Host Ventures and CrossHost, Inc., a Maryland
corporation, of that certain document called Termination of Certain Lease
Agreements and Master Agreements Related Thereto (Host Ventures
Properties), reflecting therein, among other subjects, various agreements
between said parties relating to the termination of the leases presently in
existence with respect to the Hotel Properties.
(i) In consideration of the expenses to be incurred by BAC in
pursuing the transactions described herein and in conducting its due
diligence, neither Host Funding nor Host Ventures, nor any of their
officers, employees, representatives and agents shall for a period of forty
(40) days hereafter enter into any negotiations or discussions with any
third party relating to the sale or lease of the Hotel Properties. During
such forty (40) day period, BAC and Host Funding will negotiate in good
faith in order to execute the Leases and related documents contemplated by
this Agreement.
(j) 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.
12
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
HOST FUNDING:
HOST FUNDING, INC., a Maryland corporation
By:
---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
BAC:
BUCKHEAD AMERICA CORPORATION, a
Georgia corporation
By:
---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
13
EXHIBIT A
ALLOCATION OF LEASE RIGHTS ACQUISITION FEE
FINANCE NOTE BAC STOCK PORTION $55,275.00
CASH PORTION OF PORTION OF THE OF THE LEASE PORTION OF THE
LEASE RIGHTS THE LEASE RIGHTS LEASE RIGHTS RIGHTS ACQUISITION LEASE RIGHTS
HOTEL PROPERTY AND LEASE ACQUISITION FEE ACQUISITION FEE ACQUISITION FEE FEE (BY VALUE) ACQUISITION FEE
1. Ocean Springs Property and $313,516.00 $122,397.00 $53,172.00 $100,325.00 $37,622.00
Ocean Springs Lease
2. Sarasota Property and $147,109.00 $57,432.00 $24,950.00 $47,075.00 $17,653.00
Sarasota Lease
14
EXHIBIT B
ALLOCATION IN VALUE OF HOST
FUNDING STOCK AND SECURITY DEPOSITS
LEASE SECURITY DEPOSIT
(Value in Shares of
Host Funding Stock)
--------------------
1. Ocean Springs Lease $72,234.00
2. Sarasota Lease $33,894.00
15
