THIS AGREEMENT is made and entered into on this 23rd day of February,
1998, by and between HOSPITALITY WORLDWIDE SERVICES, INC., a New York
corporation having an address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ("Hospitality"), and WATERMARK INVESTMENTS LIMITED, LLC, a Delaware
limited liability company having an address at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Watermark").
W I T N E S S E T H:
WHEREAS, Watermark entered into an Agreement to Joint Venture on May
12, 1997 (the "Joint Venture Agreement"), with APOLLO REAL ESTATE ADVISORS II,
L.P., a Delaware limited partnership having its principal place of business at
1301 Avenue of the Americas, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Apollo"),
and Hospitality to collectively identify, acquire, renovate, refurbish, operate
and sell hotel properties (the "Business") through individual joint venture
limited liability companies (each a "Project"); and
WHEREAS, pursuant to the terms of the Joint Venture Agreement,
Watermark receives a management fee of one and one-half percent (1 1/2 %) of all
costs (other than soft costs) incurred in acquiring and rehabilitating a
particular Project ("Management Fee Interest") and a percentage equity interest
("Equity Interest") in each Project contingent upon the internal rate of return
on Apollo's capital contribution for such Project; and
WHEREAS, Hospitality is desirous of purchasing all of Watermark's
interest in the Joint Venture Agreement, including its Management Fee Interest
and Equity Interest now existing and any future rights to receive additional
Management Fee Interest and Equity Interest for new Projects and Watermark is
desirous of selling such Management Fee Interest and Equity Interest to
Hospitality.
NOW, THEREFORE, in consideration of the mutual agreements, promises and
undertakings hereinafter set forth, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree that the following shall
constitute the agreement among the parties:
1. Assets To Be Sold. Hospitality shall purchase and acquire from
Watermark, and Watermark shall sell, transfer and assign to Hospitality, the
following described property:
a. Management Fee Interest. All of Watermark's right, title
and interest in and to the Management Fee Interest currently outstanding and
outlined on Schedule A and future Management Fee interests.
b. Equity Interest. All of Watermark's right, title and
interest in and to the Equity Interest currently outstanding and outlined on
Schedule A and future Management Fee Interests in existing Projects and any
Equity Interest that may arise in connection with the Joint Venture Agreement.
c. Other Management Fees. All of Watermark's right, title and
interest in and to fees received in connection with its management related
services currently outstanding and outlined on Schedule A and future Management
Fee interests.
2. Purchase Price. Hospitality shall pay to Watermark One Million Five
Hundred Thousand and no/100 Dollars ($1,500,000.00) (the "Purchase Price") less
any amounts advanced to or Watermark by Hospitality prior to the date of this
Agreement, including One Hundred Fifty Thousand Dollars ($150,000.00) paid to
Watermark on February 9, 1998.
3. Payment of Purchase Price. Hospitality shall pay the full amount of
the Purchase Price to Watermark, in periodic amounts, at the time and equal to
the amounts received by Hospitality in respect of the Management Fee Interest,
the Equity Interest and other related
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management fees earned by Watermark with the outstanding balance of the Purchase
Price becoming due and payable to Hospitality on February 23, 2001 (the "Final
Payment Date"). In the event the total of the periodic amounts received by
February 23, 2001, by Hospitality in respect of the Management Fee Interest, the
Equity Interest and other related management fees earned by Watermark is less
than the Purchase Price, then the Purchase Price shall be adjusted to such
lesser total amount ("Adjusted Purchase Price") and, Hospitality shall be
reimbursed the difference between the Purchase Price and the Adjusted Purchase
Price.
4. Representations And Warranties Of Watermark. Watermark represents
and warrants as of the date of this Agreement and at closing that:
a. Limited Liability Status. Watermark is a limited liability
company, duly organized, validly existing and in good standing under the laws of
Delaware, has an requisite power and authority to consummate the transactions
contemplated by this Agreement and has by proper company proceedings duly
authorized execution and delivery of this Agreement and the consummation of an
transactions contemplated herein.
5. Representations And Warranties Of Hospitality. Hospitality
represents and warrants as of the date of this Agreement and at closing that:
a. Corporate Status. Hospitality is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York, has an requisite power and authority to consummate the transactions
contemplated by this Agreement, and has by proper corporate proceedings duly
authorized the execution and delivery of this Agreement in the consummation of
all transactions contemplated herein.
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b. Compliance. The execution, delivery and performance of this
Agreement will not result in any violation of, or be in conflict with any term
or provision of any charter, code, bylaw, judgment, decree, statute, ruling,
regulation or instrument applicable to Hospitality, and there is no such term or
provision which materially adversely effects, or in the future may, to the best
of its belief, materially adversely effect its business, prospects or condition,
financial or otherwise, or any of its properties or assets.
6. Survival Of Representations and Warranties. All representations and
warranties contained herein, or made in another writing, by the parties in
connection with the transactions contemplated hereby, shall be true and correct
at the closing.
7. Closing Date. The closing of the sale shall take place on February
23, 1998, or any other date that the parties mutually agree upon. The closing of
the sale shall take place on the closing date at Hospitality's offices, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or any other place that the
parties mutually agree upon.
8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
9. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, and delivered or mailed by certified mail:
a. If to Watermark, at its offices at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at any other address furnished to
Hospitality by Watermark in writing; or
b. If to Hospitality, at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at any other address furnished to Watermark
by Hospitality in writing.
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10. Binding Effect. This Agreement shall be binding upon and inure to
the benefits of the parties hereto and their respective successors and assigns.
11. Headings. Headings in this Agreement are for reference and
convenience only and shall not be used to interpret or construe its provisions.
12. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
13. Time of Essence. Time is of the essence of this Agreement.
14. Entire Agreement; Modification. This Agreement supersedes all prior
agreements and constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof. It may not be amended or modified except
by instrument executed by the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
in their respective corporate names by their respective principals on the day
and year first written above.
HOSPITALITY WORLDWIDE SERVICES, INC.,
a New York corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Its: Executive Vice President
WATERMARK INVESTMENTS LIMITED, LLC.,
a Delaware limited liability company
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Its: Treasurer
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TERMINATION AGREEMENT (the "Agreement"), dated September 30,
1999, between Hospitality Worldwide Services, Inc., a New York
corporation ("HWS"), and Watermark Investments Limited, LLC, a
Delaware limited liability company ("Watermark").
--------------------------------------------------------------
HWS purchased all of Watermark's interest in that certain
Agreement to Joint Venture (the "Apollo Agreement"), dated May 12, 1997, by and
among Watermark, HWS and Apollo Real Estate Advisors II, L.P., a Delaware
limited partnership, including the Management Fee Interest and the Equity
Interest (each as defined in the Apollo Agreement); and
HWS and Watermark have determined that it is in their mutual
interests to terminate their relationship and all agreements including, to the
extent valid, the Agreement, dated February 23, 1998 between HWS and Watermark,
upon the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
agreements herein contained, and for other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Termination Payment. At the Closing (as hereinafter
defined), Watermark shall pay to HWS the sum of $885,000 in immediately
available funds by wire transfer to an account of HWS specified in writing by
HWS (the "Termination Payment").
2. Closing. The closing of the transactions contemplated by
this Agreement shall occur immediately after the 1999 Annual Meeting of
Shareholders of HWS (the "Annual Meeting") or such other date and time as may be
mutually agreed upon by the parties hereto (the "Closing").
3. Conditions to Watermark's Obligation. The obligation of
Watermark to make the Termination Payment at the Closing is subject to the
satisfaction or waiver by Watermark of the following conditions:
(a) Press Release. HWS shall have issued a press
release substantially in the form of Exhibit A attached hereto.
(b) Hospitality Restoration and Builders. HWS, within
30 days of the date hereof, shall have offered to sell certain assets of its
wholly-owned subsidiary, Hospitality Restoration and Builders, Inc., a New York
corporation, to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ pursuant to a Purchase and
Sale Agreement with terms and conditions determined by the Board of Directors of
HWS, in its sole discretion.
(c) Repricing of Derivative Securities. The Board,
prior to the mailing of its proxy statement to shareholders for the Annual
Meeting, shall have voted on whether to reprice all existing options to purchase
shares of HWS' Common Stock, $.01 par value per share.
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(d) Website. HWS shall have launched its website,
using the URL address ▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇ or another similar URL address no later
than November 15, 1999.
4. Representations and Warranties of HWS. HWS hereby
represents, warrants and agrees, as of the date of this Agreement as follows:
(a) it has full legal right, power and authority to
execute, deliver and perform this Agreement and consummate the transactions
contemplated hereby;
(b) it has obtained all necessary consents and
approvals to enter into this Agreement and perform the transactions contemplated
hereby; and
(c) upon the execution and delivery of this Agreement
by Watermark, this Agreement constitutes the valid, legal and binding obligation
of HWS enforceable against HWS in accordance with its terms.
5. Representations and Warranties Watermark. Watermark hereby
represents, warrants and agrees, as of the date of this Agreement and as of the
Closing, as follows:
(a) it has full legal right, power and authority to
execute, deliver and perform this Agreement and consummate the transactions
contemplated hereby;
(b) it has obtained all necessary consents and
approvals to enter into this Agreement and perform the transactions contemplated
hereby; and
(c) Upon the execution and delivery of this Agreement
by HWS, this Agreement shall constitute the valid, legal and binding obligations
of Watermark, enforceable against Watermark in accordance with its terms.
6. Release by HWS of Watermark. Upon receipt of the
Termination Payment by HWS (if this Agreement has not previously been terminated
pursuant to Section 8). HWS on behalf of itself and its affiliates, successors
and assigns (the "HWS Releasors"), hereby release and discharge Watermark, its
subsidiaries and affiliates, and its directors, officers, employees, agents,
consultants and their successors and assigns (together, the "Watermark
Releasees") from all actions, causes of action, suits, debts, dues, sums of
money, accounts, reckonings, bonds, bills, specialities, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
executions, claims, and demands whatsoever, in low or equity, which against
Watermark Releasees, the HWS Releasors ever had, now have or hereafter can,
shall or may have relating to the acquisition of Watermark's interest in the
Apollo Agreement from the beginning of the world to the date of this Agreement.
7. Release by Watermark of HWS. Upon receipt of the
Termination Payment by HWS (if this Agreement has not previously been terminated
pursuant to Section 8), Watermark
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on behalf of itself and its affiliates, successors and assigns (the "Watermark
Releasors"), hereby re;leases and discharges HWS, its subsidiaries and
affiliates, and its directors, officers, employees, agents, consultants and its
successors and assigns (together the "HWS Releasees") from all actions, causes
of action, suits, debts, dues, sums of money, accounts, reckonings, bonds,
bills, specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, executions, claims, and demands
whatsoever, in law or equity, which against the HWS Releasees, the Watermark
Releasors ever had, now have or hereafter can, shall or may have relating to the
acquisition of Watermark's interest in the Apollo Agreement from the beginning
of the world to the date of this Agreement.
8. Termination Right. Any time two business days following the
Annual Meeting and prior to receipt of the Termination Payment by HWS, HWS
shall, at its option, have the right to terminate this Agreement. Upon such
termination, this Agreement shall be of no further force or effect except for
Section 11, which shall survive the termination.
9. Unconditional Guarantee. ▇▇▇▇▇▇ ▇▇▇▇▇▇ personally and
unconditionally guarantees the obligations of Watermark under this Agreement.
10. Independent Directors and Chief Executive Officer. The
nominee for the board seat being vacated by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, when filled, shall
be a person who is not (i) currently a partner in any business with any present
member of the Company's Board of Directors (each a "Board Member"), (ii)
currently employed by the same business as any Board Member, or (iii) related to
any Board Member. HWS shall use reasonable efforts to locate such a nominee who
has experience with e-commerce. The nominee for the board seat currently held by
▇▇▇▇▇▇ ▇▇▇▇▇▇ and the person hired to serve as the Chief Executive Officer of
the Company in place of interim Chief Executive Officer ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, shall be
a person who is not (i) currently a partner in any business with any Board
Member, (ii) currently employed by the same business as any Board Member, or
(iii) related to any Board Member.
11. No Admission. In the event that this Agreement is
terminated pursuant to Section 8, nothing in this Agreement shall be interpreted
to constitute a waiver by HWS of any claims against any party that the
acquisition of Watermark's interest in the Apollo Agreement was a breach of
fiduciary duty, ultra ▇▇▇▇▇ and a violation of law, and HWS explicitly reserves
its right to seek recission of that transaction as well as any other legal or
equitable remedies.
12. Expenses. Each party to this Agreement agrees to bear
their own expenses relating to the negotiation, preparation and execution of
this Agreement. In the event of any litigation between the parties hereto
seeking damages as a result of an alleged breach of this Agreement, the
prevailing party, as determined by final, non-appealable order of a court of
competent jurisdiction, shall be entitled to recover its reasonable legal fees
and expenses incurred in connection with such litigation.
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13. Severability. If any provision of this Agreement shall be
held invalid or unenforceable, such invalidity or unenforceability shall attach
only to such provision and shall not in any manner render invalid or
unenforceable any other provisions of this Agreement.
14. Consent to Jurisdiction. Each of the parties hereto hereby
irrevocably submits to the exclusive jurisdiction of the State and Federal
courts located in New York County, New York, for the purposes of any action or
proceeding (each a "Claim") arising out of or relating to this Agreement and
hereby waives, and agrees not to assert in any such action or proceeding that it
is not personally subject to the jurisdiction of the Court, that such Claim is
brought in an inconvenient forum or that the venue is proper. Each of the
parties hereto consents to process being served in any such Claim by mailing a
copy thereof by certified mail, return receipt requested (with a copy to be sent
by facsimile, which shall not constitute service) to the address in effect for
notices to it under this Agreement and agrees that such service upon receipt of
such Claim (other than by facsimile) shall constituted good and sufficient
service of process and notice thereof. Nothing in this paragraph shall affect or
limit any right to serve legal process in any other manner permitted by law.
15. Governing Law. This Agreement and the rights and duties of
the parties hereto shall be governed by and construed in accordance with the
internal laws of the State of New York, without regard to principles of
conflicts of law.
16. Amendments and Waivers to be in Writing. This Agreement
may not be amended, modified or changed, and none of the terms, covenants,
representations, warranties or conditions hereof may be waived, except by a
written instrument signed by the party against whom enforcement of any change or
modification is sought, or in the case of a waiver, by the party waiving
compliance. The failure of any party at any time to require performance of any
provision hereof shall in no manner affect the right at a later time to enforce
same.
17. Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be effective (a)
when personally delivered on a business day during normal business hours at the
address or number designated below or (b) on the business day following the date
of mailing by overnight courier, fully prepaid, addressed to such address,
whichever shall first occur. The addresses for such communications shall be:
If to Watermark:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇
With a copy to:
Winthrop, Stimson, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-▇▇-
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
If to HWS:
Hospitality Worldwide Services, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Any party hereto may from time to time change its address for
notices under this Section 15 by giving notice of such changed address to the
other parties hereto.
18. Headings. The headings herein are for convenience only, do
not constitutes a part of this Agreement, and shall not be deemed to limit or
affect any of the provisions hereof.
19. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
20. Counterparts; Facsimile. This Agreement may be executed in
as many counterparts as may be deemed necessary or convenient, and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed an original, but all of which such counterparts shall
constitute but one and the same agreement. Facsimile signatures to this
Agreement shall be deemed genuine and original.
21. Assignment. Neither this Agreement nor any rights
hereunder may be assigned by any party to this Agreement in whole or in part,
without the prior written consent of all the other parties.
22. Entire Agreement. This Agreement constitutes the entire
understandings of the parties hereto and supersedes all prior agreements or
understandings with respect to the subject matter contained herein.
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IN WITNESS WHEREOF, the undersigned have executed this
Agreement first written above.
HOSPITALITY WORLDWIDE SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
WATERMARK INVESTMENTS LIMITED, LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
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