Employment Agreement between Crestline Capital Corporation and James L. Francis

Summary

This agreement is between Crestline Capital Corporation and James L. Francis, outlining the terms of Mr. Francis's employment as Executive Vice President, Chief Financial Officer, and Treasurer. The contract specifies a two-year initial term starting January 1, 1999, with automatic one-year renewals. Mr. Francis will receive a base annual salary of $330,000, benefits, and reimbursement for business expenses. The agreement details job duties, reporting structure, and conditions for termination by either party, including for cause, without cause, or for good reason, with notice and severance provisions.

EX-10.17 6 dex1017.txt EXHIBIT 10.17 Exhibit 10.17 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is made this 23/rd/ day of June, 1999, by Crestline Capital Corporation, a corporation formed under the laws of the State of Maryland with its principal place of business at 6600 Rockledge Drive, Suite 600, Bethesda, MD 20817 ("Crestline") and James L. Francis, residing at 19205 Autumn Maple Lane, Gaithersburg, MD 20879 ("Mr. Francis"). WHEREAS, Crestline desires to employ Mr. Francis and Mr. Francis desires to be employed by Crestline; and WHEREAS, the parties wish to set forth the terms and conditions of that employment; NOW THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties agree as follows: 1. Term of Employment ------------------ Crestline hereby employs Mr. Francis, and Mr. Francis hereby accepts employment with Crestline, upon the terms and conditions set forth in this Agreement. Unless terminated earlier pursuant to Section 5, Mr. Francis' employment pursuant to this Agreement shall be for the two (2)-year period commencing on January 1, 1999 (the "Commencement Date") and ending on December 31, 2000 (the "Initial Term"), and thereafter shall automatically renew for successive twelve (12) month periods (each of which shall be an "Additional Term"). The Initial Term, together with any Additional Term, shall be referred to herein as the "Employment Period." 2. Title; Duties ------------- (a) Mr. Francis shall be employed as Executive Vice President, Chief Financial Officer and Treasurer of Crestline. Mr. Francis shall report to the President of Crestline (the "President"), who shall have the authority to direct, control and supervise the activities of Mr. Francis. Mr. Francis shall perform such services consistent with his position as may be assigned to him from time to time by the President and are consistent with the bylaws of Crestline, including, but not limited to, managing the financial affairs of Crestline. (b) Mr. Francis' place of employment shall be Bethesda, Maryland, or such other location within a 75-mile radius of the address first written above as the President shall direct; provided, however, that Mr. Francis' duties may require extensive travel. 3. Extent of Services ------------------ (a) General. Mr. Francis agrees not to engage in any business activities ------- during the Employment Period except those which are for the sole benefit of Crestline, and to devote his entire business time, attention, skill and effort to the performance of his duties under this Agreement. Notwithstanding the foregoing, Mr. Francis may (i) engage in personal investments and charitable, professional and civic activities which do not impair the performance of his duties to Crestline, and (ii) with the prior approval of the Board of directors of Crestline (the "Board of Directors"), serve on the boards of directors of corporations other than Crestline, provided, however, that no such approval shall be necessary for Mr. Francis' continued service on any board of directors to which he was elected prior to the date of this Agreement. Mr. Francis shall perform his duties to the best of his ability, shall adhere to Crestline's published policies and procedures, and shall use his best efforts to promote Crestline's interests, reputation, business and welfare. (b) Corporate Opportunities. Mr. Francis agrees that he will not take ----------------------- personal advantage of any business opportunities which arise during his employment with Crestline and which may be of benefit to Crestline. All material facts regarding such opportunities must be promptly reported to the Board of Directors for consideration by Crestline. 4. Compensation and Benefits ------------------------- (a) Salary. Crestline shall pay Mr. Francis a gross base annual salary ------ ("Base Salary") of $330,000. The salary shall be payable in arrears in approximately equal semi-monthly installments (except that the first and last such semi-monthly installments may be prorated if necessary) on Crestline's regularly scheduled payroll dates, minus such deductions as may be required by law or reasonably requested by Mr. Francis. Crestline's Compensation Policy Committee (the "Compensation Committee") shall review his Base Salary annually in conjunction with its regular review of employee salaries and make such adjustments, if any, to his Base Salary as the Compensation Committee shall deem appropriate. (b) Other Benefits. Mr. Francis shall be entitled to paid time off and -------------- holiday pay in accordance with Crestline's policies in effect from time to time and to participate in such life, health, and disability insurance, pension, deferred compensation and incentive plans, stock options and awards, performance bonuses and other benefits as Crestline extends, as a matter of policy, to its executive employees. (c) Reimbursement of Business Expenses. Crestline shall reimburse Mr. ---------------------------------- Francis for all reasonable travel, entertainment and other expenses incurred or paid by Mr. Francis in connection with, or related to, the performance of his duties, responsibilities or services under this Agreement, upon presentation by Mr. Francis of documentation, expense statements, vouchers, and/or such other supporting information as Crestline may reasonably request. 5. Termination ----------- (a) Termination by Crestline for Cause. Crestline may terminate Mr. ---------------------------------- Francis' employment under this Agreement at any time for Cause, upon written notice by -2- Crestline to Mr. Francis. For purposes of this Agreement, "Cause" for termination shall mean any of the following: (i) the conviction of Mr. Francis of, or the entry of a plea of guilty or nolo contendere by Mr. Francis to, any felony; (ii) fraud, misappropriation or embezzlement by Mr. Francis; (iii) Mr. Francis' willful failure or gross negligence in the performance of his assigned duties for Crestline, which failure or negligence continues for more than thirty (30) calendar days following Mr. Francis' receipt of written notice of such willful failure or gross negligence; (iv) Mr. Francis' breach of his fiduciary duty to Crestline; (v) any act or omission of Mr. Francis that has a demonstrated and material adverse impact on Crestline's reputation for honesty and fair dealing; or (vi) the breach by Mr. Francis of any material term of this Agreement. (b) Termination by Crestline or Mr. Francis Without Cause. Either party ----------------------------------------------------- may terminate this Agreement at any time without Cause, upon giving the other party sixty (60) days written notice. At Crestline's sole discretion, it may substitute sixty (60) days salary in lieu of notice. Any salary paid to Mr. Francis in lieu of notice shall not be offset against any entitlement Mr. Francis may have to the Severance Payment pursuant to Section 6(b). (c) Termination by Mr. Francis for Good Reason. Mr. Francis may terminate ------------------------------------------ his employment under this Agreement at any time for Good Reason, upon written notice by Mr. Francis to Crestline. For purposes of this Agreement, "Good Reason" for termination shall mean (i) the assignment to Mr. Francis of substantial duties or responsibilities inconsistent with Mr. Francis' position at Crestline, or any other action by Crestline which results in a substantial diminution of Mr. Francis' duties or responsibilities; (ii) a requirement by Crestline that Mr. Francis work principally from a location outside the 75-mile radius specified in Section 2(b); (iii) Crestline's failure to pay Mr. Francis any Base Salary or other compensation to which he is entitled, other than an inadvertent failure which is remedied by Crestline within thirty (30) days after receipt of written notice thereof from Mr. Francis (or five (5) days for failure to pay Base Salary); or (iv) a substantial reduction in Mr. Francis' aggregate Base Salary and other compensation taken as a whole, excluding any reductions caused by the failure to achieve performance targets. (d) Mr. Francis' Death or Disability. Mr. Francis' employment shall -------------------------------- terminate immediately upon his death or, upon written notice as set forth below, his disability. As used in this Agreement, "Disability" shall mean such physical or mental impairment as would render Mr. Francis eligible to receive benefits under the long-term disability insurance plan then made available by Crestline to its employees. If the Employment Period is terminated by reason of Mr. Francis' Disability, either party shall give thirty (30) days advance written notice to that effect to the other. 6. Effect of Termination --------------------- (a) General. Regardless of the reason for any termination of this ------- Agreement, Mr. Francis shall be entitled to (i) payment of any unpaid portion of his Base Salary through the effective date of termination; (ii) reimbursement for any outstanding reasonable business expense he has incurred in performing his duties hereunder; (iii) continued -3- insurance benefits to the extent required by law; and (iv) payment of any vested but unpaid rights as required independent of this Agreement by the terms of any bonus or other incentive pay or stock plan, or any other employee benefit plan or program of Crestline. (b) Termination by Crestline for Cause or by Mr. Francis Without Good ----------------------------------------------------------------- Reason. If Crestline terminates Mr. Francis' employment for Cause or Mr. ------ Francis terminates his employment without Good Reason, Mr. Francis shall have no rights or claims against Crestline except to receive the payments and benefits described in Section 6(a). (c) Termination by Crestline Without Cause or by Mr. Francis for Good ----------------------------------------------------------------- Reason. If Crestline terminates Mr. Francis' employment without Cause ------ pursuant to Section 5(b), or Mr. Francis terminates his employment for Good Reason pursuant to Section 5(c), Mr. Francis shall be entitled to receive, in addition to the items referenced in Section 6(a), the following: (i) an amount equal to his Base Salary at the rate in effect on his last day of employment for a period of twelve (12) months (the "Severance Payment"). The Severance Payment shall be paid in approximately equal installments on Crestline's regularly scheduled payroll dates, subject to all legally required payroll deductions and withholdings for sums owed by Mr. Francis to Crestline; (ii) continued payment by Crestline for Mr. Francis' life, health and disability insurance coverage during the twelve (12) month severance period referenced in Section 6(c)(i) to the same extent that Crestline paid for such coverage immediately prior to the termination of Mr. Francis' employment and subject to the eligibility requirements and other terms and conditions of such insurance coverage, provided that if any such insurance coverage shall become unavailable during the twelve (12) month severance period, Crestline thereafter shall be obliged only to pay to Mr. Francis an amount equal to the employer premiums for such insurance for the remainder of such severance period; (iii) vesting as of the last day of his employment in any unvested portion of any stock option and any restricted stock previously issued to Mr. Francis; and (iv) a pro-rata share of any bonus to which Mr. Francis otherwise would have been entitled for the fiscal year in which his employment terminates without Cause or for Good Reason. Such pro-rated bonus shall be paid to Mr. Francis within sixty (60) days following the end of the fiscal year in which such termination occurs. (d) Termination Following Change in Control. --------------------------------------- (i) If, by giving sixty (60) days written notice commencing within twelve (12) months following a Change in Control, Crestline (or its successor) terminates Mr. Francis' employment without Cause or Mr. Francis terminates his employment for any reason, he shall be entitled to the Severance Payment, continued insurance benefits, accelerated vesting and pro-rated bonus set forth in Section 6(c). For purposes of this Agreement, a "Change in Control" shall mean any of the -4- following events: (A) The ownership or acquisition (whether by a merger contemplated by Section 6(d)(i)(B) below, or otherwise) by any Person (other than a Qualified Affiliate), in a single transaction or a series of related or unrelated transactions, of Beneficial Ownership of thirty-five percent (35%) or more of (1) Crestline's outstanding common stock (the "Common Stock") or (2) the combined voting power of Crestline's outstanding securities entitled to vote generally in the election of directors (the "Outstanding Voting Securities"); (B) The merger or consolidation of Crestline with or into any other Person other than a Qualified Affiliate, if, immediately following the effectiveness of such merger or consolidation, Persons who did not Beneficially Own Outstanding Voting Securities immediately before the effectiveness of such merger or consolidation directly or indirectly Beneficially Own more than thirty-five percent (35%) of the outstanding shares of voting stock of the surviving entity of such merger or consolidation (including for such purpose in both the numerator and denominator, shares of voting stock issuable upon the exercise of then outstanding rights (including conversion rights), options or warrants) ("Resulting Voting Securities"), provided that, for purposes of this Section 6(d)(i)(B), if a person who Beneficially Owned Voting Securities immediately before the merger or consolidation Beneficially Owns a greater number of the Resulting Voting Securities immediately after the merger or consolidation than the number the Person received solely as a result of the merger or consolidation, that greater number will be treated as held by a Person who did not Beneficially Own Voting Securities before the merger or consolidation, and provided further that such merger or consolidation would also constitute a Change in Control if it would satisfy the foregoing test if rights, options and warrants were not included in the calculation; (C) Any one or a series of related sales or conveyances to any Person other than any one or more Qualified Affiliates of all or substantially all of the assets of Crestline, but excluding sales or conveyances in connection with either the normal expiration or other termination of Crestline's hotel leases with Host Marriott Corporation or the affiliates of Host Marriott Corporation, or the termination of such hotel leases following a Tax Law change, as defined herein; (D) Incumbent directors cease to be a majority of the members of the Board, where an "Incumbent Director" is (1) an individual -5- who is a member of the Board on the effective date of this Agreement or (2) any new director whose appointment or election by the Board or whose nomination for election by the stockholders was approved by a majority of the persons who were already Incumbent Directors, other than any individual who assumes office initially as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; (E) Any other event that the Board determines, in its discretion and with reference to "Change in Control," would materially alter the structure or business of the Company or its ownership; or (F) A Change in Control shall also be deemed to have occurred immediately before the completion of a tender offer for Crestline's securities representing more than thirty five percent (35%) of the Outstanding Securities, other than a tender offer by a Qualified Affiliate. (G) For purposes of this Agreement, the following definitions shall apply: (1) "Beneficial Ownership," "Beneficially Owned" and "Beneficially Owns" shall have the meanings provided in Exchange Act Rule 13d-3; (2) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended; (3) "Person" shall mean any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), including any natural person, corporation, trust, association, company, partnership, joint venture, limited liability company, legal entity of any kind, government, or political subdivision, agency or instrumentality of a government, as well as two or more Persons acting as a partnership, limited partnership, syndicate or other group for the purpose of acquiring, holding or disposing of Crestline securities; and (4) "Qualified Affiliate" shall mean (i) any directly or indirectly wholly owned subsidiary of Crestline, (ii) any employee benefit plan (or related trust) sponsored or maintained by Crestline or by any entity controlled by Crestline; or (iii) any Person consisting of one or more individuals who are then Crestline's Chief Executive Officer or any other named executive officer (as defined in Item 402 of Regulation S-K under the -6- Securities Act of 1933) of Crestline as indicated in its most recent securities filing made before the date of the transaction. (ii) (A) In the event that any Severance Payment, insurance benefits, accelerated vesting, pro-rated bonus or other benefit payable to Mr. Francis shall (1) constitute "parachute payments" within the meaning of Section 280G (as it may be amended or replaced) of the Internal Revenue Code (the "Code") ("Parachute Payments") and (2) be subject to the excise tax imposed by Section 4999 (as it may be amended or replaced) of the Code ("the Excise Tax"), then Crestline shall pay to Mr. Francis an additional amount (the "Gross-Up Amount") such that the net benefits retained by Mr. Francis after the deduction of the Excise Tax (including interest and penalties) and any federal, state or local income taxes (including interest and penalties) upon the Gross-Up Amount shall be equal to the benefits that would have been delivered hereunder had the Excise Tax not been applicable and the Gross-Up Amount not paid. (B) For purposes of determining the Gross-Up Amount: (1) Parachute Payments provided under arrangements with Mr. Francis other than the Plan and this Agreement, if any, shall be taken into account in determining the total amount of Parachute Payments received by Mr. Francis so that the amount of excess Parachute Payments that are attributable to provisions of the Plan and Agreement is maximized; and (2) Mr. Francis shall be deemed to pay federal, state and local income taxes at the highest marginal rate of taxation for Mr. Francis' taxable year in which the Parachute Payments are includable in Mr. Francis' income for purposes of federal, state and local income taxation. (C) The determination of whether the Excise Tax is payable, the amount thereof, and the amount of any Gross-Up Amount shall be made in writing in good faith by a nationally recognized independent certified public accounting firm approved by Crestline and Mr. Francis, such approval not to be unreasonably withheld (the "Accounting Firm"). If such determination is not finally accepted by the Internal Revenue Service (or state or local revenue authorities) on audit, then appropriate adjustments shall be computed based upon the amount of Excise Tax and any interest or penalties so determined; provided, however, that Mr. Francis in no event shall owe Crestline any interest on any portion of the Gross-Up Amount that is returned to Crestline. For purposes of making the calculations required by this Section 6(d)(ii), to the extent not otherwise specified herein, reasonable assumptions and approximations may be made with respect to applicable taxes and reasonable, good faith interpretations of the Code may be relied upon. Crestline and Mr. Francis shall furnish such information and documents as may be reasonably requested in connection with the performance of the calculations under this Section 6(d)(ii). Crestline shall bear all costs incurred in connection with the performance of the calculations contemplated by this Section 6(d)(ii). Crestline shall pay the Gross-Up Amount to Mr. Francis no later than sixty (60) days following receipt of the Accounting Firm's determination of the Gross-Up Amount. -7- (e) Termination Following Tax Law Change. If, by giving sixty (60) days ------------------------------------ written notice commencing within twelve (12) months following a Tax Law Change, Crestline terminates Mr. Francis' employment without Cause or Mr. Francis terminates his employment for any reason, he shall be entitled to the Severance Payment, accelerated vesting and pro-rated bonus set forth in Section 6(c). For purposes of this Agreement, a "Tax Law Change" shall mean any change in the Code (including, without limitation, a change in the United States Treasury regulations promulgated thereunder), or in the judicial or administrative interpretations of the Code, which would permit Host Marriott Corporation or another entity or entities in which Host Marriott Corporation owns a substantial economic interest to operate all or substantially all the hotels owned by Host Marriott Corporation or such affiliated entity or entities without adversely affecting Host Marriott Corporation's qualification for taxation as a real estate investment trust under applicable Code provisions. (f) Termination In the Event of Death or Disability. ----------------------------------------------- (i) If Mr. Francis' employment terminates in the event of his death, any unvested portion of any stock option and any restricted stock previously issued to Mr. Francis shall become fully vested as of the date of his death. In addition, Mr. Francis' estate shall be entitled to receive a pro-rata share of any performance bonus to which he otherwise would have been entitled for the fiscal year in which his death occurs. (ii) In the event Mr. Francis' employment terminates due to his Disability, he shall be entitled to receive his Base Salary until such date as he shall commence receiving disability benefits pursuant to any long-term disability insurance provided to him by Crestline. In addition, as of the effective date of the termination notice specified in Section 5(d), Mr. Francis shall vest in any unvested portion of any stock option and any restricted shares previously granted to him by Crestline. Mr. Francis also shall be entitled to receive a pro-rata share of any performance bonus to which he otherwise would have been entitled for the fiscal year in which his employment terminates due to his Disability. 7. Confidentiality --------------- (a) Definition of Proprietary Information. Mr. Francis acknowledges that ------------------------------------- he may be furnished or may otherwise receive or have access to confidential information which relates to Crestline's past, present or future business activities, strategies, services or products, research and development; financial analysis and data; improvements, inventions, processes, techniques, designs or other technical data; profit margins and other financial information; fee arrangements; terms and contents of leases, asset management agreements and other contracts; tenant and vendor lists or other compilations for marketing or development; confidential personnel and payroll information; or other information regarding administrative, management, financial, marketing, leasing or sales activities of Crestline, or of a third party which provided proprietary information to Crestline on a confidential basis. All such information, including any materials or documents containing such information, shall be considered by -8- Crestline and Mr. Francis as proprietary and confidential (the "Proprietary Information"). (b) Exclusions. Notwithstanding the foregoing, Proprietary Information ---------- shall not include (i) information disseminated by Crestline to third parties in the ordinary course of business; or (ii) information in the public domain not as a result of a breach of any duty by Mr. Francis or any other person. (c) Obligations. Both during and after the Employment Period, Mr. Francis ----------- agrees to preserve and protect the confidentiality of the Proprietary Information and all physical forms thereof, whether disclosed to him before this Agreement is signed or afterward. In addition, Mr. Francis shall not (i) disclose or disseminate the Proprietary Information to any third party, including employees of Crestline without a legitimate business need to know; (ii) remove the Proprietary Information from Crestline's premises without a valid business purpose; or (iii) use the Proprietary Information for his own benefit or for the benefit of any third party. (d) Return of Proprietary Information. Mr. Francis acknowledges and agrees --------------------------------- that all the Proprietary Information used or generated during the course of working for Crestline is the property of Crestline. Mr. Francis agrees to deliver to Crestline all documents and other tangibles (including diskettes and other storage media) containing the Proprietary Information at any time upon request by the Board of Directors during his employment and immediately upon termination of his employment. 8. Noncompetition -------------- (a) Restriction on Competition. For twelve (12) months following the -------------------------- expiration or termination of Mr. Francis' employment by Crestline for any reason (the "Restricted Period"), Mr. Francis agrees not to engage, directly or indirectly, as an owner, employee, consultant, partner, principal, agent, representative, stockholder, or in any other individual, corporate or representative capacity, in any of the following: (i) acting as a lessee for public or private real estate investment trusts; (ii) asset management for hotel, independent living, assisted living or health-care communities, or (iii) any other business that Crestline conducts as of the date of Mr. Francis' termination of employment; provided, however, Mr. Francis shall not be deemed to have violated this Section 8(a) solely by reason of his ownership of five percent (5%) or less of the outstanding stock of any publicly traded corporation or other entity. (b) Non-Solicitation of Clients. During the Restricted Period, Mr. Francis --------------------------- agrees not to solicit, directly or indirectly, on his own behalf or on behalf of any other person(s), any client of Crestline to whom Crestline had provided services at any time during Mr. Francis' employment with Crestline in any line of business that Crestline conducts as of the date of Mr. Francis' termination of employment or that Crestline is actively soliciting, for the purpose of marketing or providing any service competitive with any service then offered by Crestline. (c) Non-Solicitation of Employees. During the Restricted Period, Mr. ----------------------------- Francis agrees that he will not, directly or indirectly, hire or attempt to hire or cause any business, other -9- than an affiliate of Crestline, to hire any person who is then or was at any time during the preceding six (6) months an employee of Crestline and who is at the time of such hire or attempted hire, or was at the date of such employee's separation from Crestline, either (i) in Grade Level 56 or above, or (ii) a Crestline director, vice president, senior vice president or executive vice president. (d) Acknowledgement. Mr. Francis acknowledges that he will acquire much --------------- Proprietary Information concerning the past, present and future business of Crestline as the result of his employment, as well as access to the relationships between Crestline and its clients and employees. Mr. Francis further acknowledges that the business of Crestline is very competitive and that competition by him in that business during his employment, or after his employment terminates, would severely injure Crestline. Mr. Francis understands and agrees that the restrictions contained in this Section 8 are reasonable and are required for Crestline's legitimate protection, and do not unduly limit his ability to earn a livelihood. (e) Exception. Notwithstanding any other provision of this Agreement, Mr. --------- Francis shall not be subject to the provisions of Section 8(a)-(d) of this Agreement if his employment is terminated by Crestline (or its successor) or Mr. Francis following a Change in Control in accordance with Section 6(d) or following a Tax Law Change in accordance with Section 6(e) of this Agreement. 9. Employee Representation ----------------------- Mr. Francis represents and warrants to Crestline that he is not now under any obligation of a contractual or other nature to any person, business or other entity which is inconsistent or in conflict with this Agreement or which would prevent him from performing his obligations under this Agreement. 10. Arbitration ----------- (a) Any disputes between Crestline and Mr. Francis in any way concerning Mr. Francis' employment, the termination of his employment, this Agreement or its enforcement shall be submitted at the initiative of either party to mandatory arbitration in Maryland before a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association, or its successor, then in effect. The decision of the arbitrator shall be rendered in writing, shall be final, and may be entered as a judgment in any court in the State of Maryland. The parties irrevocably consent to the jurisdiction of the federal and state courts located in Maryland for this purpose. Each party shall be responsible for its or his own costs incurred in such arbitration and in enforcing any arbitration award, including attorneys' fees and expenses. (b) Notwithstanding the foregoing, Crestline, in its sole discretion, may bring an action in any court of competent jurisdiction to seek injunctive relief and such other relief as Crestline shall elect to enforce Mr. Francis' covenants in Sections 7 and 8 of this Agreement. -10- 11. Miscellaneous ------------- (a) Notices. All notices required or permitted under this Agreement shall ------- be in writing and shall be deemed effective (i) upon personal delivery, (ii) upon deposit with the United States Postal Service, by registered or certified mail, postage prepaid, or (iii) in the case of facsimile transmission or delivery by nationally recognized overnight deliver service, when received, addressed as follows: (i) If to Crestline, to: Crestline Capital Corporation 6600 Rockledge Drive Suite 600 Bethesda, MD 20817 Attention: Tracy M.J. Colden Fax No. 240 ###-###-#### (ii) If to Mr. Francis, to: Mr. James L. Francis 19205 Autumn Maple Lane Gaithersburg, MD 20879 or to such other address or addresses as either party shall designate to the other in writing from time to time by like notice. (b) Pronouns. Whenever the context may require, any pronouns used in this -------- Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns and pronouns shall include the plural, and vice versa. (c) Entire Agreement. This Agreement constitutes the entire agreement ---------------- between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement. (d) Amendment. This Agreement may be amended or modified only by a written --------- instrument executed by both Crestline and Mr. Francis. (e) Governing Law. This Agreement shall be construed, interpreted and ------------- enforced in accordance with the laws of the State of Maryland, without regard to its conflicts of laws principles. (f) Successors and Assigns. This Agreement shall be binding upon and inure ---------------------- to the benefit of both parties and their respective successors and assigns, including any entity with which or into which Crestline may be merged or which may succeed to its assets or business or any entity to which Crestline may assign its rights and obligations under this Agreement; provided, however, that the obligations of Mr. Francis are personal and shall not be assigned or delegated by him. -11- (g) Waiver. No delays or omission by Crestline or Mr. Francis in ------ exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by Crestline or Mr. Francis on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion. (h) Captions. The captions appearing in this Agreement are for convenience -------- of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement. (i) Severability. In case any provision of this Agreement shall be held by ------------ a court or arbitrator with jurisdiction over the parties to this Agreement to be invalid, illegal or otherwise unenforceable, such provision shall be restated to reflect as nearly as possible the original intentions of the parties in accordance with applicable law, and the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby. (j) Counterparts. This Agreement may be executed in two or more ------------ counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. JAMES L. FRANCIS CRESTLINE CAPITAL CORPORATION ________________________________ By: ________________________________ Tracy M. J. Colden Senior Vice President -12-