CONTRACT AMENDMENT NO.1
THIS INSTRUMENT is entered into as of the 31st day of October, 1996 by SB
Motel Richmond Corp., SB Motel Durham-Research Triangle Park Corp., SB Motel
Cary Corp., SB Motel Statesville Corp., SB Motel Wilmington Corp., SB Motel
Columbia Corp., SB Motel Charleston Corp., SB Motel Albany Corp., SB Motel
Virginia Beach Corp., SB Motel ▇▇▇▇▇▇-▇▇▇▇ Corp., SB Motel Raleigh Corp., and SB
Motel Charlotte I-85 Corp. (collectively, "Sellers"), ▇▇▇▇▇▇ Hotel Properties
Corp. ("Purchaser") and ▇▇▇▇▇▇ Hotels Corporation ("▇▇▇▇▇▇").
WHEREAS, Purchaser entered into an Agreement of Purchase and Sale dated
September 27, 1996 (the "Agreement") with Sellers covering twelve properties in
the States of North Carolina, South Carolina, Georgia and Virginia
(collectively, the "Premises"); and
WHEREAS, ▇▇▇▇▇▇, Sellers and Purchaser desire to amend Sections 3.1, 3.2,
15.7 and 16.10 of the Agreement as set forth below. All terms not defined herein
shall have the meanings ascribed to them in the Agreement.
NOW THEREFORE, ▇▇▇▇▇▇, Sellers and Purchaser hereby agree that the
Agreement is hereby amended as follows:
1. Section 3.1 of the Agreement is hereby amended to extend the Feasibility
Period from October 31, 1996 to and including November 15, 1996. Hudson,
Sellers, and Purchaser agree that none of the terms, conditions and covenants
of the Agreement have been waived, except that ▇▇▇▇▇▇ and Purchaser hereby
acknowledge their approval of and satisfaction with the following due
diligence matters:
a. Property Appraisals.
b. Financial Statements and Audited Financials for the Premises.
c. Engineering and Site Inspection Reports; provided, however, that
▇▇▇▇▇▇, Sellers and Purchaser acknowledge and agree that to the
extent any of work agreed to by Sellers in a letter dated October 15,
1996, a copy of which is attached hereto and incorporated herein by
reference as Exhibit "A", is not completed prior to Closing, ▇▇▇▇▇▇
and Purchaser shall be entitled to a closing adjustment for the cost
of such uncompleted work.
d. Environmental, with the exception of the Columbia, South Carolina
property, for which property Purchaser has requested further
information and reserves its right to object upon receipt and review
of such information.
2. Section 3.2 of the Agreement is hereby deleted in its entirety and replaced
with the following: "If Purchaser shall terminate this Agreement as permitted
pursuant to Section
3.1 on or before the last day of the Feasibility Period, then Purchaser shall
be entitled to a refund of the Deposit less $50,000, and Sellers shall be
entitled to immediate payment from Escrow Agent of such $50,000 portion of
the Deposit as option money and consideration for the Feasibility Period and
the opportunity to conduct due diligence on the Premises during the
Feasibility Period."
3. The Closing Date shall not be affected by the extension hereunder of the
Feasibility Period.
4. Sellers hereby withdraw its Cure Notice dated October 28, 1996 in its
entirety (without prejudice to its right to resubmit a Cure Notice at least
three days prior to the expiration of the Feasibility Period, as hereby
extended, and that Section 4.1 of the Agreement is hereby amended to reflect
the foregoing), such that the Cure Notice is null and void and of no force
and effect.
5. Section 15.7(a) is hereby amended to delete "within five (5) Business Days
after the expiration of the Feasibility Period," and replace it with "by
November 7, 1996,".
6. Section 15.7(b) is hereby amended to delete the last sentence in its entirety
and replace it with "Sellers agree to indicate to Purchaser by November 7,
1996 whether they will request a Sellers Nominee to be placed on the Board
immediately following Closing.".
7. Section 16.10 is deleted in its entirety and replaced by the following:
"It shall be a condition precedent to the obligation of Sellers to Purchaser
hereunder that ▇▇▇▇▇▇ shall have satisfied each and all of the obligations of
▇▇▇▇▇▇ hereunder at Closing. Notwithstanding anything to the contrary herein,
Purchaser shall have no liability for the representations and warranties of,
nor obligation to fulfill or perform any of the covenants or obligations of
▇▇▇▇▇▇ which arise hereunder, under the Note, for the registration of the
Shares, or otherwise."
8. ▇▇▇▇▇▇, Sellers and Purchaser acknowledge and agree that, except as modified
by this Contract Amendment No.1, all other terms and conditions of the
Agreement shall remain in full force and effect, including, but not limited
to, Purchaser's right to terminate the Agreement at any time prior to the
expiration of the Feasibility Period by delivery of a Termination Notice, if
Purchaser is dissatisfied with any aspect of the Premises in Purchaser's sole
discretion.
2
IN WITNESS WHEREOF, the parties have hereunto set their hands as of the
date first set forth above.
SB Motel Albany Corp.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇ ▇. ▇▇▇▇
Vice President
SB Motel Charleston Corp.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇ ▇. ▇▇▇▇
Vice President
SB Motel Columbia Corp.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇ ▇. ▇▇▇▇
Vice President
SB Motel Richmond Corp.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇ ▇. ▇▇▇▇
Vice President
SB Motel Virginia Beach Corp.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇ ▇. ▇▇▇▇
Vice President
SB Motel Cary Corp.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇ ▇. ▇▇▇▇
Vice President
3
SB Motel Charlotte I-85 Corp.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇ ▇. ▇▇▇▇
Vice President
SB Motel ▇▇▇▇▇▇-▇▇▇▇ Corp.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇ ▇. ▇▇▇▇
Vice President
SB Motel Durham-Research Triangle
Park Corp.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇ ▇. ▇▇▇▇
Vice President
SB Motel Raleigh Corp.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇ ▇. ▇▇▇▇
Vice President
SB Motel Statesville Corp.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇ ▇. ▇▇▇▇
Vice President
SB Motel Wilmington Corp.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇ ▇. ▇▇▇▇
Vice President
4
▇▇▇▇▇▇ Hotels Properties Corp.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇ ▇. ▇▇▇▇
Vice President
▇▇▇▇▇▇ Hotels Corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇ ▇. ▇▇▇▇
Vice President
Escrow Agent is executing this Contract
Amendment No.1 solely to acknowledge its
continued obligations as Escrow Agent
Lawyers Title Insurance Corporation
By: ____________________________
Its:
5
Exhibit "A"
SB Motel Albany Corp., SB Motel Raleigh Corp., SB Motel Cary Corp.,
SB Motel Richmond Corp., SB Motel Charleston Corp., SB Motel
Statesville Corp., SB Motel Charlotte I-85 Corp.,
SB Motel Virginia Beach Corp., SB Motel Columbia Corp., SB
Motel ▇▇▇▇▇▇-▇▇▇▇ Corp., SB Motel Wilmington Corp., SD
Motel Durham-Research Triangle Park Corp.
--------------------------------------------------------------------------------
October 15, 1996
▇▇▇▇▇▇ Hotels Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
RE: Property Visits - Repairs & Maintenance
Dear ▇▇▇▇▇:
Pursuant to our conversations during our property visits on October 2-4, we
discussed how certain repairs and maintenance items would be handled. The
properties will maintain their schedules for maintenance, painting of doors and
trim and carpet cleaning. The following is a summary of the specific items we
discussed at the properties we visited and comments regarding the other
properties which we did not visit together, but which I had visited in the last
few months, as well as the current status of any repairs and maintenance to be
conducted as a result therefrom. As you will see, some items are pending and
require a response from American General Hospitality, Inc. ("▇▇▇▇"), the
property management company, as well as from third party contractors, while
other items have already been corrected.
PROPERTIES VISITED:
Fairfield Inn - Albany, GA
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Carpets: Will be professionally cleaned as scheduled in October 1996.
The property has 6 rooms of carpet to replace rooms as
needed.
Pool: There was a minor pitted area on stairs into the pool. Bids
are being requested to determine an allowance for repainting
only.
Mold and Mildew: The General Manager will provide a list of rooms that need
attention and identify an authorized "knock-down"
contractor. Due to the uncertainty of the extent of the
problem, we agreed an allowance of $13,500 ($450 x 30
rooms) was fair.
In addition, second floor walkways have been rechalked by
the maintenance staff along the building seam to prevent
water, if any, from penetrating from that location.
▇▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
October 15, 1996
Page 2
Fairfield Inn - Cary, NC
--------------------------------------------------------------------------------
Smoke Detectors: Rooms with broken smoke detectors were repaired immediately
by ▇▇▇▇.
Carpets: Will be cleaned as scheduled in October 1996.
Washing Machines: L2 - Value 'frozen'
L1 - Limited hot water } Both have been repaired.
Dryer: Has been repaired.
Painting: Certain areas of the 2nd floor ceilings that have peeling
paint caused by water damage from Hurricanes ▇▇▇▇▇▇ and ▇▇▇▇
will be repaired. Bid pending from Southeastern
Restorations.
Fairfield Inn - Statesville NC
--------------------------------------------------------------------------------
Washing Machine: New machine was purchased and installed on 10/4/96 at a cost
of $6,441.
Hot Water Heater: Boiler B-5 was leaking. A bad pressure valve was replaced by
maintenance on 10/4/96.
Wall Vinyl: General Manager to provide list of rooms requiring
"knock-down" finish and repainting of ceilings, not to
exceed $6,000 ($400 X 15 rooms).
Fairfield Inn - Wilmington, NC
--------------------------------------------------------------------------------
Ice Machine: One machine has been repaired; all operational.
See Exhibit A The only significant item not corrected to date is the roof
repair, for which bids are pending.
Cricket Inn - Charlotte, NC
--------------------------------------------------------------------------------
Ice Machine: One machine has been repaired; needed celenoid switch.
Pool Deck: Awaiting estimate to repair crack.
Bath Tubs: For tubs where the grab bar has been removed, the holes need
to be plugged.
HVAC Covers: Repair or replace as needed; estimated to be 15.
Outside Lights: Two roof mounted outdoor lights have been repaired; new
light bulbs.
Beds: Bedding that is fully "hammocked" should be under warranty
and replaced by manufacturer. One king size bed to be
replaced.
▇▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
October 15, 1996
Page ▇
▇▇▇▇▇▇▇ ▇▇▇ - ▇▇▇▇▇▇▇, ▇▇
--------------------------------------------------------------------------------
Outside Ceilings: Certain areas have water damage and blistering paint from
the Hurricanes. These outside walkway ceilings will be
repaired.
Carpets: To be cleaned in normal maintenance schedule. Room 228's
carpet will be replaced if pet odor persists.
Interior Ceilings: Room 122 had water damage to the ceiling which will be
repaired.
▇▇▇▇▇▇▇ ▇▇▇ - (▇▇▇▇) - ▇▇▇▇▇▇, ▇▇
--------------------------------------------------------------------------------
Roof Leak: The roof on the 5 story tower needs to be inspected for a
solution to stop leaks into rooms 5001 and 5007; bids are
pending.
Carpet: To be cleaned as scheduled in November 1996.
Out of service Rooms 5001 and 5007 will be put back into service upon
rooms: completion of roof repairs.
PROPERTIES NOT VISITED ON OCTOBER 2-4 TRIP, BUT RESPONSES TO ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇'
PROPERTY INSPECTION REPORTS
Cricket Inn - Virginia Beach, VA
--------------------------------------------------------------------------------
Ice Machine: One machine (obsolete bin style) has been broken for years
and will be discarded.
Carpets: To be cleaned as scheduled.
Wall Vinyl: To be repaired by maintenance.
Gutter: To be repaired.
▇▇▇▇▇▇▇▇▇ ▇▇▇ - ▇▇▇ - ▇▇▇▇▇▇, ▇▇
--------------------------------------------------------------------------------
Ceiling Grids: Need to be repainted in first floor rooms (26). Bids
requested.
Room: One leak reported by maintenance man near elevator. To be
inspected and repaired.
▇▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
October 15, 1996
Page ▇
▇▇▇▇▇▇▇▇▇ ▇▇▇ - ▇▇▇▇▇▇▇▇, ▇▇
--------------------------------------------------------------------------------
Roof: Bids to replace sections of the roof are being requested.
Porte-cochere: To be repainted as scheduled.
Emergency Lights: Now operational.
Pool: Bids requested to resurface pool.
Laundry Equipment: All operational.
Fairfield Inn Charleston, SC
--------------------------------------------------------------------------------
California Knock- The two rooms where the maintenance staff performed the
down knock-down application will be redone by an authorized
contractor.
Parking lot: Area of asphalt outside the maintenance office will be
repaired utilizing concrete. Bids pending.
Fairfield Inn Richmond, VA
--------------------------------------------------------------------------------
Washing Machine: One machine was leaking and has been repaired.
Ice Machines: All operational.
After you have an opportunity to review this document, please call me at (212)
▇▇▇-▇▇▇▇ with any comments you may have.
Very truly yours,
/s/ ▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇
Vice President
JPB:lap
cc: E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Hotels Corporation
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Hotels Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇ Boylan, Brown, Code, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇▇ Panovka Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
[Execution Counterpart]
CONTRACT AMENDMENT NO. 2
THIS CONTRACT AMENDMENT NO. 2 (this "Amendment"), made as of the
18th day of November, 1996 by and among ▇▇▇▇▇▇ HOTELS PROPERTIES CORP., a New
York corporation with offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ("Purchaser"), SB MOTEL RICHMOND CORP., SB MOTEL DURHAM-RESEARCH TRIANGLE
PARK CORP., SB MOTEL ▇▇▇▇ CORP., SB MOTEL STATESVILLE CORP., SB MOTEL WILMINGTON
CORP., SB MOTEL COLUMBIA CORP., SB MOTEL CHARLESTON CORP., SB MOTEL ALBANY
CORP., SB MOTEL VIRGINIA BEACH CORP., SB MOTEL DURHM-DUKE CORP., SB MOTEL
RALEIGH CORP. and SB MOTEL CHARLOTTE 1-85 CORP., each a Delaware corporation
with offices at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇.
▇▇▇▇ ▇. ▇▇▇▇, Vice President (collectively, "Sellers") and ▇▇▇▇▇▇ HOTELS
CORPORATION, a New York corporation with offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇").
W I T N E S S E T H:
WHEREAS, Sellers, Purchaser and ▇▇▇▇▇▇ entered into that certain
Agreement of Purchase and Sale, dated September 27, 1996, as amended by (i) that
certain Contract Amendment No. 1, dated October 31, 1996 (the "First Amendment")
and (ii) that certain letter agreement dated November 15, 1996; and the
Agreement of Purchase and Sale as amended by the First Amendment, the "P&S
Agreement"); all capitalized terms not herein defined shall have the meanings
ascribed to such terms in the P&S Agreement;
WHEREAS, Sellers, Purchaser and ▇▇▇▇▇▇ wish to amend the P&S
Agreement as provided below.
NOW THEREFORE, for $1.00 and other good and valuable consideration,
the receipt and sufficiency of which is hereby mutually acknowledged, and the
mutual covenants contained herein, the parties hereto, intending to be legally
bound, hereby agree, and the P&S Agreement is hereby amended, as follows:
1. (a) The Purchase Price is hereby reduced by $600,000 to Sixty
Million Four Hundred Thousand and no/100 Dollars ($60,400,000). Section 2.2 of
the P&S Agreement is hereby deleted in its entirety and the following is hereby
substituted therefor
"2.2. The balance of the Purchase Price ($58,950,000.00) shall
be paid by Purchaser to
Sellers at the Closing (as hereinafter defined) as follows:
(a) The sum of Fifty Three Million Five Hundred Fifty Thousand
and NO/100 Dollars ($53,550,000.00), plus the Stock Price
Adjustment Amount (as hereinafter defined), if any, shall be
paid by Purchaser in cash by wire transfer of immediately
available funds to an account or accounts designated in
writing by Sellers;
(b) ▇▇▇▇▇▇ shall deliver to Sellers (i) a promissory note
executed by ▇▇▇▇▇▇ in the amount of Three Million and NO/100
Dollars ($3,000,000), plus or minus any closing adjustments
made pursuant to Section 9, in the form of Exhibit D, attached
hereto and incorporated herein by reference (the "Note"); and
(c) Purchaser shall deliver to Sellers the lesser of (i)
400,000 shares of the common stock, par value $0.001, of
▇▇▇▇▇▇ (the "▇▇▇▇▇▇ Common Stock") or (ii) that number of
shares of ▇▇▇▇▇▇ Common Stock that is equal to the number
determined by dividing $2,400,000 by the Per Share Market
Price (such number of shares of ▇▇▇▇▇▇ Common Stock determined
in accordance with clauses (i) and (ii) above shall be
referred to herein as the "Shares").
For purposes hereof, the term "Stock Price Adjustment Amount"
shall mean the amount, if any, by which (i) the product of the
Per Share Market Price (as defined below) multiplied by
400,000 is less than (ii) $2,400,000, and the term "Per Share
Market Price" shall mean the average closing price per share
of ▇▇▇▇▇▇ Common Stock on NASDAQ for the five trading days
immediately preceding the Closing Date. If the Closing occurs,
Purchaser will be entitled to a $50,000 credit against the
Purchase Price (which $50,000 represents the deposit
previously paid by Purchaser to Sellers which had been
forfeited)."
(b) Exhibit E of the P&S Agreement is hereby deleted in its entirety
and replaced with the Exhibit E attached hereto and incorporated herein by
reference.
-2-
2. Subpart (k) of Section 5.2 of the P&S Agreement is hereby deleted
in its entirety and replaced with the following:
"(k) An indemnity agreement in the form of Exhibit J; and
(l) Such other instruments as are customarily executed by
sellers to effectuate the sale of property similar to
the Premises, provided that this subpart (1) shall not
require Sellers to incur expenses, liabilities or
obligations in excess of those provided for elsewhere in
this Agreement."
3. The following Section 12.7 is hereby added to the P&S Agreement
immediately following Section 12.6 of the P&S Agreement:
"12.7. (a) Seller's parent corporation, SB Motel Corp., a
Delaware corporation, hereby represents and warrants that, to
SB Motel's knowledge, neither it nor any of its affiliates or
subsidiaries (including, but not limited to, SB Motel Columbia
Corp.) (x) has been named or joined as a party in that certain
litigation in the Court of Common Pleas of the State of South
Carolina captioned ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ v.
Hotel Renovations of Dallas and American General Hospitality
Incorporated, CA No. 95-CP-40-0773 (the "▇▇▇▇▇▇▇ Litigation"),
or (y) is a defendant in or party to any other action or
proceeding of any kind with respect to the claim asserted in
the ▇▇▇▇▇▇▇ Litigation.
The term to "SB Motel Corp.'s knowledge" or any similar
phrase, as used above, shall mean the actual knowledge,
without specific investigation or inquiry, of ▇▇▇▇ ▇. ▇▇▇▇,
Vice President of SB Motel Corp.
(b) The representation and warranty made by SB Motel Corp. in
subsection (a) shall survive the Closing until the fifth
anniversary of the Closing Date or until a sale, assignment or
other transfer of the Premises (or any part thereof) by
Purchaser, if sooner (provided that neither an assignment
pursuant to Section 16.2 of the P&S Agreement nor a grant to a
lender of a deed
-3-
of trust, shall constitute such a sale, assignment or other
transfer). No claim may be asserted by Purchaser under the
foregoing representation or warranty after the expiration of
such survival period, and all claims for breach of such
representation and warranty asserted during such survival
period may continue to be asserted after such survival period
only if during the survival period the claiming party provided
the other party specific and detailed written notice thereof
and commenced and diligently prosecuted a law suit against the
other in connection therewith.
(c) SB Motel Corp. has executed this Agreement solely to
acknowledge its representation and warranty set forth in
subsection 12.7(a)."
4. Sections 12.4 and 12.5 are hereby amended to add the following
sentence as the second sentences of such Sections: "Neither an assignment
pursuant to Section 16.2 hereof nor the execution and delivery of deeds of trust
and mortgages by Purchaser to its lender shall constitute a sale, assignment or
other transfer of the Premises."
5. Section 3.11 of the P&S Agreement is hereby deleted in its
entirety and the following is hereby substituted therefor
"3.11. (a) In the event that on or before the Closing, either
(i) the ground lessor under the Statesville Ground Lease has
not executed and delivered to Purchaser an estoppel
certificate in substantially the form attached hereto as
Exhibit K or in a form which is otherwise reasonably
acceptable to Purchaser, or (ii) a Deed of Easement
substantially in the form attached hereto as Exhibit L or in a
form which is otherwise reasonably acceptable to Purchaser has
not been executed by the parties thereto and delivered to
Purchaser, then Purchaser shall have the right to exclude from
the Premises being purchased and sold hereunder the
Statesville Property, the Statesville Ground Lease and any
Personality, Contracts, Permits, Inventory, Intangible Rights,
books and records, "as-built drawings", documentation,
instrumentation, rights and other aspects of the Premises
which relate to the Statesville Property (collectively, the
"Statesville Premises"). Purchaser's right to
-4-
exclude the Statesville Premises from the Premises may be
exercised by written notice to Sellers on or before the
Closing Date. Any exercise of such right shall be irrevocable.
(b) If the Statesville Premises are excluded from the Premises
being purchased and sold hereunder pursuant to subsection
3.11(a), then the Purchase Price shall be reduced by
$3,741,000.00 (the "Statesville Purchase Price Reduction
Amount") to the sum of Fifty Six Million Six Hundred Fifty
Nine Thousand and No/100 Dollars ($56,659,000.00), and, to
reflect such reduction, Section 2.2 shall be deemed to have
been deleted in its entirety and the following substituted
therefor:
'2.2. The balance of the Purchase Price ($55,209,000.00)
shall be paid by Purchaser to Sellers at the Closing (as
hereinafter defined) as follows:
(a) The sum of Fifty Million Five Hundred Fifty-Seven
Thousand Two Hundred Dollars ($50,557,200.00), plus the
Stock Price Adjustment Amount (as hereinafter defined)
if any, shall be paid by Purchaser in cash by wire
transfer of immediately available funds to an account or
accounts designated in writing by Sellers;
(b) ▇▇▇▇▇▇ shall deliver to Sellers (i) a promissory
note executed by ▇▇▇▇▇▇ in the amount of Two Million Six
Hundred and Twenty Five Thousand Nine Hundred Dollars
($2,625,900), plus or minus any closing adjustments made
pursuant to Section 9, in the form of Exhibit D,
attached hereto and incorporated herein by reference
(the "Note"); and
(c) Purchaser shall deliver to Sellers the lesser of (i)
337,650 shares of the common stock, par value $0.001, of
▇▇▇▇▇▇ (the "▇▇▇▇▇▇ Common Stock") or (ii) that number
of shares of ▇▇▇▇▇▇ Common Stock that is equal to the
number determined by dividing $2,025,900 by the Per
Share Market Price (such determined in accordance with
clauses
-5-
(i) and (ii) above shall be referred to herein as the
"Shares").
For purposes hereof, the term "Stock price Adjustment
Amount" shall mean the amount, if any, by which (i) the
product of the Per Share Market Price (as defined below)
multiplied by 337,650 is less than (ii) $2,025,900, and
the term "Per Share Market Price" shall mean the average
closing price per share of ▇▇▇▇▇▇ Common Stock on NASDAQ
for the five trading days immediately preceding the
Closing Date. If the Closing occurs, Purchaser will be
entitled to a $50,000 credit against the Purchase Price
(which $50,000 represents the deposit previously paid by
Purchaser to Sellers which had been forfeited).'
(c) If the Statesville Premises are excluded from the Premises
being purchased hereunder pursuant to Subsection 3.11(a), any
and all covenants, representations, warranties, obligations
and liabilities set forth herein relating to the Statesville
Premises shall be null and void and of no further force and
effect, and every reference to either SB Motel Statesville
Corp. or any of the Statesville Premises shall be stricken
from the provisions hereof, in each case as if the Statesville
Premises had never been the subject of this Agreement. If the
Statesville Premises are excluded from the Closing pursuant to
this Section 3.11, SB Motel Statesville Corp. shall use good
faith efforts (which shall not include the expenditure of any
funds or the making of any changes, alterations or
improvements to any Premises) to assist Purchaser to obtain
the documents attached hereto as Exhibits K and L (or
substitutes reasonably acceptable to Purchaser) prior to
December 31, 1996. If the documents attached hereto as
Exhibits K and L (or substitutes reasonably acceptable to
Purchaser) can be obtained on or prior to December 31, 1996,
Purchaser and SB Motel Statesville Corp. shall close on the
Statesville Premises on or before December 31, 1996 at the
Statesville Purchase Price Reduction Amount, and otherwise on
the terms set forth in this Agreement, with the purchase price
thereof paid in the same proportions of cash, a promissory
note executed by
-6-
▇▇▇▇▇▇, and shares of ▇▇▇▇▇▇ Common Stock as set forth in
Section 2.2 as amended by this Contract Amendment No. 2. If
the Closing of the Statesville Premises has not occurred on or
before December 31, 1996 as contemplated hereunder, then
Purchaser shall (x) have no right or claim whatsoever in or
to the Statesville Premises and shall, if so requested by
Sellers, promptly execute a recordable instrument evidencing
same and waiving all rights with respect to the Statesville
Premises and (y) promptly deliver to Sellers all Statesville
Premises related due diligence reports, surveys and other
materials in Purchaser's possession together with
documentation sufficient to grant to Sellers (and their
assignees) full right and title thereto."
6. Purchaser acknowledges that it has completed its investigation of
the Premises and is satisfied with all aspects thereof. Accordingly, Section 3.4
of the P&S Agreement and Section 1 of the First Amendment are hereby deleted in
their entirety and each of the parties hereto waives any and all rights it had
or may have had under such Sections. Purchaser hereby waives any and all
objections it had or might have with respect to the condition of the Premises
and agrees that Sellers shall have no obligations whatsoever to cure any defects
in or problems with the Premises or to incur any costs or expenses in connection
therewith, whether such defects or problems are set forth in Exhibit A to the
First Amendment, in the ▇▇▇▇ Damage Schedule, or otherwise. Purchaser waives any
and all rights which it might have under or in connection with the ▇▇▇▇ Damage
Schedule and/or the letter from Sellers which is attached as Exhibit A to the
First Amendment (and such schedule and letter shall be null and void). Purchaser
hereby waives any right to terminate the P&S Agreement under Section 3.1 thereof
or otherwise. As of the date hereof, Purchaser's and ▇▇▇▇▇▇'▇ obligation to
close the transactions contemplated by the P&S Agreement are unconditional, the
Deposit is non refundable, and neither Purchaser nor ▇▇▇▇▇▇ has or shall have
any termination rights under the P&S Agreement whatsoever (provided that the
foregoing shall not invalidate Purchaser's remedies for any default by Sellers,
as set forth in Section 8 of the P&S Agreement). Purchaser further waives any
and all objections and other matters set forth in the Title Notice sent to
Sellers (including, without limitation, all Title Defects) and acknowledges that
Sellers have not agreed to cure any such objections or other matters. All such
objections or other matters constitute Permitted Exceptions, and Purchaser (x)
waives any right to object thereto and (y) agrees to take title subject thereto
at Closing. Purchaser hereby waives any and all
-7-
rights it might have under Section 4.1 of the P&S Agreement and accepts the
quality and condition of title to the Premises.
Notwithstanding the foregoing, Sellers have agreed to provide the following
title curatives at Closing:
(i) The inclusion in the deeds to each of the Properties of
standard quit claim language utilizing the insured legal
descriptions required by Purchaser's Title Notice where such
legal descriptions vary from the vesting deed legal
descriptions;
(ii) Standard gap/hold harmless indemnities or owner's affidavits
of liens and parties in possession as required by the
Purchaser's Title Company (which shall not cover any Permitted
Exceptions);
(iii) Evidence of payment of $5,000 to the sealing contractor with
respect to the Richmond property (referenced in Exhibit F to
the P&S Agreement); and
(iv) Evidence of payment or an indemnity reasonably satisfactory to
the Title Company regarding the $25,000 owed to the contractor
with respect to the Columbia Property (referenced in Exhibit F
to the P&S Agreement).
Sellers will, additionally, use their good faith efforts (which shall not
include the expenditure of any funds or the making of any changes, alterations
or improvements to any Premises) to assist Purchaser to secure the following:
(a) An Estoppel Certificate from the ▇▇▇▇▇▇▇ Company with respect
to the Richmond Property in the form attached as Exhibit M;
(b) An Encroachment Agreement in the form provided with respect to
the Virginia Beach property in the form attached hereto as
Exhibit M;
(c) A Subordination, Nondisturbance and Attornment Agreement and
estoppel letter in the form provided by the Purchaser with
respect to the cellular dish lease affecting the ▇▇▇▇▇▇-▇▇▇▇
Property in the form attached hereto as Exhibit M; and
-8-
(d) Two estoppel letters in forms provided by the Purchaser
regarding the driveway easement and the Declaration of
Covenants, Conditions and Restrictions with respect to the
Raleigh Property in the form attached hereto as Exhibit M.
Purchaser's receipt of the foregoing items (a) through (d) shall not be a
condition to Closing. Sellers have not provided any assurances, representations
or warranties that any of the foregoing items will be secured. Provided that
Sellers use good faith efforts (as limited above) to assist Purchaser in
securing the aforesaid items, if such items are not secured, (x) Sellers shall
have no obligation or liability in connection therewith, and (y) Purchaser shall
not have any right to terminate this Agreement, fail to close hereunder or seek
any remedy or recourse against Sellers as a result thereof.
Nothing contained herein is intended to waive Sellers' obligation to
produce documents of conveyance or standard title curatives expressly provided
for in Section 5 of the P&S Agreement.
7. Except as expressly modified by provisions of this Amendment, all
of the terms, covenants and conditions of the P&S Agreement shall remain
unmodified and in full force and effect.
8. This Amendment may not be changed orally and shall be construed
according to the laws of the State of New York, and any legal action or
proceeding with respect to or in connection with this Amendment must be brought
in the Supreme Court of the State of New York within the First Judicial
Department, 1st District, New York City, or the Federal Courts for the Southern
District of New York.
9. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
-9-
IN WITNESS WHEREOF, the undersigned have duly executed this
Amendment as of the day and year first above written.
SB MOTEL RICHMOND CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL DURHAM-RESEARCH
TRIANGLE PARK CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL CARY CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL STATESVILLE CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL WILMINGTON CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL COLUMBIA CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL CHARLESTON CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL ALBANY CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL VIRGINIA BEACH CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL ▇▇▇▇▇▇-▇▇▇▇ CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL RALEIGH CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL CHARLOTTE I-85 CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ HOTELS PROPERTIES CORP.
By: /s/ B. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Name: B. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman and Chief
Executive Officer
▇▇▇▇▇▇ HOTELS CORPORATION
By: /s/ B. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Name: B. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman and Chief
Executive Officer
B. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ is executing this
Contract Amendment No. 2 in his in-
dividual capacity solely to acknowl-
edge and confirm his covenant set
forth in Section 15.3(b) of the P&S
Agreement.
/s/ B. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
B. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Escrow Agent is executing this Con-
tract Amendment No. 2 solely to ac-
knowledged its continued obligations
as Escrow Agent
LAWYERS TITLE INSURANCE CORPORATION
By: [Illegible]
---------------------------------
Name: [Illegible]
---------------------------
Title: Counsel
---------------------------
SB Motel Corp. is executing this
Contract Amendment No. 2 solely to
acknowledge and confirm its repre-
sentations and warranties made in
Section 3 hereof
SB MOTEL CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
EXHIBIT E
Purchase Price Allocation
SB Motel Albany Corp. $ 3,151,000
SB Motel ▇▇▇▇ Corp. $ 6,008,000
SB Motel Charleston Corp. $ 5,938,000
SB Motel Charlotte 1-85 Corp. $ 3,291,000
SB Motel Columbia Corp. $ 5,811,000
SB Motel ▇▇▇▇▇▇-▇▇▇▇ Corp. $ 8,929,000
SB Motel Durham Research Triangle Park Corp. $ 4,920,000
SB Motel Raleigh Corp. $ 3,835,000
SB Motel Richmond Corp. $ 6,510,000
SB Motel Statesville Corp. $ 3,741,000
SB Motel Virginia Beach Corp. $ 2,286,000
SB Motel Wilmington Corp. $ 5,980,000
-----------
Total $60,400,000
Exhibit J
November 27, 1996
HH Properties-I, Inc.
HH Properties-VB, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Chairman
Re: Agreement of Purchase and Sale, dated September 27, 1996, among ▇▇▇▇▇▇
Hotels Properties Corp. ("Purchaser"), SB Motel Albany Corp., SB Motel
Raleigh Corp., SB Motel Cary Corp., SB Motel Richmond Corp., SB Motel
Charleston Corp., SB Motel Statesville Corp., SB Motel Charlotte I-85
Corp., SB Motel Virginia Beach Corp., SB Motel Columbia Corp., SB Motel
▇▇▇▇▇▇-▇▇▇▇ Corp., SB Motel Wilmington Corp., SB Motel Durham-Research
Triangle Park Corp. (collectively, "Sellers"), and ▇▇▇▇▇▇ Hotels Corp.
("▇▇▇▇▇▇"), as amended by (i) that certain Contract Amendment No. 1, dated
October 31, 1996 and (ii) that certain Contract Amendment No. 2, dated
November 18, 1996 (as amended, the "P&S Agreement"); all capitalized
terms not herein defined shall have the meanings ascribed to such terms in
the P&S Agreement
Gentlemen:
Reference is hereby made to the following: (a) a certain Adversary
Proceeding that was commenced by Motels of America ("MOA") as Debtor and
Debtor-in-Possession, and Ben Franklin Properties, Inc. in its own right and as
Assignee of Ameritech Pension Trust ("Ben Franklin") against Salomon Brothers
Inc ("Salomon") and Salomon Brothers Realty Corp. ("SBRC") captioned Motels of
America, Inc. et al. ▇. ▇▇▇▇▇▇▇ Brothers Inc et al. No. A-91-167 in the United
States Bankruptcy Court for the District of Delaware (the "MOA Litigation"),
which proceeding was settled pursuant to a certain settlement agreement by and
among MOA, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and SBRC, dated as of March 27, 1992 (which was
approved by Order of such Bankruptcy Court by Order dated July 23, 1992 filed
with the Clerk thereof on July 27, 1992); (b) a certain action that was
commenced in
E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Hotels Properties Corp.
November 27, 1996
Page 2
the United States District Court for the Northern District of Illinois by
purchasers of certain of the first mortgage notes (collectively, "Xerox")
secured by mortgages on, among other things, the Properties and captioned Xerox
Financial Services Life Ins. Co. et al. ▇. ▇▇▇▇▇▇▇ Brothers Inc et al. No.
93-C-1767 (the "Xerox Litigation"), which action was settled pursuant to a
certain settlement agreement dated September 9, 1993 by and among Xerox and
Salomon; (c) a certain action filed in the United States District Court for the
Northern District of Illinois which is known as ▇▇▇▇▇▇ Trust Savings Bank, not
individually but solely as trustee for Ameritech Pension Trust ("APT"),
Ameritech Corporation and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (collectively, "Ameritech") ▇.
▇▇▇▇▇▇▇ Brothers Inc and Salomon Brothers Realty Corp. (92 Civ. 5883 (MEA)) (the
"Ameritech Litigation"); (d) an investigation conducted by the United States
Department of Labor (the "DOL") of certain transactions between Salomon, SBRC
and APT which are also a subject of the Ameritech Litigation (the "DOL
Investigation"); and (e) the potential assessment against Salomon, SBRC and APT
of excise taxes by the United States Internal Revenue Service (the "IRS") for
alleged prohibited transactions arising out of certain transactions between
Salomon, SBRC and APT which are also a subject of the Ameritech Litigation (the
"IRS Investigation"; the MOA Litigation, the Xerox Litigation, the Ameritech
Litigation, the DOL Investigation and the IRS Investigation being referred to
herein collectively as, the "Litigation"). Salomon and SBRC disputed both the
factual and the legal basis for the claims asserted in the MOA Litigation and
the Xerox Litigation, and dispute both the factual and the legal basis for the
claims asserted or which would be asserted in the Ameritech Litigation, the DOL
Investigation and the IRS Investigation.
Subject to the terms and conditions of this letter, Salomon shall,
from and after the Closing, indemnify and protect HH Properties-I, Inc. and HH
Properties-VB, Inc. (collectively, "Indemnitees" and each an "Indemnitee") from
and against any and all actions, causes of action, suits, claims, judgments,
demands or liens whatsoever, in law or at equity (collectively, "Claims") which
(i) are made by MOA or Ben Franklin against Indemnitees, or either of them, and
result directly by reason of or on account of the MOA Litigation, (ii) are made
by Xerox against Indemnitees, or either of them, and result directly by reason
of or on account of the Xerox Litigation, (iii) are made by Ameritech against
Indemnitees, or either of them, and result directly by reason of or on account
of the Ameritech Litigation, (iv) are made by the DOL against Indemnitees, or
either of them, and result directly by reason of or on account of the DOL
Investigation, and (v) are made by the IRS against Indemnitees, or either of
them, and result directly by reason of or on account of the IRS Investigation
(each, an
E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Hotels Properties Corp.
November 27, 1996
Page 3
"Indemnified Claim"), provided that, notwithstanding the foregoing, in no event
shall Salomon have any liability or responsibility for, and the Indemnified
Claims shall not include, Indemnitees' incidental or consequential damages or
any Claims by any party other than (i) MOA or Ben Franklin (by reason of or on
account of the MOA Litigation), (ii) Xerox (by reason of or on account of the
Xerox Litigation), (iii) Ameritech (by reason of or on account of the Ameritech
Litigation), (iv) the DOL (by reason of or on account of the DOL Investigation),
and (v) the IRS (by reason of or on account of the IRS Investigation).
The obligations and liabilities of Salomon which are set forth above
shall be subject to the following terms, conditions and limitations:
(a) Indemnitees, or either of them, within ten (10) days of
obtaining any knowledge of any Claim which has given rise to, or which
might reasonably be expected to give rise to, an Indemnified Claim, shall
give written notice ("Notice of Claim") of such Claim to Salomon, which
Notice of Claim shall include in reasonable detail all information
available to Indemnitees, or either of them, with respect to such
Indemnified Claim (including, without limitation, the nature and basis of
such Indemnified Claim, and the amount thereof to the extent known).
Indemnitees, or either of them, shall provide with each Notice of Claim
copies of any summons, complaint or other pleading which may have been
served on it and any written claim, demand, invoice, billing or other
document evidencing or asserting the same. Thereafter, Indemnitees, or
either of them, shall, as promptly as practicable but in any event no
later than ten (10) days after receiving from time to time any
documentation, notice or information relating to any Indemnified Claim,
provide copies thereof to Salomon;
(b) Salomon shall have the right to assume the defense of any
Indemnified Claim at its own expense and by its own counsel. If Salomon
shall assume the defense of an Indemnified Claim, Salomon shall not be
responsible for any legal or other defense costs subsequently incurred by
Indemnitees, or either of them, in connection with the defense thereof. If
Salomon does not exercise its right to assume the defense of any
Indemnified Claim, then Indemnitees, or either of them, may assume such
defense but the costs, expenses and reasonable attorneys' fees incurred
shall be paid by Salomon hereunder;
E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Hotels Properties Corp.
November 27, 1996
Page 4
(c) Anything contained herein to the contrary notwithstanding,
Indemnitees, or either of them, shall not admit any liability with respect
to, or defend, settle, compromise or discharge, any Indemnified Claim
without the express written consent of Salomon, which consent shall not be
unreasonably withheld. Indemnitees, or either of them, shall in all
respects cooperate with Salomon and act in a reasonable and good faith
manner to minimize Salomon's liability in connection with any Indemnified
Claim; and
(d) Indemnitees' right to indemnification hereunder shall be the
sole remedy to which Indemnitees and ▇▇▇▇▇▇ shall be entitled with respect
to the Litigation and/or any Indemnified Claims.
This indemnity shall survive (i) with respect to the indemnities
arising in connection with the MOA Litigation, the Xerox Litigation, the DOL
Investigation and the IRS Investigation, until the fifth anniversary of the
Closing Date or until a sale, assignment or other transfer of the Premises (or
any part thereof) by Indemnitees, if sooner (provided, however, that neither an
assignment pursuant to Section 16.2 of the P&S Agreement, nor a grant to a
lender of a deed of trust covering the Premises or any part thereof shall
constitute such a sale, assignment or other transfer, and (ii) with respect to
the indemnity arising in connection with the Ameritech Litigation, until the
fifth anniversary of a final, non-appealable judgment concluding the Ameritech
Litigation. No claim may be asserted by Indemnitees under the foregoing
indemnity after the expiration of such survival period, and all claims for
breach of such indemnity asserted during such survival period may continue to be
asserted after such survival period only if during the survival period the
claiming party provided the other party specific and detailed written notice
thereof and commenced and diligently prosecuted a law suit against the other in
connection therewith.
Neither this indemnity nor any of the respective obligations,
covenants or agreements hereunder may be assigned in whole or in part, directly
or indirectly, by operation of law or otherwise excepting, however, an
assignment pursuant to Section 16.2 of the P&S Agreement.
Any notice to be given hereunder shall be given in the manner and
subject to the provisions set forth in Section 10 of the P&S Agreement. Any
notice to be given to Indemnitees, or either of them, hereunder shall be to the
address set forth in Section 10 of the P&S Agreement, and any notice to be given
to Salomon hereunder shall sent to the following address:
E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Hotels Properties Corp.
November 27, 1996
Page 5
Salomon Brothers Inc, Seven World Trade Center, 33rd Floor, New York, New
York 10048, Attn: ▇▇▇▇ ▇. ▇▇▇▇.
The provisions hereof may not be changed orally and shall be
construed according to the laws of the State of New York, and any legal action
or proceeding with respect to or in connection with the provisions hereof must
be brought in the Supreme Court of the State of New York within the First
Judicial Department, 1st District, New York City, or the Federal Courts for the
Southern District of New York.
Very truly yours,
SALOMON BROTHERS INC
By: __________________________________
Name:
Title:
ACKNOWLEDGED, APPROVED
AND ACCEPTED:
HH PROPERTIES-I, INC.
By: __________________________________
Name:
Title:
HH PROPERTIES-VB, INC.
By: __________________________________
Name:
Title:
Location: Statesville, North Carolina
Name of Facility; Fairfield Inn
(formerly, a Cricket Inn)
Exhibit K
GROUND LESSOR ESTOPPEL
THIS GROUND LESSOR ESTOPPEL (this "Agreement"), made as of
October __, 1996, is entered into by and among INTERSTATE DEVELOPMENT COMPANY, a
North Carolina corporation ("Landlord"), having an address at ▇.▇. ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, NOMURA ASSET CAPITAL CORPORATION, a Delaware
corporation ("Lender"), having an address at 2 World Financial ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, and HH Properties-I, Inc. a New York
corporation ("New Tenant"), having an address c/▇ ▇▇▇▇▇▇ Hotels Corporation, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ International Airport, Rochester, New York
14624, Attn: E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Chairman.
RECITALS
A. Pursuant to that certain Ground Lease dated February 20, 1984
(the "Lease"), a Memorandum of which was recorded on February 24, 1984 in Book
696, Page 475 of the Iredell County, North Carolina Registry (the "Iredell
County Registry"), Landlord leased certain real property described on Exhibit A
attached hereto (together with all rights of way, easements and appurtenances
relating thereto and described in the Lease, including, without limitation,
easements for vehicular and pedestrian ingress and egress and parking on, over
and across adjoining or abutting property, the "Demised Premises") to Turnpike
Properties, Inc., a North Carolina corporation ("Turnpike Properties"), as
tenant.
B. Pursuant to a certain Amendment to Ground Lease by and between
Landlord and Turnpike Properties dated March 30, 1984 and recorded on April 19,
1984 in Book 698, Page 589 of the Iredell County Registry, the Lease was further
modified and amended.
C. Pursuant to that certain Assignment of Lease dated July 28, 1989
and recorded on August 4, 1989 in Book 789, Page 329 of the Iredell County
Registry, Turnpike Properties, as tenant, assigned all of its right, title and
interest in, to and under the Lease to Motels of America, Inc., a Delaware
corporation ("Motels of America").
D. Pursuant to a certain Assignment of Lease dated December 1, 1993
and recorded on December 1, 1993 in Book 903, Page 580 of the Iredell County
Registry, Motels of America, as tenant, assigned all of its right, title and
interest in, to and under the Lease to SB Motel Statesville Corp., a Delaware
corporation ("Tenant").
E. Pursuant to that certain Assignment of Lease dated October __,
1996 and intended to be forthwith recorded in the Iredell County Register,
Tenant, as tenant, has assigned all of its right, title and interest in, to and
under the Lease to New Tenant.
F. Pursuant to a certain Loan Agreement by and between Lender and
New Tenant (as the same may be amended, modified, supplemented or assigned from
time to time, the "Loan Agreement"), Lender intends to extends a loan (the
"Loan") to New Tenant to be secured by, among other things, a first lien
leasehold mortgage or deed of trust, as the case may be (as the same may be
amended, modified, supplemented or assigned from time to time, the "Mortgage"),
encumbering New Tenants leasehold interest in the Demised Premises and its
interest in the Lease.
NOW, THEREFORE, to induce New Tenant to purchase by assignment all
of Tenant's right, title and interest in, to and under the Lease and to induce
Lender to make the Loan to New Tenant and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:
1. Landlord's Representations and Warranties. Landlord represents
and warrants to Lender and New Tenant the following:
1.1 Lease. A true, correct and complete copy of the Lease is
attached hereto as Exhibit B and such Lease has not been assigned,
modified, amended or supplemented except as expressly set forth in Exhibit
B. The Lease is in full force and effect and constitutes the entire
agreement between Landlord and Tenant with respect to the Demised
Premises. There do not exist any other agreements or understandings
(including, but not limited to, subordination, non-disturbance and
attornment agreements) concerning the Demised Premises and/or the Lease,
whether oral or written, between Landlord and Tenant (or any of their
respective predecessors or successors).
1.2 Tenant. Tenant is the tenant under the Lease and is in
peaceful, quiet and undisturbed possession of the entire Demised Premises.
Upon execution of the Assignment of Lease identified in Paragraph F above,
New Tenant shall be the tenant under the Lease.
-2-
1.3 Enforceability. The Lease constitutes the legal, valid and
binding obligation of Landlord, enforceable against Landlord in accordance
with its terms.
1.4 Rent. The rent payable under the Lease currently is
$________ per annum, which rent is paid in equal monthly installments in
advance on the first day of each month, and such rent has been paid
through the month of _______, 1996. No rent, other than for the current
month, has been paid in advance. The Lease in a triple net lease and
Tenant receives all real estate tax bills relating to the Demised Premises
directly from the applicable taxing authorities.
1.5 Term. The current term of the Lease commenced on February
20, 1985 and expires on February 20, 2005. Upon execution of the
Assignment of Lease identified in Paragraph F above, however, and pursuant
to Section 2.1 below, the current term of the Lease shall be extended so
as to expire on February 20, 2035.
1.6 Escrow. The amount of any escrows and deposits presently
held by Landlord under the Lease is $_______. (If none, so state.)
1.7 Tenant's Defaults. Tenant is not in default under the
Lease and Landlord has no knowledge of the existence of any event which,
with the giving of notice, the passage of time, or both, would constitute
a default (or event of default) by Tenant under the Lease.
1.8 Landlord's Defaults. Landlord is not in default under the
Lease and Landlord has no knowledge of the existence of any event which,
with the giving of notice, the passage of time, or both, would constitute
a default (or event of default) by Landlord under the Lease.
1.9 No Mortgages. Landlord has not assigned, conveyed,
transferred, sold, encumbered or mortgaged its interest in the Lease or
the Demised Premises (or any part of it) and there currently are no
mortgages, deeds of trust or other security interests encumbering
Landlord's fee interest in the Demised Premises (or any part of it). No
third party (including, without limitation, Roses Department Stores, Inc.)
has any option, preferential right or right of first refusal to purchase
all or any part of the Demised Premises or Landlord's underlying fee
interest. No consent or approval of any third party (including, without
limitation, any lender) is required in order
-3-
for Landlord to deliver this Agreement and to perform fully its
obligations hereunder.
1.10 No Offsets. There are no offsets, counterclaims,
defenses, deductions or credits whatsoever with respect to the Lease, or
any amounts owning under any other agreement.
1.11 Eminent Domain. Landlord has not received written notice
of any pending eminent domain proceedings or other governmental actions or
any judicial actions of any kind against Tenant's or Landlord's interest
in the Demised Premises.
1.12 Violations. Landlord has not received written notice that
it is in violation of any governmental law or regulation applicable to
Tenant's or Landlord's interest in the Demised Premises and its operation
thereon, including, without limitation, any zoning, subdivision or
environmental laws or the Americans with Disabilities Act, and has no
reason to believe that there are ground for any claim of any such
violation.
1.13 Acceptance of the Premises. The Demised Premises have
been fully accepted by Tenant and neither Landlord nor Tenant has any
outstanding right or option to terminate or cancel the Lease prior to its
stated expiration date.
1.14 Title Improvements. Title to the buildings, improvements,
and fixtures at the Demised Premises is vested in Tenant.
2. Landlord's Covenants. Landlord hereby consents and agrees to each
and every one of the following covenants and agreements for the benefit of
Lender and, as applicable, New Tenant:
2.1 Recognition of New Tenants as Tenant. Landlord hereby
approves of and recognizes New Tenant as the tenant under the Lease.
Landlord hereby acknowledges and agrees that, notwithstanding anything set
forth in the Lease (including Section 13 thereof) to the contrary, all
existing extension options under the Lease have been effectively exercised
by New Tenant, and are hereby accepted by Landlord, and that as such, the
initial term of the Lease shall henceforth expire on February 20, 2035.
2.2 Recognition of Lender as Leasehold Mortgagee. Landlord
hereby recognizes Lender as a first lien
-4-
leasehold mortgagee under the Lease and consents to Mortgage. All of the
leasehold mortgagee protection provisions contained in the Lease, and all
other provisions inuring to the benefit of leasehold mortgagees (or their
successors and assigns) are hereby incorporated into this Agreement by
reference and restated and confirmed by Landlord for the benefit of
Lender, its successors and assigns, subject to any modification of such
protection provisions as provided herein. Landlord acknowledges and
confirms that New Tenant shall have the absolute right to grant a
leasehold mortgage on the Demised Premises in favor of Lender or any other
mortgagee or third party in connection with any refinancing of the
Mortgage on such terms and conditions as New Tenant may agree to in its
sole discretion.
2.3 Notice to Lender of Proposed Termination Date.
Notwithstanding anything in the Lease to the contrary, if any default or
event of default shall occur which entitles Landlord to terminate the
Lease, Landlord shall have no right to terminate the Lease unless,
following the expiration of the period of time given New Tenant to cure
such default (or if New Tenant has no right to cure, following such
default), Landlord shall deliver a notice (the "Proposed Termination
Notice") to Lender of Landlord's intent to terminate the Lease (i) at
least forty-five (45) days in advance of the proposed effective date of
such termination (the "Proposed Termination Date"), if such default is
capable of being cured by the payment of money and (ii) at least ninety
(90) days in advance of the Proposed Termination Date if such default is
not capable of being cured by the payment of money. The provisions of
Section 2.4 below shall apply if, during such forty-five (45) or ninety
(90) day period, as applicable, Lender shall: (i) notify Landlord in
writing of Lender's desire to nullify the Proposed Termination Notice;
(ii) pay or cause to be paid to Landlord all sums then due and in arrears
as specified in the Proposed Termination Notice and which may become due
during such forty-five (45) or ninety (90) day periods, as applicable; and
(iii) comply or in good faith, with reasonable diligence and continuity,
commence to comply with all non-monetary requirements of the Lease then in
default and reasonably susceptible of being complied with by Lender.
2.4 Procedure on New Tenant Default. (i) If Landlord shall
elect to terminate the Lease by reason of a default or event of default of
New Tenant, and Lender shall have complied with the provisions of Section
2.3
-5-
above, the Proposed Termination Date stated in the Proposed Termination
Notice shall be (A) nullified if the default or event of default is
completely cured or (B) extended for an additional period of six (6)
months provided that, in the latter instance, during such additional six
(6) month period, Lender shall:
(A) pay or cause to be paid all monetary obligations of
New Tenant under the Lease as the same become due and continue in
good faith to perform all of New Tenant's other obligations under
the Lease except (1) past non-monetary obligations then in default
and not reasonably susceptible of being cured by Lender and (2)
obligations of New Tenant to satisfy and discharge any lien or
encumbrance junior in priority to the Mortgage, if any; and
(B) if not enjoined or stayed, commence steps to acquire
all of New Tenant's interest in the Lease by foreclosure, assignment
in lieu of foreclosure, or other appropriate means and prosecute the
same to completion with due diligence. If Lender is enjoined or
stayed during such six (6) month period, such period shall be
extended by the number of days that any injunction or stay is in
effect.
(ii) If at the end of such additional six (6) month period (as it
may be extended under Section 2.4(i)(B), Lender is complying with the
terms of Section 2.4, the Lease shall not terminate, and the time for
completion by Lender of its proceedings to acquire or sell all of New
Tenant's interest in the Lease shall continue so long as Lender is
enjoined or stayed and thereafter for so long as Lender proceeds to
complete steps to acquire or sell New Tenant's interest in the Lease by
foreclosure, assignment in lieu of foreclosure, or by other appropriate
means with reasonable diligence and continuity. Notwithstanding the terms
of Section 2.3 or 2.4, nothing contained in the Lease or this Agreement
shall require Lender, its successors, assigns or designees, to cure any
default or event of default of New Tenant under the Lease, it being
understood that the right to cure a New Tenant default or event of default
shall be in Lender's sole discretion.
2.5 Continuation of Lease. If Lender is complying with Section
2.4, upon the acquisition of the leasehold estate by Lender or its
designee or any other purchaser at a foreclosure sale or otherwise, the
Lease shall continue in full force and effect as if New Tenant had not
defaulted under the Lease.
-6-
2.6 No Amendments to Lease. From and after the date hereof,
Landlord will not amend or modify the Lease without the prior written
consent of Lender. In the event Landlord fails to secure such prior
written approval to any such amendment or modification, such amendments or
modifications to the Lease shall be null and void as if never made. In no
event shall the Lease be cancelled, terminated or surrendered without the
prior written consent of Lender.
2.7 Delivery of Notices. Landlord shall simultaneously deliver
to Lender copies of all notices, statements, information and
communications delivered or required to be delivered to New Tenant
pursuant to the Lease, including, without limitation, any notice of any
default by New Tenant. Landlord shall advise Lender in writing if New
Tenant fails to make any rental payment on the date such payment is due
under the Lease.
2.8 Further Assurances. Landlord shall from time to time (i)
execute such affidavits and certificates as Lender shall reasonably
require to further evidence the agreements herein contained and (ii)
cooperate with Lender's representatives in any inspection of all or any
portion of the Demised Premises to the extent Lender is permitted to enter
and inspect such Demised Premises in accordance with the Mortgage and/or
the Loan Agreement.
2.9 Lender Not Obligated Under Lease; Permitted Transfers. The
granting of the Mortgage shall not be deemed to constitute an assignment
or transfer of the Lease or the Demised Premises to Lender, nor shall
Lender, as such, be deemed to be an assignee or transferee of the Lease or
the leasehold estate thereby created so as to require Lender, as such, to
assume the performance of any of the terms, covenants or conditions on the
part of New Tenant to perform thereunder. Notwithstanding the foregoing,
the purchase at any sale of the Lease and the leasehold estate thereby
created in any proceedings for the foreclosure of the Mortgage (including,
without limitation, power of sale) or the assignee or transferee of the
Lease and the leasehold estate thereby created under any instrument of
assignment or transfer in lieu of the foreclosure (whether Lender or any
third party) shall be deemed to be a permitted assignee or transferee
under the Lease without the need to obtain Landlord's consent, and shall
be deemed to have agreed to perform all of the terms, covenants and
conditions on the part of New Tenant to be performed under the Lease from
and after the date of
-7-
such purchase and/or assignment (but not for any obligations or
liabilities accruing prior to such date), but only for so long as such
purchaser or assignee is the owner of the Lease and the leasehold estate
thereby created, it being understood and agreed that upon a sale or
transfer of the Lease by such party (which sale or transfer shall not
require the consent of Landlord) and written assumption of its obligations
under the Lease by any new purchaser or assigner, the transferring party
shall be relieved of all future liability under the Lease.
2.10 Lender's Reliance on Representations. Landlord has
executed this Agreement for the purpose of inducing New Tenant to purchase
by assignment all of Tenant's right, title and interest in, to and under
the Lease and inducing Lender to make the Loan and with full knowledge
that New Tenant and Lender, respectively, shall rely upon the
representations, warranties, covenants and agreements herein contained
when acquiring such assignment from Tenant and making the Loan to New
Tenant and that, but for this instrument and the representations,
warranties, covenants and agreements herein contained, New Tenant and
Lenders, respectively, would not take such actions.
2.11 Landlord's Mortgagees; Fee Mortgages Subordinate.
Notwithstanding anything in the Lease to the contrary, Landlord
acknowledges and agrees that if it sells, transfers, assigns, mortgages,
hypothecates, pledges or otherwise encumbers its fee interest in the
Demised Premises, or any part of it, or the Lease to any mortgagee, lender
or any other third party, any such sale, transfer, assignment, mortgage,
deed of trust, hypothecation, pledge or encumbrance shall be expressly
subject and subordinate in all respects to the Mortgage, Lender's interest
in the Demised Premises and the Lease. Landlord hereby further
acknowledges and agrees that the Lease and the Mortgage shall be senior in
all respects to any such future mortgage, deed of trust or other security
interest encumbering all or any portion of Landlord's fee interest in the
Demised Premises and that any provision of the Lease requiring that the
Lease or the leasehold interest created thereby (or any leasehold mortgage
or deed of trust thereon) be junior, subordinate or inferior in any
respect to any mortgage or other lien on such fee interest is hereby
deleted in it entirety and declared to be null and void.
2.12 Casualty and Insurance Proceeds. Notwithstanding anything
in the Lease to the contrary and so long as the indebtedness, or any part
of it, secured by the
-8-
Mortgage remains outstanding and unpaid and the Mortgage remains of
record: (i) the Lease shall not terminate or be cancelled upon the damage
or destruction by fire or other casualty of all, substantially all, or any
part of the Demised Premises; (ii) the public liability and property
damage insurance policies required to be maintained pursuant to the Lease
shall name Lender as an additional named insured and loss payee/mortgagee,
respectively; (iii) the form of such policies and amounts thereof shall at
all times be in accordance with the terms of the Mortgage and Lender shall
have the sole and absolute right to adjust and settle any insurance claim;
and (iv) Landlord hereby subordinates its interest in and rights to
receive any insurance proceeds to Lender and agrees that all proceeds of
such insurance polices shall be payable to Lender as loss payee to be
applied by Lender in accordance with the terms of the Mortgage and the
Loan Agreement.
2.13 Condemnation and Condemnation Proceeds. Notwithstanding
anything in the Lease to the contrary and so long as the indebtedness, or
any part of it, secured by the Mortgage remains outstanding and unpaid and
the Mortgage remains of record: (i) the Lease shall not terminate or be
cancelled upon a taking or condemnation pursuant to an eminent domain
proceeding of all, substantially all, or any part of the Demised Premises
without Lender's consent or unless required by law; (ii) Lender shall be
entitled to make a claim for the value of the leasehold improvements and
leasehold estate and shall have the sole and absolute right to settle any
claim with respect to the Demised Premises, provided that Landlord shall
be entitled to make an independent claim for the value of the land as if
it were unimproved and as encumbered by the Lease; and (iii) that Lender
shall have the right to apply its portion of the condemnation proceeds in
accordance with the terms of the Mortgage and the Loan Agreement.
2.14 Intentionally Omitted.
2.15 Agreement to Modify. In the event Lender succeeds to the
rights of the New Tenant under the Lease, Landlord agrees that it shall
enter into such amendments or modifications of the Lease as Lender may
reasonably request from time to time to reflect the intent hereof so long
as such modifications do not materially and adversely affect Landlord's
rights thereunder or affect the economic terms thereof.
2.16 New Direct Lease In the event the Lease is terminated or
cancelled for any reason or rejected by
-9-
New Tenant (in the event of a bankruptcy, insolvency or similar proceeding
involving New Tenant) Landlord hereby acknowledges and agrees that it
shall, upon Lender's written election, promptly enter into a new, direct
lease with Lender (or its nominee) with respect to the Demised Premises on
the same terms and conditions as the Lease, it being the intention of the
parties to preserve the Lease and leasehold estate for the benefit of
Lender without interruption. In the event the Lease is rejected or deemed
rejected by New Tenant in any such bankruptcy, insolvency or similar
proceeding, such rejection shall not as between Lender and Landlord effect
or modify any of the rights and obligations set forth in this Agreement
and the terms and conditions of this Agreement shall expressly survive any
such rejection. Upon Lender's request, New Tenant agrees to cause Landlord
to promptly deliver to Lender a separate writing from Landlord to New
Tenant containing the foregoing two sentences of this Section 2.16.
3. Permitted Uses. Notwithstanding anything contained in the Lease
or otherwise to the contrary, Landlord acknowledges and agrees that in the event
Lender succeeds to the interests of New Tenant under the Lease, Lender, and any
successor or assignee thereof, shall be permitted to use and operate the Demised
Premises for any lawful use. In the event Lender, or any successor or assignee
thereof, elects to change or modify the use of the Demised Premises, Landlord
agrees to cooperate with Lender, and any successor or assignee thereof, in
obtaining any and all permits, approvals and licenses that may be necessary in
connection with or as a result of any such conversion of the Demised Premises.
4. No Duty to Continue to Operate. Notwithstanding anything
contained in the Lease or otherwise to the contrary, Lender shall have no duty
to continue to operate the Demised Premises during any period(s) in which Lender
is in possession of the Demised Premises or otherwise exercising any other
rights or remedies against New Tenant under the Mortgage or applicable law.
5. Deleted Provisions. Landlord acknowledges and agrees that the
following sections of the Lease are hereby deleted in their entirety and are of
no further force and effect: 4.1.(3) (which appears on page 9 of the Lease);
7.1(c); 7.1(d); 7.1(e); 7.1(f); and 7.2. The phrase "to the extent of up to
seventy-five percent (75%) of the appraised value of said Demised Premises,
improvements, fixtures, furnishings and equipment thereon" appearing in the
fifth through eighth lines of Section 7.1(b) of the Lease is hereby deleted.
Nothing contained in the Lease, including, without limitation Section 14.5
-10-
thereof, shall limit or modify in any way (i) Lender's rights and remedies
against New Tenant under the Loan Agreement, the Mortgage or any other document
delivered in connection therewith or (ii) New Tenant's obligations and
liabilities to Lender thereunder with respect to the Loan.
6. Intentionally Omitted.
7. Notices. All notices, demands, consents, or requests which are
either required or desired to be given or furnished hereunder to Landlord,
Lender or New Tenant shall be sent to the appropriate party at the address set
forth in the preamble to this Agreement and shall be given in writing and shall
be effective for all purposes if hand delivered or sent by (a) certified or
registered United States mail, postage prepaid, return receipt requested, or (b)
expedited prepaid delivery service, either commercial or United States Postal
Service, with proof of attempted delivery. A copy of all notices, demands,
consents, or requests delivered to Lender also shall be delivered to ▇▇▇▇▇▇ ▇.
▇▇▇▇, Esquire, Dechert Price & ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. A notice shall be deemed to have been
given: in the case of hand delivery, at the time of delivery; in the case of
registered or certified mail, when delivered (as evidenced by the receipt) or
the first attempted delivery on a business day; or in the case of expedited
prepaid delivery, upon the first attempted delivery on a business day. A party
receiving a notice which does not comply with the technical requirements for
notice under this Section may elect to waive any deficiencies and treat the
notice as having been properly given. By notice complying with this Section, any
party may from time to time change the address to be subsequently applicable to
it or the identity of its individual officer or its counsel.
8. No Joint Venture. The relationship of Lender to New Tenant is one
of a creditor to a debtor, and Lender is not a joint venturer or partner of New
Tenant.
9. Governing Law. This Agreement and the rights and obligations of
the parties hereunder shall in all respects be governed by, and construed and
enforced in accordance with, the laws of the State of North Carolina (without
giving effect to such state's principles of conflicts of law).
10. Successors. This Agreement shall be binding upon and shall inure
to the benefit of Landlord, Lender and New Tenant and each of their respective
successors and assigns.
-11-
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which, when
taken together, shall constitute one and the same original.
12. Rights Cumulative; Original Agreement. The rights of Lender
hereunder are in addition to the rights of Lender granted in the Lease and shall
not be in derogation thereof. To the degree terms in this Agreement conflict
with the terms of the Lease, the terms of the Agreement shall control.
13. Recording of Agreement. At Lender's option, this Agreement shall
be recorded in the public land records of the jurisdiction in which the Demised
Premises is located.
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IN WITNESS WHEREOF, the parties hereto have caused this Ground
Lessor's Estoppel to be duly executed and delivered as of the day and year first
above written.
LANDLORD:
INTERSTATE DEVELOPMENT COMPANY, a
North Carolina corporation
By:_____________________________________
Name:
Title:
Attest:_________________________________
Name:
Title:
[CORPORATE SEAL]
LENDER:
NOMURA ASSET CAPITAL CAPITAL
CORPORATION, a Delaware corporation
By:_____________________________________
Name:
Title:
Attest:_________________________________
Name:
Title:
[CORPORATE SEAL]
-13-
NEW TENANT:
HH PROPERTIES-I, INC. a
New York Corporation
By:____________________________
Name:
Title:
Attest:________________________
Name:
Title:
[CORPORATE SEAL]
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
I,____________________________________________ , a Notary Public within
and for said County and State, do hereby certify that ________________________
personally appeared before me this day and acknowledged that he/she is Secretary
of Interstate Development Company, and that by authority duly given and as the
act of the corporation, the foregoing instrument was signed in its name by its
________________, sealed with its corporate seal, and attested by
himself/herself as its Secretary.
WITNESS my hand and official seal this_____ day of October, 1996.
____________________
Notary Public
My Commission Expires
___________________
[NOTARY SEAL]
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
I, __________________________________________ , a Notary Public within and
for said County and State, do hereby certify that _______________________
personally appeared before me this day and acknowledged that he/she is Secretary
of Nomura Asset Capital Corporation, and that by authority duly given and as the
act of the corporation, the foregoing instrument was signed in its name by its
________________, sealed with its corporate seal, and attested by
himself/herself as its Secretary.
WITNESS my hand and official seal this ____ day of October, 1996.
____________________
Notary Public
My Commission Expires
___________________
[NOTARY SEAL]
-16-
STATE OF NEW YORK
COUNTY OF
I, ____________________________________________ , a Notary Public within
and for said County and State, do hereby certify that _______________________
personally appeared before me this day and acknowledged that he/she is Secretary
of HH Properties-I, Inc. and that by authority duly given and as the act of the
corporation, the foregoing instrument was signed in its name by its
_______________, sealed with its corporate seal, and attested by himself/herself
as its Secretary.
WITNESS my hand and official seal this ________ day of October, 1996.
____________________
Notary Public
My Commission Expires
___________________
[NOTARY SEAL]
-17-
EXHIBIT B
GROUND LEASE
-18-
EXHIBIT L
NORTH CAROLINA DEED OF EASEMENT
IREDELL COUNTY
THIS DEED OF EASEMENT, made and entered into this _____ day of November,
1996, by and between INTERSTATE DEVELOPMENT COMPANY, of the City of Statesville,
County of Iredell, State of North Carolina, a North Carolina corporation (the
"Grantor") and SB MOTEL STATESVILLE CORP., a Delaware corporation (the
"Grantee"),
W I T N E S S E T H:
Grantor, for an in consideration of the sum of $10,00 and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, does hereby give, grant, bargain, sell and convey to Grantee, its
successors and assigns, a non-exclusive easement of ingress and egress for
vehicular and pedestrian traffic and right of parking for Grantee, its
customers, employees, invitees, guests and licensees over existing paved drive
areas and walkways on Grantor's property described in Exhibit A attached hereto
and incorporated herein by reference (the "Easement Property"), together with
easements for installation, maintenance and operation of utilities, including
sewer, water, gas, electricity, telephone and other utility lines over the
Easement Property; and together with all Grantor's easements in adjoining lands,
highways, roads, streets, lanes, whether public or private, reasonably required
for the installation, maintenance, operation and service of said utilities and
utility lines and for driveways and approaches to and from abutting highways,
all for the use and benefit of the premises demised to the Grantee pursuant to
the
terms of that certain Ground Lease dated February 20, 1984, a Memorandum of
which is recorded in Book 696, Page 475, Iredell County Registry, and which
Lease has been amended by that certain Amendment of Lease recorded in Book 698,
Page 589, Iredell County Registry (the "Ground Lease"), together with a non-
exclusive easement for vehicular and pedestrian ingress and egress across and
over the roadway described in Exhibit B attached hereto and incorporated herein
by reference.
TO HAVE AND TO HOLD the above-described right and easement unto Grantee,
its successors and assigns for the duration of the term of the Ground Lease, as
it may be extended and/or amended from time to time.
First Union National Bank of North Carolina ("Lender") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
as trustee (the "Trustee"), join in the execution of this Easement Agreement for
the sole purpose of evidencing their consent as beneficiary and trustee of the
Deed of Trust encumbering all or part of the Easement Property and recorded in
Book _____, Page _____, Iredell County Registry (the "Deed of Trust"), and
accordingly Lender and Trustee hereby subordinate the lien of the Deed of Trust
to the rights and easements hereby established. Except as specified herein, the
Deed of Trust shall remain unmodified and in full force and effect.
2
IN TESTIMONY WHEREOF, Grantor has caused this Deed of Easement to be signed
by its duly authorized officers under seal as of the day herein first above
written.
INTERSTATE DEVELOPMENT COMPANY,
a North Carolina Corporation
By: ________________________________
______________________ President
ATTEST:
________________________________
______________________ Secretary
(CORPORATE SEAL)
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, a national
banking association
By: ________________________________
______________________ President
ATTEST:
________________________________
______________________ Secretary
(CORPORATE SEAL)
___________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Trustee
3
EXHIBIT M
ESTOPPEL CERTIFICATE
THIS CERTIFICATE is given this _____ day of November, 1996 by ▇▇▇▇▇▇▇
COMPANY, a _______________________ corporation having an office at ▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇▇") to HH PROPERTIES-I, INC., a
New York corporation, its successors and assigns (HHP-I), NOMURA ASSET CAPITAL
CORPORATION, a _______________ corporation, its successors and assigns
("Nomura") and LAWYERS TITLE INSURANCE CORPORATION, a ________________
corporation, its successors and assigns ("Lawyers Title").
WHEREAS, SB Motel Richmond Corp. ("SB") is the owner of certain premises
located in the County of Henrico, Commonwealth of Virginia and commonly referred
to as the Fairfield Inn, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (the "SB Premises"); and
WHEREAS, pursuant to a certain Shared Access Easement Agreement by and
between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and M. ▇▇▇ ▇▇▇▇▇▇▇ and Commercial Title Agency, a
South Carolina corporation, dated March 7, 1986 and recorded in Deed Book 2004,
at page 1894 (the "Easement"), the SB Premises and the ▇▇▇▇▇▇▇ Premises are each
encumbered by and enjoy the benefit of a non-exclusive easement for vehicular
and pedestrian passage to and from each of said Premises in accordance with the
terms and conditions thereof; and
WHEREAS, pursuant to the terms and conditions of the Easement each of the
parties thereto, and their respective successors and assigns, are obligated to
perform certain obligations and to make certain payments all as more fully set
forth therein; and
WHEREAS, SB proposes to convey all of its right, title and interest in and
to the SB Premises to HHP-I and HHP-I intends to finance its acquisition of such
premises by obtaining mortgage loan financing from Nomura; and
WHEREAS, Lawyers Title intends to issue its policies of title insurance to
insure HHP-I's fee title in and to the SB Premises and to insure the Nomura
mortgage as a good and valid first mortgage lien on such Premises; and
WHEREAS, in connection with its acquisition of the SB Premises, the
financing by Nomura thereof and the issuance by Lawyers Title of its fee and
mortgagee policies of title insurance, HHP-I, Nomura and Lawyers Title require
that ▇▇▇▇▇▇▇ execute and delivery the within Certificate.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby mutual acknowledged, ▇▇▇▇▇▇▇ hereby represents,
warrants, certifies, covenants and agrees that:
1. The Easement constitutes the valid and binding obligation of ▇▇▇▇▇▇▇,
enforceable by and against it in accordance with its terms and conditions and
remains in full force and effect. Attached hereto is an accurate and complete
copy of the Easement and the same has not been modified or amended in any
manner.
2. There exist no unpaid maintenance costs, real estate taxes, lighting
costs or other sums, charges, costs or amounts of any kind under the Easement.
All duties, covenants and obligations of the parties thereunder have been
performed in full.
3. The undersigned agrees that, notwithstanding anything to the contrary
contained in the Easement, express or implied, any lien or encumbrance created
by or pursuant to the terms of the Easement for any unpaid sums, amounts,
charges, costs, taxes, or expenses, including, but not limited to, any lien
created pursuant to Section 5(d) thereof, is and shall in all respects be
subject and subordinate to the right, title and interest, legal or equitable, of
the beneficiary of any deed of trust covering, among other things, all or any
portion of the SB Premises and/or the ▇▇▇▇▇▇▇ Premises and to the lien and/or
security interest created by any such deed of trust, as the same may be amended,
modified, consolidated, increased, spread, extended, restated, assigned and/or
refinanced from time to time. Without limiting the foregoing, the undersigned
acknowledges that Nomura is the beneficiary under a deed of trust from HHP-I and
further acknowledges and agrees that the aforesaid liens or encumbrances are and
shall in all respects be subject and subordinate to Nomura's right, title and
interest, legal or equitable, as beneficiary under the deed of trust in and to
the SB Premises and the lien and/or security interest created by such deed of
trust on, in and to such Premises.
4. The undersigned acknowledges and agrees that this Certificate, and the
representations and warranties herein contained, is being given to induce (a)
HHP-I to acquire the SB Premises; (b) Nomura to finance HHP-I's acquisition of
the SB Premises, and (c) Lawyers Title to issue its policies of fee and
mortgagee title insurance for the benefit of HHP-I and Nomura, respectively, and
that HHP-I, Nomura and Lawyers Title may rely upon the same.
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇ has duly executed and delivered this
Certificate on the date and year first above written.
▇▇▇▇▇▇▇ COMPANY
By: ____________________________
Its: ____________________________
STATE OF VIRGINIA
COUNTY OF HENRICO, to-wit:
The foregoing instrument was acknowledged before me this _____ day of
November, 1996, by __________________________ of ▇▇▇▇▇▇▇ Company, a
_____________________ corporation.
My commission expires:
_________________________________
Notary Public
CONSENT TO ENCROACHMENT
THIS CONSENT AGREEMENT is made as of this _____ day of November, 1996, by
and between HH PROPERTIES-VB, INC., a Virginia corporation (hereinafter referred
to as "Owner"), and NORTHAMPTON INVESTORS (hereinafter referred to as
"Northampton").
RECITALS
A. Concurrently herewith, Owner has acquired that certain property
containing 3,895 acres located off of ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ ▇▇, in
the City of Virginia Beach, Virginia, having a street address of ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and commonly known as the "Cricket Inn" (the "Hotel
Parcel").
B. Northampton is the owner of the property located west of, and
adjoining, the Hotel Parcel on which there is located a Bojangles Restaurant
(the "Restaurant Facility").
C. The eastern walls and some curbing of the improvements constructed on
the Restaurant Facility (hereinafter referred to as the "Encroachment") encroach
upon the Hotel Parcel as shown on that certain plat of survey prepared by
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇ & Associates, Inc. dated August 21, 1996, entitled
"ALTA/ACSM LAND TITLE SURVEY FOR HH PROPERTIES-VR, INC., a copy of which plat is
recorded among the land records of the Clerk's Office of the Circuit Court of
the City of Virginia Beach, Virginia, in Plat Book _____, at Page _____, which
plat is incorporated herein by reference.
D. The parties hereto desire to set fort their agreement with respect to
the Encroachment.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and other valuable
consideration, Owner does hereby grant to Northampton, for its sole, exclusive
use, the right to encroach upon the Hotel Parcel, which right shall be revocable
at any time and at the sole discretion of the Owner. Owner agrees to give
Northampton written notice, as specified below, of such termination in which
event Northampton shall have a period of thirty (30) days from its receipt of
such notice to remove the Encroachment. Removal of the Encroachment and all
costs incurred in conjunction therewith shall be the sole responsibility of
Northampton. If Northampton fails to remove the Encroachment within such thirty-
day period, Owner shall have the right, but not the obligation, to remove the
Encroachment and Northampton agrees to reimburse Owner for all costs associated
therewith.
The parties further agree that the occupation of the Encroachment and the
exercise of rights with respect to the Encroachment shall be made solely
pursuant to this agreement.
This execution by Owner of this Consent is not to be construed in any
manner as a license for further encroachment on the Hotel Parcel. This Consent
shall automatically terminate upon removal of the Encroachment. The parties
agree that the destruction or removal of the Encroachment shall not entitle
Northampton to rebuild the encroachment. Changes in the physical shape or size
of the Encroachment or reconstruction of it shall be considered an additional
encroachment without authority and in violation of the legal rights and
interests of the Owner.
The Encroachment is subject and subordinate at all times to the paramount
rights of the Owner and lienholders. Northampton agrees to indemnify, defend
and save Owner, its successors in title and assigns, harmless from any and all
claims, demands, charges, suits or actions for property damage or loss, or loss
of use thereof, and personal injury and death, whether at law or in equity,
brought by any person, entity, or agency, including but not limited to employees
or agents of Northampton, and all expenses of litigation including but not
limited to attorneys' fees and litigation expenses, arising out of or in any
manner connected with the use, care, maintenance or removal of the Encroachment.
In the event any such proceeding should be filed, Northampton agrees that Owner
shall have the right to select counsel to defend such proceeding, and that
Northampton shall make payment of any and all court costs, expenses of
litigation, reasonable attorneys' fees and any judgments entered therein.
Any notice or election required or permitted to be given or served by any
party hereto shall be deemed given or served when deposited in the United States
mail registered or certified, return receipt requested, postage prepaid,
electronically transmitted by facsimile, delivered to a recognized or
established overnight courier services, or delivered in person, properly
addressed as follows:
In the case of notices directed to the Owner:
HH Properties-VB, Inc.
_____________________________
_____________________________
Attention:___________________
Facsimile No. _______________
In the case of notices directed to Northampton:
Northampton Investors
_____________________________
_____________________________
Attention:___________________
Facsimile No. _______________
This consent in no way relieves Northampton, its successors and assigns,
from any restrictions, if any, to which either the Restaurant Facility or the
Hotel Parcel is made subject by deed or otherwise, and the restrictions
contained in all applicable zoning ordinances.
IN WITNESS WHEREOF, Owner has caused this instrument to be executed on its
behalf by its duly authorized officer.
HH PROPERTIES-VB, INC.,
a Virginia corporation
By: ______________________________
Title: _________________________
IN WITNESS WHEREOF, Northampton agrees to the terms and conditions of the
foregoing consent.
NORTHAMPTON INVESTORS
By: ______________________________
Title: _________________________
COMMONWEALTH OF VIRGINIA
_________________ of _______________, to-wit:
The foregoing instrument was acknowledged before me this _____ day of
November, 1996, by ____________________, the duly authorized
____________________ of H&H Properties-VB, Inc., a Virginia corporation, on
behalf of said corporation.
My commission expires: ______________________________
______________________________
Notary Public
COMMONWEALTH OF VIRGINIA
_________________ of _______________, to-wit:
The foregoing instrument was acknowledged before me this _____ day of
November, 1996, by ____________________, the duly authorized
____________________ of Northampton Investors, a Virginia ______________, on
behalf of said _______________.
My commission expires: ______________________________
______________________________
Notary Public
Nondisturbance, Attornment and
Subordination Agreement
THIS AGREEMENT is made as of the _____ day of _____________, 1996, by and
among Nomura Asset Capital Corporation, a Delaware corporation (together with
its successors and assigns, "Mortgagee") Raleigh-Durham MSA Limited Partnership,
a _____________________ limited partnership, as successor in interest to SBA,
Inc. ("Tenant"), and HH Properties-I, Inc., a New York Corporation ("Landlord").
RECITALS
A. Landlord is the owner of those certain premises common known as ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇, more particularly described in Exhibit "A" attached
hereto (the "Real Estate");
B. Mortgagee is now or will be the owner and holder of a note (the
"Note") and a mortgage (the "Mortgage");
C. The Mortgage constitutes or will constitute a first lien upon the Real
Estate and the improvements (the "Improvements") situated thereon (collectively,
the "Property");
D. Under the terms of a certain Leas (the "Lease") dated December 14,
1995, and Assigned December 14, 1995, Landlord leased to Tenant a portion of the
improvements, as more particularly described in the Lease; and
E. The parties hereto desire to establish additional rights of quiet and
peaceful possession for the benefit of Tenant under the Lease and further to
define the terms, covenants and conditions precedent for such additional rights.
AGREEMENTS
1. Subordination. The Lease is and at all time shall be subordinate to the
Mortgage and to all renewals, modifications and amendments thereof and
thereto.
2. Non-Disturbance. In the event of foreclosure of the Mortgage (by judicial
process, power of sale or otherwise) or conveyance in lieu of foreclosure,
which foreclosure, power of sale, or conveyance occurs prior to the
expiration date of the Lease, including any extensions and renewals of the
Lease now provided thereunder, and so long as Tenant is not in default
under any of the terms, covenants and conditions of the Lease beyond any
applicable grace or cure period, Mortgagee agrees on behalf of itself, its
successors and assigns, and on behalf of any purchase at such foreclosure
("Purchaser") that Tenant shall not be disturbed in the quiet and peaceful
possession of the premises demised under the Lease. Tenant acknowledges
that Mortgagee has a
claim superior to Tenant's claim for insurance proceeds, if any, received
with respect to the Improvements or the Property.
3. Attornment. In the event of foreclosure of the Mortgage or conveyance in
lieu of foreclosure, which foreclosure or conveyance occurs prior to the
expiration date of the Lease, including any extensions and renewals of the
Lease now provided thereunder, Tenant shall attorn to Mortgage or Purchaser
and recognize Mortgagee or Purchaser as its landlord under the Lease, and
so long as Tenant is not in default under any of the terms, covenants and
conditions of the Lease beyond any applicable grace or cure period,
Mortgagee or Purchaser shall recognize and accept Tenant as its tenant
thereunder, whereupon the Lease shall continue, without further agreement,
in full force and effect as a direct lease between Mortgagee or Purchaser
and Tenant for the full term thereof, together with all extensions and
renewals now provided thereunder, upon the same terms, covenants and
conditions as therein provided, and Mortgagee or Purchaser shall thereafter
assume and perform all of Landlord's subsequent obligations, as landlord
under the Lease, with the same force and affect as if Mortgagee or
Purchaser were originally named therein as Landlord and Tenant shall
thereafter make all rent payment directly to either Mortgagee or Purchaser,
as the case may be, subject to limitations contained in Paragraphs 4 and 8
below.
4. Limitation of Liability. Notwithstanding anything to the contrary
contained herein or in the Lease, in the event of foreclosure of the
Mortgagee (by judicial process, power of sale or otherwise) or conveyance
in lieu of foreclosures, which foreclosure, power of sale or conveyance
occurs prior to the expiration date of the Lease, including any extensions
and renewals of the Lease now provided thereunder, the liability of
Mortgagee or Purchaser, as the case may be, shall be limited as set forth
below in Paragraph 8; provided, however, that Mortgagee or Purchaser, as
the case may be, shall in no event or to any extent:
(a) be liable to Tenant for any past act, omission or default on the part
of the original or any prior landlord under the Lease and Tenant shall
have no right to assert the same or any damages arising therefrom as
an offset, defense or deficiency against Mortgagee, Purchaser, or the
successors or assigns of any of them;
(b) be liable to Tenant for any prepayment of rent or deposit, rental
security or any other sums deposited with the original or any prior
landlord under the Lease and not delivered to Mortgagee;
(c) be bound by any amendment or modification of the Lease not consented
to by Mortgagee;
(d) be bound by any warranty or representation of Landlord relating to
work performed by Landlord under the Lease; or
2
(e) be liable to Tenant for construction or restoration, or delays in
construction or restoration, of the Improvements or the portion
thereof leased to Tenant.
5. Further Documents. The foregoing provisions shall be self-operative and
effective without the execution of any further instruments of the part of
any party hereto. Tenant agrees, however, to execute and deliver to
Mortgagee or to any person to whom Tenant herein agrees to attorn such
other instruments as either shall reasonably request in order to effectuate
said provisions.
6. Notice and Cure. Tenant agrees that if there occurs a default by Landlord
under the Lease:
(a) A copy of each notice given to Landlord pursuant to the Lease shall
also be given to Mortgagee, and no such notice shall be effective for
any purpose under the Lease unless so given to Mortgagee; and
(b) If Landlord shall fail to cure any default within the time prescribed
by the Lease, Tenant shall give further notice of such fact to
Mortgagee. Mortgagee shall have an additional 15 days after the
expiration of Landlord's cure period within which to cure such default
or, if such default cannot be cured within that time, then such
additional time as may be necessary if, within the initial 15 day cure
period, Mortgagee shall have commenced and shall be diligently
pursuing the remedies necessary to cure such default including, but
not limited to, commencement of foreclosure proceedings or otherwise
acquiring title to the Improvements, if necessary to effect such cure.
7. Notices. All notices, demands and requests given or required to be given
hereunder shall be in writing and shall be deemed to have been properly
given when personally served or if sent by U.S. registered or certified
mail, postage prepaid, addressed as follows:
Mortgagee: Nomura Asset Capital Corporation
2 World Financial ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to: Dechert Price & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Tenant: Raleigh-Durham MSA Limited Partnership
3
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Landlord: HH Properties-I, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to: Boylan, Brown, Code, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
8. Limitation of Personal Liability. Notwithstanding anything to the contrary
herein or in the Lease, in the event that Mortgagee or any Purchaser shall
acquire title to the Property, Mortgagee or Purchaser shall have no
obligation, nor incur any liability, beyond the then interest, if any, of
Mortgagee or Purchaser in the Property. Tenant shall look exclusively to
such interest of Mortgagee or Purchaser, if any, in the Property for the
payment and discharge of any obligations imposed upon Mortgagee or
Purchaser hereunder or under the Lease, and Mortgagee and Purchaser are
hereby released and relieved of any other liability hereunder and under the
Lease. As regards Mortgagee or Purchaser, Tenant shall look solely to the
estate or interest owned by Mortgagee or Purchaser in the Property and
Tenant will not collect or attempt to collect any such judgment out of any
other assets of Mortgagee or Purchaser. By executing this Agreement,
Landlord specifically acknowledges and agrees that nothing contained in
this Paragraph 8 shall impair, limit, affect, lessen, abrogate or otherwise
modify the obligations of Landlord to Tenant under the Lease.
9. Binding Effect. The terms, covenants and conditions hereof shall inure to
the benefit of and be binding upon the parties hereto, and their respective
heirs, executors, administrators, successors and assigns.
10. Modification. This Agreement may not be modified orally or in a manner
other than by an agreement signed by the parties hereto or their respective
successors in interest.
11. Choice of Law. This Agreement shall be governed by the internal law (and
not the law of conflicts) of the State in which the Property is located.
WITNESS the due execution of this instrument by the parties hereto the day
and year first above written.
4
MORTGAGEE:
NOMURA ASSET CAPITAL CORPORATION, a
Delaware corporation
By: ________________________________
Name:
Title:
Attest:
________________________________
______________________ Secretary
(Corporate Seal)
TENANT:
Raleigh-Durham MSA Limited Partnership (SEAL)
BY: TeleSpectrum, Inc. Its General Partner
By: ________________________________
Name:
Title:
Attest:
________________________________
______________________ Secretary
(Corporate Seal)
LANDLORD:
HH Properties-I, Inc., a New York corporation
By: ________________________________
Name:
Title:
Attest:
________________________________
______________________ Secretary
(Corporate Seal)
5
STATE OF ___________________)
COUNTY OF __________________)
I, ________________________________, a Notary Public of the county and
State aforesaid, certify that _____________________________________ personally
came before me this day and acknowledged that __he is __________________
Secretary of Nomura Asset Capital Corporation and that by authority duly given
and as the act of the corporation, the foregoing instrument was signed in its
name by its ______ President, sealed with its corporate seal, and attested by
_____self as its ____________ Secretary.
Witness my hand and official stamp this _____ day of __________, 19___.
_________________________________
Notary Public
My Commission Expires:
(Seal)
___________________________________
STATE OF ___________________)
COUNTY OF __________________)
I, ________________________________, a Notary Public of the county and
State aforesaid, certify that _____________________________________ personally
came before me this day and acknowledged that __he is __________________
Secretary of TeleSpectrum, Inc., General Partner of Raleigh-Durham MSA Limited
Partnership and that by authority duly given and as the act of the corporation,
the foregoing instrument was signed in its name by its ______ President, sealed
with its corporate seal, and attested by _____self as its ____________
Secretary.
Witness my hand and official stamp this _____ day of __________, 19___.
_________________________________
Notary Public
My Commission Expires:
(Seal)
___________________________________
6
STATE OF ___________________)
COUNTY OF __________________)
I, ________________________________, a Notary Public of the county and
State aforesaid, certify that _____________________________________ personally
came before me this day and acknowledged that __he is __________________
Secretary of HH Properties-I, Inc. and that by authority duly given and as the
act of the corporation, the foregoing instrument was signed in its name by its
______ President, sealed with its corporate seal, and attested by _____self as
its ____________ Secretary.
Witness my hand and official stamp this _____ day of __________, 19___.
_________________________________
Notary Public
My Commission Expires:
(Seal)
___________________________________
Dechert Price & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ Tower
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esquire
7
TENANT ESTOPPEL CERTIFICATE
Dated: ___________________, 1996
TO: Nomura Asset Capital Corporation
Together with its successors and assigns
Two World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
and
HH Properties-I, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: B. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Lease Dated: December 14, 1995
Landlord: HH Properties-I, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: B. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Tenant: Raleigh-Durham MSA Limited Partnership
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Premises: 336 square feet of space located on the roof top of
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇
The undersigned ("Tenant") hereby confirms, as of the date hereof, the
following:
1. Tenant is the tenant under the captioned lease (the "Lease") covering
the captioned space (the "Premises") in the building located at the above
address (the "Building"). Attached hereto as Exhibit A is a true and correct
copy of the Lease.
2. Tenant is in full and complete possession of the Premises, such
possession having been delivered by the captioned landlord (the "Landlord"), or
its predecessor in title, pursuant to the Lease and having been accepted by
Tenant. If the landlord named in the Lease is other than Landlord, Tenant
recognizes Landlord as the landlord under the Lease.
3. The improvements and space required to be furnished by the terms of
the Lease have been completed in all respects and the satisfaction of Tenant,
and are open for the use of Tenant, its employees, patients (or customers) and
invitees.
4. All duties of an inducement nature required of the Landlord in the
Lease have been fulfilled.
5. The Lease is in full force and effect; to the best of Tenant's
knowledge after due inquiry, there is no existing default on the part of Tenant
or on the part of the Landlord under the Lease; and the Lease has not been
amended, modified, supplemented, superseded or otherwise changed.
6. There are no other agreements between the Landlord and the Tenant with
respect to the Premises.
7. No rents have been prepaid more than thirty (30) days in advance of
its due date, except as provided by the Lease, and Tenant has not asserted, and
has no knowledge of, any claim against the Landlord under the Lease that might
be set-off or credited against future accruing rents.
8. Tenant has received no notice of a prior sale, transfer, assignment,
hypothecation or pledge of the Lease or of the rents secured therein.
9. Rents provided in the Lease commenced to accrue on the 1 day of
February, 1996.
10. A security deposit of $-0- has been paid to Landlord.
11. The term of the Lease commenced on February 1, 1996. The termination
date of the present term of the Lease, excluding renewals, is January 31, 2016.
12. Tenant has no right to renew or extend the current term of its Lease
except as follows:
Two additional terms of five (5) years each on the same terms and
conditions as stated in the Lease except rent shall be adjusted as provided
for in the Lease.
2
13. The current monthly rental (base rent, plus all additional rents
imposed in connection with Tenant's obligation, if any, to contribute to the
payment of real estate taxes, insurance premiums, common area maintenance and
other similar charges) due under the Lease is $________________.
14. Tenant has no right of first refusal, option or other right to
purchase the Premises or the Building, nor does Tenant have any right to
unilaterally cancel the Lease.
15. The address for notices to be sent to Tenant is as set forth in the
Lease.
16. There are no actions, whether voluntary or otherwise, pending against
Tenant under the bankruptcy laws of the United States or any state thereof.
17. Tenant acknowledges that the addressees hereof will rely upon this
statement in making a loan to Landlord, secured by a mortgage lien upon the
property of which this Premises is a part.
Very truly yours,
Raleigh-Durham MSA Limited Partnership (SEAL)
BY: TeleSpectrum, Inc. Its General Partner
By: ________________________________
Name:
Title:
Attest:
________________________________
______________________ Secretary
(Corporate Seal)
3
HH Properties-I, Inc. a
New York Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and
Nomura Asset Capital Corporation and
its successors and assigns
Two World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Declaration of Covenants and Easements recorded in Book 3108,
Page 819, Wake County Registry (the "Easement")
Ladies and Gentlemen:
The undersigned Marriott Resident Inn USA ("Marriott") is the owner of
Tract 3 as shown in Book of Maps 1983, Pages 378 & 379, Wake County Registry
("Tract 3"). SB Motel Raleigh Corp. is the owner of, and HH Properties-I, Inc.
is the contract purchaser of Tract 2 as shown in Book of Maps 1983, Page 379,
Wake County Registry ("Tract 2"). Nomura Asset Capital Corporation ("Nomura")
is the lender of HH Properties-I, Inc. ("HH") in its proposed purchase of Tract
2. Tract 2 and Tract 3 share a nonexclusive private access drive as shown in
Book of Maps 1983, Pages 378 and 379 pursuant to the Easement. This estoppel
letter is intended, pursuant to the Easements, to certify to HH and to Nomura,
which certifications they are entitled to rely upon, certain facts regarding the
status of the Easement.
Please accept this certification and confirmation, as of the date of this
estoppel letter, of Marriott with regard to the following:
1. The Easement constitutes the valid and binding obligation of Marriott,
enforceable by and against it in accordance with its terms and conditions and
remains in full force and effect. Attached hereto is an accurate and complete
copy of the Easement and the same has not been modified or amended in any
manner.
2. The Easement has been maintained properly and no maintenance or
repairs of the Easement is scheduled or required as of this time.
3. The owners of Tract 2 are not obligated to the owner of Tract 3 for
any costs or expense arising out of the Easements for maintenance, repair or
otherwise of the Easement. There exist no unpaid maintenance costs, real estate
taxes or other sums, charges, costs or amounts of any kind under the Easement.
All duties, covenants and obligations of the parties thereunder have been
performed in full.
The undersigned understands that this letter has been requested in
connection with Nomura's loan to HH and that in making such loan, Nomura is
relying on the information contained herein. The undersigned also understands
that HH is relying on the information contained herein in agreeing to purchase
Tract 2. The undersigned understands that Lawyers Title Insurance Corporation
is relying on the information contained herein to issue its policies of fee and
mortgagee title insurance for the benefit of HH and Nomura, respectively. The
undersigned signatory warrants to Nomura and HH that such signatory is
authorized and empowered to execute this document and bind the undersigned.
Marriott Residence Inn USA
By: _____________________________(seal)
Date:_____________________________
HH Properties-I, Inc. a
New York Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and
Nomura Asset Capital Corporation and
its successors and assigns
Two World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Easement Agreements for Ingress, Egress and Driveway Purposes recorded
in Book 3140, Page 104 and Declaration of Covenants and Easements
recorded in Book 3108, Page 819, Wake County Registry (the
"Easements")
Ladies and Gentlemen:
The undersigned ▇▇▇▇▇'▇ Inc. ("Denny's") is the owner of Tract 1 as shown
in Book of Maps 1983, Page 379, Wake County Registry ("Tract 1"). SB Motel
Raleigh Corp. is the owner of, and HH Properties-I, Inc. is the contract
purchaser of Tract 2 as shown in Book of Maps 1983, Page 379, Wake County
Registry ("Tract 2"). Nomura Asset Capital Corporation ("Nomura") is the lender
of HH Properties-I, Inc. ("HH") in its proposed purchase of Tract 2. Tract 1
and Tract 2 share a nonexclusive private access drive as shown in Book of Maps
1983, Page 379 pursuant to the Easement. This estoppel letter is intended,
pursuant to the Easements, to certify to HH and to Nomura, which certifications
they are entitled to rely upon, certain facts regarding the status of the
Easement.
Please accept this certification and confirmation, as of the date of this
estoppel letter, of Denny's with regard to the following:
1. The Easements constitute valid and binding obligations of Denny's,
enforceable by and against it in accordance with their terms and conditions and
remain in full force and effect. Attached hereto are accurate and complete
copies of the Easements and the same have not been modified or amended in any
manner.
2. The Easements have been maintained properly and no maintenance or
repairs of the Easements are scheduled or required as of this time.
3. The owners of Tract 2 are not obligated to the owner of Tract 1 for
any costs or expense arising out of the Easements for maintenance, repair or
otherwise of the Easement. There exist no unpaid maintenance costs, real estate
taxes or other sums, charges, costs or amounts of any kind under the Easements.
All duties, covenants and obligations of the parties thereunder have been
performed in full.
The undersigned understands that this letter has been requested in
connection with Nomura's loan to HH and that in making such loan, Nomura is
relying on the information contained herein. The undersigned also understands
that HH is relying on the information contained herein in agreeing to purchase
Tract 2. The undersigned understands that Lawyers Title Insurance Corporation
is relying on the information contained herein to issue its policies of fee and
mortgagee title insurance for the benefit of HH and Nomura, respectively. The
undersigned signatory warrants to Nomura and HH that such signatory is
authorized and empowered to execute this document and bind the undersigned.
▇▇▇▇▇'▇ Inc.
By: _____________________________(seal)
Date:_____________________________
CONTRACT AMENDMENT NO. 3
THIS INSTRUMENT is entered into as of the 27th day of November, 1996
by SB Motel Richmond Corp., SB Motel Durham-Research Triangle Park Corp., SB
Motel Cary Corp., SB Motel Statesville Corp., SB Motel Wilmington Corp., SB
Motel Columbia Corp., SB Motel Charleston Corp., SB Motel Albany Corp., SB Motel
Virginia Beach Corp., SB Motel ▇▇▇▇▇▇-▇▇▇▇ Corp., SB Motel Raleigh Corp., and SB
Motel Charlotte 1-85 Corp., (Collectively, "Sellers"), ▇▇▇▇▇▇ Hotels Properties
Corp. ("Purchaser") and ▇▇▇▇▇▇ Hotels Corporation ("▇▇▇▇▇▇").
WHEREAS, Purchaser entered into an Agreement of Purchase and Sale
dated September 27, 1996, as amended by Contract Amendment No. 1 dated October
31, 1996 and further amended by Contract Amendment No. 2 dated November 18, 1996
(the "Agreement") with Sellers covering twelve properties in the States of North
Carolina, South Carolina, Georgia and Virginia (collectively, the "Premises");
and
WHEREAS, ▇▇▇▇▇▇, Sellers and Purchase desire to amend Section 12.4
of the Agreement as set forth below. All terms not defined herein shall have the
meanings ascribed to them in the Agreement.
NOW THEREFORE, ▇▇▇▇▇▇, Sellers and Purchaser hereby agree that the
Agreement is hereby amended as follows:
1. The first sentence of Section 12.4 of the Agreement is hereby
deleted in its entirety and replaced with the following:
"Except as provided in Section 12.5, each of the representations and
warranties contained in Sections 12.1 and 12.3 (collectively, the
"Base Reps") shall survive the Closing until the first anniversary
of the Closing Date, provided further that, upon a sale, assignment
or other transfer of any of the Premises by Purchaser, the
representations and warranties set forth in Section 12.3 shall not
survive with respect to the portion of the Premises being
transferred thereunder, if sooner."
2. Purchaser acknowledges and agrees that Sellers (as such term and
all other terms which are capitalized but not defined herein are defined in the
Agreement) have designated SB Motel Corp. as the payee of the Note pursuant to
Section 5.4(a) of the Agreement and as the transferee and holder of the
certificates representing the Shares. SB Motel Corp. shall be entitled to all of
the rights and benefits of Sellers under the Agreement which relate to the Note
and/or the Shares, including, without limitation, all rights and benefits
provided for in Section 15 of the Agreement and any and all rights under
other covenants, representations or warranties in the Agreement or related
documents relating to the Note or the Shares. Accordingly, but without limiting
the generality of the foregoing, Section 15 of the Agreement is hereby deleted
in its entirety and the following substituted therefor:
"Section 15. ▇▇▇▇▇▇ COVENANTS.
15.1 For as long as SB Motel Corp. or any other direct or
indirect wholly owned subsidiary of Salomon Brothers Holding Company Inc
(as the case may be, "SBMC") owns any of the Shares, ▇▇▇▇▇▇ shall provide
at least 30 days' prior written notice to Salomon Brothers Inc (at the
address for Sellers set forth herein) of any equity offering of ▇▇▇▇▇▇
("Equitv Offering") and an opportunity to make the first offer to
underwrite such offering. Provided that Salomon Brothers Inc shall submit
a written proposal to ▇▇▇▇▇▇ with respect to such underwriting within 20
days after written notice from ▇▇▇▇▇▇ that it proposes to have such Equity
Offering, and provided further that, after reviewing whether Salomon
Brothers Inc's proposal has terms, pricing, a fee structure and any other
pertinent business terms substantially similar in ▇▇▇▇▇▇'▇ judgment to
those available from an alternative underwriter, ▇▇▇▇▇▇ shall give due
consideration to Salomon Brothers Inc's proposal but, subject to the
remaining provisions of this Section 15.1, shall have the sole and
absolute discretion to determine whether or not to choose Salomon Brothers
Inc as the principal underwriter. Notwithstanding the foregoing, if ▇▇▇▇▇▇
after giving such due consideration wishes to accept an offer from an
alternative underwriter (the "Alternative Underwriter") in connection with
any Equity Offering, ▇▇▇▇▇▇ shall provide at least five (5) Business Days'
prior written notice (the "Right of First Refusal Period") of same to
Salomon Brothers Inc (at the address for Sellers set forth herein).
Provided that within the Right of First Refusal Period Salomon Brothers
Inc shall submit a written proposal to ▇▇▇▇▇▇ with respect to such
underwriting which is substantially similar to the terms, pricing, fee
structure and any other pertinent business terms of the offer of the
Alternative Underwriter (the "Matching Offer"), ▇▇▇▇▇▇ shall accept the
Matching Offer of Salomon Brothers Inc to be the principal underwriter. If
Salomon Brothers Inc does not provide ▇▇▇▇▇▇ with a Matching Offer during
the Right of First Refusal Period, ▇▇▇▇▇▇ shall be entitled to enter into
an underwriting commitment with the Alternative Underwriter within thirty
(30) days after the expiration of the Right of First Refusal Period,
provided that the underwriting
-2-
commitment entered into with the Alternative Underwriter is no more
favorable to the Alternative Underwriter (in its terms, pricing, fee
structure and any other pertinent business terms which shall be specified
therein) than the Alternative Underwriter's offer as aforesaid. If, at the
end of such 30 day period, ▇▇▇▇▇▇ shall not have entered into such
underwriting commitment agreement with the Alternative Underwriter, ▇▇▇▇▇▇
shall again be obligated to comply with the provisions of this Section
15.1 (and to provide Salomon Brothers Inc the aforesaid right of first
offer and right of first refusal) with respect to any Equity Offering.
▇▇▇▇▇▇ acknowledges that the rights granted to Salomon Brothers Inc
hereunder constitute material consideration and inducement to Sellers to
enter into this transaction. Salomon Brothers Inc and SBMC shall be a
third party beneficiary under this Section 15 but shall not have any
obligation or liability whatsoever under this Agreement. For the purposes
hereof, any form or type of equity offerings of ▇▇▇▇▇▇ shall not include
any type of mortgage, line of credit, bond or debenture financing.
15.2 ▇▇▇▇▇▇ hereby covenants with Sellers that from and after
the Closing, any public announcements or disclosures made by ▇▇▇▇▇▇ with
respect to this Agreement or the transactions contemplated hereby
(including, without limitation, the Shares, the Note, the Purchase Price
or the Premises) shall first be sent to SBMC for its review and approval.
Until such approval has been given to ▇▇▇▇▇▇ by SBMC, ▇▇▇▇▇▇ shall refrain
from making such public disclosures or announcements.
15.3 (a) ▇▇▇▇▇▇ hereby covenants with SBMC that, in the event
a Closing takes place hereunder, ▇▇▇▇▇▇ shall immediately commence the
preparation and filing of a registration statement registering the Shares
for sale with the SEC as more particularly set forth below. ▇▇▇▇▇▇ shall
diligently prosecute the registration and shall register the Shares no
later than one hundred eighty (180) days after the Closing and shall take
any and all actions necessary to maintain the effectiveness of the
registration, including post-effective amendments, if necessary, until
SBMC has disposed of all of the Shares. To this end, following the Closing
Date, ▇▇▇▇▇▇ shall file with the SEC a registration statement under the
Securities Act for the offering on a continuous or delayed basis in the
future of all of the Shares (this and subsequent filings of registration
statements provided hereinafter, the "Shelf Registration"). The Shelf
Registration shall be on an appropriate form and the Shelf
-3-
Registration and any form of prospectus included therein or prospectus
supplement relating thereto shall reflect such plan of distribution or
method of sale as SBMC may from time to time notify ▇▇▇▇▇▇, including the
sale of some or all of the Shares in a public offering or, if requested by
SBMC, subject to receipt by ▇▇▇▇▇▇ of such information (including
information relating to purchasers) as ▇▇▇▇▇▇ reasonably may require, (i)
in a transaction constituting an offering outside the United States which
is exempt from the registration requirements of the Securities Act in
which ▇▇▇▇▇▇ undertakes to effect registration after the completion of
such offering in order to permit such shares to be freely tradeable in the
United States, (ii) in a transaction constituting a private placement
under Section 4(2) of the Securities Act in connection with which ▇▇▇▇▇▇
undertakes to effect a registration after the conclusion of such placement
to permit such shares to be freely tradeable by the purchasers thereof,
or (iii) in a transaction under Rule 144A of the Securities Act in
connection with which ▇▇▇▇▇▇ undertakes to effect a registration after the
conclusion of such transaction to permit such shares to be freely
tradeable by the purchasers thereof. ▇▇▇▇▇▇ shall use its best efforts to
keep the Shelf Registration continuously effective for the period
beginning on the date on which the Shelf Registration is declared
effective and ending on the first date that there are no Shares remaining
in the possession of SBMC (the "Registration Period"), and in the event
that notwithstanding ▇▇▇▇▇▇'▇ best efforts, ▇▇▇▇▇▇ fails to keep the Shelf
Registration effective, ▇▇▇▇▇▇ shall file with the SEC another Shelf
Registration, such that a Shelf Registration is continually in effect
during the Registration Period. During the Registration Period, ▇▇▇▇▇▇
shall supplement or make amendments to the Shelf Registration, if required
by the Securities Act or if reasonably requested by SBMC or an underwriter
of Registrable Securities, including to reflect any specific plan of
distribution or method of sale, and shall use its reasonable best efforts
to have such supplements and amendments declared effective, if required,
as soon as practicable after filing.
(b) Until sixty (60) days following the beginning of the
Registration Period, ▇▇▇▇▇▇ and E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ covenant that B. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ acting in his individual capacity shall not sell any shares of
▇▇▇▇▇▇ Common Stock other than under and pursuant to Rule 144 of the
Securities Act. E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ has executed this Agreement below in his
individual capacity to confirm his agreement to such covenant.
-4-
15.4 If, at any time from and after the Closing Date and until
commencement of the Registration Period, ▇▇▇▇▇▇ shall propose to prepare
on its own behalf or on behalf of any of its shareholders (other than
SBMC) a registration statement in connection with an underwritten public
offering of any securities of ▇▇▇▇▇▇, ▇▇▇▇▇▇ shall give SBMC notice at
least 20 days before the anticipated filing date of such registration
statement. Should SBMC desire to have any Shares owned by SBMC included in
such registration statement, SBMC shall so advise ▇▇▇▇▇▇ no later than 15
days after ▇▇▇▇▇▇'▇ notice is given, setting forth the number or amount of
Shares which SBMC requests to be included in the registration statement,
and ▇▇▇▇▇▇ shall include the Shares specified in such request in such
registration statement and keep such registration statement in effect and
maintain relevant compliance with each federal and state law and
regulation. Notwithstanding the foregoing, (i) ▇▇▇▇▇▇ shall not be
required to give notice or include such Shares in any such offering if the
proposed registration relates solely to the sale of securities to
participants in a dividend reinvestment plan, is to be made on Form S-4
and relates to a business combination or similar transaction permitted to
be registered on such Form S-4, is to be made on Form S-8 and relates
solely to the sale of securities to participants in a stock or employee
benefit plan, or is permitted under Rule 462 promulgated under the
Securities Act and registers additional securities of the same class as
were included in an earlier registration statement for the same offering
and declared effective; and (ii) ▇▇▇▇▇▇ may, in its sole discretion,
withdraw such registration statement and abandon the proposed offering.
15.5 To the extent required from time to time to enable SBMC
to sell Shares without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 promulgated under the
Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC, ▇▇▇▇▇▇ will file
in a timely manner (taking into account any extensions granted by the
SEC), information, documents and reports in compliance with the Exchange
Act and will, at its expense, forthwith upon the request of SBMC, deliver
to SBMC a certificate, signed by ▇▇▇▇▇▇'▇ principal financial officer,
stating (a) ▇▇▇▇▇▇'▇ name, address and telephone number (including area
code), (b) ▇▇▇▇▇▇'▇ Internal Revenue Service identification number, (c)
▇▇▇▇▇▇'▇ SEC file number, (d) the number of shares of ▇▇▇▇▇▇'▇ common
stock and the number of shares of any preferred stock of ▇▇▇▇▇▇
-5-
outstanding as shown by the most recent report or statement published by
▇▇▇▇▇▇, and (e) whether ▇▇▇▇▇▇ has filed the reports required to be filed
under the Exchange Act for a period of at least 90 days prior to the date
of such certificate and in addition has filed the most recent annual
report required to be filed thereunder. If at any time ▇▇▇▇▇▇ is not
required to file reports in compliance with either Section 13 or Section
15(d) of the Exchange Act, ▇▇▇▇▇▇ will, at its expense, forthwith upon the
written request of SBMC, make available adequate current public
information with respect to ▇▇▇▇▇▇ within the meaning of paragraph (c) (2)
of Rule 144 of the General Rules and Regulations promulgated under the
Securities Act.
15.6 (a) Following the registration of the Shares as provided
herein, the parties understand that SBMC may dispose of the Shares using
several different methods, which may include an underwritten offering. In
the event that SBMC elects to utilize an underwriter, ▇▇▇▇▇▇ shall enter
into a customary underwriting agreement providing for customary
indemnities for the underwriters and the selling security holders. ▇▇▇▇▇▇
shall pay all costs and expenses of whatsoever nature which arise from or
relate to the registration or sale of the Shares as aforesaid, except that
the seller of the Shares shall be responsible for any underwriting
discounts or commissions.
(b) In the event that SBMC shall elect to dispose of the
Shares in a transaction or series of transactions not involving an
underwriting, ▇▇▇▇▇▇ and SBMC shall enter into a customary indemnity
agreement providing for an indemnity to each party for statements or
information in the registration statement pertaining to or provided by the
indemnifying party.
5.7 (a) ▇▇▇▇▇▇ shall, if so requested by SBMC within five (5)
Business Days after the expiration of the Feasibility Period, appoint and
maintain, commencing on the Closing Date and for as long as SBMC holds any
Shares, an observer of ▇▇▇▇▇▇'▇ Board of Directors, designated by SBMC,
who shall be invited to attend all meetings of the Board of Directors and
shall be compensated in the same manner as are non-employee directors of
▇▇▇▇▇▇. Such observer shall be indemnified by ▇▇▇▇▇▇ against all claims
and liabilities arising out of his or her participation in the meetings of
the Board of Directors.
(b) Alternatively, from and after the Closing Date, SBMC
shall have the right (but not the
-6-
obligation) to have on the board of directors of ▇▇▇▇▇▇ (the "Board") one
director (such director and any other person made a director of the Board
pursuant to this Section 15.8, the "SBMC Nominee"), and ▇▇▇▇▇▇ shall
promptly cause SBMC Nominee to become a member of the Board. If necessary
to effectuate the placement of the SBMC Nominee on the Board, ▇▇▇▇▇▇
shall, at its sole option, (i) expand the size of the Board or (ii)
solicit the resignation of one of its directors, in either case, to the
extent necessary to permit the SBMC Nominee to serve. Until such time that
SBMC no longer owns any of the Shares, SBMC shall have the right to
maintain a SBMC Nominee on the Board. SBMC agrees to indicate to Purchaser
within five (5) Business days after the expiration of the Feasibility
Period whether they will request a SBMC Nominee to be placed on the Board
immediately following Closing.
(c) If SBMC elects to exercise its option in Section
15.7(b) above, ▇▇▇▇▇▇ will support the nomination of, and ▇▇▇▇▇▇'▇
nominating committee (or any other committee exercising a similar
function) shall recommend to the Board, the election of any SBMC Nominee
to the Board, and ▇▇▇▇▇▇ will exercise all authority under applicable law
to cause such SBMC Nominee to be elected to the Board. Without limiting
the generality of the foregoing, with respect to each meeting of
shareholders of ▇▇▇▇▇▇ at which directors are to be elected, ▇▇▇▇▇▇ shall
use its reasonable efforts to solicit from the shareholders of ▇▇▇▇▇▇
eligible to vote in the election of directors proxies in favor of such
SBMC Nominee.
(d) In the event that any SBMC Nominee shall cease to
serve as a director for any reason other than the fact that SBMC no longer
has a right to nominate a director, as provided in subsection (b), the
vacancy resulting thereby shall, if SBMC so chooses in their sole
discretion, be filled by a SBMC Nominee designated by SBMC.
15.8 The rights and benefits of SBMC set forth in Sections
15.3(a), 15.4, 15.5 and 15.6 hereunder shall inure to the benefit of any
of SBMC's successors, assigns or transferees who obtain a legal or
beneficial interest in the Shares, other than in connection with the sale
thereof pursuant to the registration described in Section 15.3(a) or 15.4.
15.9 Each of the covenants contained in this Section iS shall
survive the Closing until SBMC no longer owns any of the Shares."
-7-
IN WITNESS WHEREOF, the undersigned have duly executed this
Amendment as of the day and year first above written.
SELLERS: SB MOTEL RICHMOND CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL DURHAM-RESEARCH
TRIANGLE PARK CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL ▇▇▇▇ CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL STATESVILLE CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL WILMINGTON CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL COLUMBIA CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL CHARLESTON CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL ALBANY CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL VIRGINIA BEACH CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL ▇▇▇▇▇▇-▇▇▇▇ CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL RALEIGH CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SB MOTEL CHARLOTTE I-85 CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
PURCHASER: ▇▇▇▇▇▇ HOTELS PROPERTIES CORP.
By: /s/ E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman and Chief
Executive Officer
▇▇▇▇▇▇: ▇▇▇▇▇▇ HOTELS CORPORATION
By: /s/ E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman and Chief
Executive Officer
ESCROW AGENT: LAWYERS TITLE INSURANCE CORPORATION
(Solely as Escrow
Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Title: AUTHORIZED AGENT
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E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ is executing this
amendment in his individual capacity
solely in order to make the covenant
set forth in Section 15.3(b) of the
Agreement, as amended hereby.
/s/ E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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E. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇