UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ________________)*
Hudson Hotels Corporation
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(Name of Issuer)
Common Stock, par value $0.001
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(Title of Class of Securities)
443794102
-----------------------------------------------------
(CUSIP Number)
c/o Richard D. Scribner, Salomon Brothers Inc
Seven World Trade Center, New York, New York 10048
(212) 783-7400
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
November 18, 1996
-----------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box. /__/
Check the following box if a fee is being paid with the
statement.
<PAGE>
/__/ (A fee is not required only if the reporting person: (1) has
a previous statement on file reporting beneficial ownership of
more than five percent of the class of securities described in
Item 1; and (2) has filed no amendment subsequent thereto
reporting beneficial ownership of five percent or less of such
class.) (See Rule 13D-7.)
Note: Six copies of this statement, including all exhibits, should
be filed with the Commission. See Rule 13d-1(a) for other parties
to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
- ------------------- ----------------------
CUSIP No. 443794102 Page 2 of 22 Pages
- ------------------- ----------------------
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Salomon Brothers Holding Company Inc
13-3082695
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF, 00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [X]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY 8 SHARED VOTING POWER
370,657 shares
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH REPORTING
SHARED DISPOSITIVE POWER
PERSON 10 370,657 shares
WITH
- -------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
370,657 shares
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* /__/
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<PAGE>
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.7%
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14 TYPE OF REPORTING PERSON*
CO, HC
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE
SIGNATURE ATTESTATION.
SEC 1746(12-91)
<PAGE>
Item 1. Security and Issuer.
-------------------
The title of the class of equity securities to which
this statement relates is the common stock, par value $0.001 (the
"Common Stock"), of Hudson Hotels Corporation, a New York
corporation (the "Issuer"). The principal executive offices of
the Issuer are located at One Airport Way, Suite 200, Rochester,
New York 14624.
Item 2. Identity and Background.
-----------------------
(a-c, f) This statement on Schedule 13D is being filed
by Salomon Brothers Holding Company Inc ("SBHC"), a corporation
organized under the laws of the State of Delaware. All of the
Common Stock reported herein is directly beneficially owned by SB
Motel Corp. ("SBMC"), a corporation organized under the laws of
the State of Delaware. As described in Item 4, beneficial
ownership of the Common Stock reported herein was originally
acquired jointly by the following twelve entities (collectively,
the "SBMC Subsidiaries"), each of which is a corporation
organized under the laws of the State of Delaware: 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
Durham-Duke Corp., SB Motel Raleigh Corp. and SB Motel Charlotte
I-85 Corp. Each of the SBMC Subsidiaries is a wholly-owned
subsidiary of SBMC. SBMC is in turn a wholly-owned subsidiary of
SBHC, which is in turn a wholly-owned subsidiary of Salomon Inc,
a corporation organized under the laws of the State of Delaware.
The principal executive offices of the SBMC Subsidiaries, SBMC,
SBHC, and Salomon Inc are located, and the principal business
activities of each are conducted, at Seven World Trade Center,
New York, New York 10048.
The principal business of each of the SBMC
Subsidiaries is the ownership and operation of one limited
service hotel. The principal business of SBMC is the ownership of
all the outstanding shares of common stock of each of the SBMC
Subsidiaries and the ownership of other subsidiaries that own
hotel properties. The principal business of SBHC is the ownership
of all the outstanding shares of common stock of Salomon Brothers
Inc ("SBI"). The principal business of Salomon Inc is the
ownership of all the outstanding shares of common stock of SBHC,
Basis Petroleum, Inc. (which owns two oil refineries in Texas and
one in Louisiana and other asset-based businesses), and Phibro
Inc. (which is engaged in commodities trading, concentrating on
crude oil and energy derivatives).
Page 3 of 22 Pages
<PAGE>
The names, citizenship, business addresses and
principal occupations or employments of each of the executive
officers and directors of Salomon Inc, SBHC, SBMC, and each of
the SBMC Subsidiaries are set forth in Annexes A, B, C and D
hereto respectively, which are incorporated herein by reference.
(d-e) On May 20, 1992, SBI and Salomon Inc (together
"Salomon") consented, without admitting or denying any of the
allegations of the concurrently filed complaint, to the entry of
a Final Judgment of Permanent Injunction and Other Relief (the
"Final Judgment") in settlement of an action arising out of
alleged misconduct in auctions of U.S. Treasury securities and
government securities trading, brought by the Securities and
Exchange Commission (the "SEC") in the United States District
Court for the Southern District of New York, entitled Securities
and Exchange Commission v. Salomon Inc and Salomon Brothers Inc
(92 Civ. 3691 and Securities and Exchange Act Release No. 30721
(May 20, 1992)) (the "Treasury Matter"). Among other things, the
Final Judgment enjoins Salomon from violations of Section 17(a)
of the Securities Act of 1933 (the "1933 Act"), Sections 10(b),
15(c)(1) and 17(a) of the Securities Exchange Act of 1934 (the
"1934 Act") and Rules 10b-5, 15c1-2, 17a-3 and 17a-4 promulgated
thereunder. Pursuant to the settlement, Salomon was required to
pay a total amount of $290,000,000, with $100,000,000 going to a
fund for the payment of private claims for compensatory damages
arising out of the U.S. Treasury auction and related matters and
$190,000,000 to the United States in payment of civil penalties
under the Securities Enforcement Remedies and Penny Stock Reform
Act of 1990 and a forfeiture of assets to and settlement of
claims with the Department of Justice against SBI. On the same
day, in other related actions solely involving SBI, the SEC
instituted and settled an administrative proceeding relating to a
failure to supervise the persons responsible for the alleged
misconduct, the Federal Reserve Bank of New York announced the
continuation of SBI's primary dealer designation but a cessation
of its trading activity until August 3, 1992, and the Department
of Treasury announced that SBI would be permitted to resume
bidding for customers on August 3, 1992, having restricted SBI to
purchasing securities for its own account in U.S. Treasury
auctions since August 18, 1991.
In January and February 1993, SBI, without admitting
or denying any allegations, entered into consent agreements and,
in some states, consent orders with 41 state securities
regulators in settlement of certain claims in respect of SBI's
state broker-dealer registrations arising out of SBI's activities
described in the Treasury Matter. Pursuant to the settlement with
the states, SBI agreed, among other things, to (i) comply with
those provisions of the order issued by the SEC in the Treasury
Matter that imposed remedial sanctions with respect to alleged
Page 4 of 22 Pages
<PAGE>
violations of securities laws by former personnel of SBI in
auctions for United States Treasury Securities during 1990 and
1991; (ii) pay $50,000 to each state participant in the
settlement as reimbursement for costs of investigation related to
the Treasury Matter; and (iii) with respect to some states,
contribute $2,000,000 to a multi-state investor protection trust
fund to be created for the purpose of providing funds for
projects promoting the cause of investor protection.
On August 26, 1996, the SEC simultaneously instituted
a cease-and-desist proceeding pursuant to Section 21C of the 1934
Act against Salomon Inc and accepted Salomon Inc's Offer of
Settlement. Salomon Inc, by its Offer of Settlement, consented to
the imposition of a cease-and-desist order and the entry of the
findings therein without admitting or denying such findings. The
SEC found that Salomon Inc had violated Section 13(b)(2) of the
1934 Act. Specifically, the SEC determined that Salomon Inc had
failed to perform thorough and timely reconciliations of its
balance sheet accounts to supporting documentation, and thus
failed to identify on a timely basis erroneous entries made by
its staff. Moreover, Salomon Inc had failed to ensure that
correction procedures were properly implemented in London, in
part by failing to train adequately its staff to use a new
automated system. These failures resulted in the overstatement of
assets and income on the books, records, and accounts of Salomon
Inc and its subsidiaries. In determining to accept Salomon Inc's
Offer of Settlement, the SEC considered remedial acts promptly
undertaken by Salomon Inc and cooperation afforded the SEC staff.
Other than as aforesaid, during the last five years
neither SBHC nor, to the best knowledge of SBHC, Salomon Inc,
SBMC, any of the SBMC Subsidiaries or any of the persons listed
in Annexes A, B, C or D hereto, has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors)
or was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of
which Salomon Inc, SBHC, SBMC, any of the SBMC Subsidiaries, or
any of such persons was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
Page 5 of 22 Pages
<PAGE>
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
Beneficial ownership of the shares of Common Stock of
the Issuer described in Item 5 has been acquired in connection
with the sale to Hudson Hotels Property Corp. ("HHPC"), a
wholly-owned subsidiary of the Issuer, of the hotels owned by
each of the SBMC Subsidiaries. As part of the purchase price of
the twelve hotels, HHPC is delivering shares of Common Stock in
the amount described in Item 5.
Item 4. Purpose of Transaction.
----------------------
The Common Stock to which this Statement relates is
being acquired in connection with the sale of twelve hotels by
the SBMC Subsidiaries. The sale of the hotels is being made
pursuant to an Agreement of Purchase and Sale dated September 27,
1996 among the SBMC Subsidiaries, the Issuer, and HHPC (the
"Agreement"). The Agreement was subsequently amended by a
Contract Amendment No. 1 dated October 31, 1996 ("Amendment No.
1"), a letter agreement dated November 15, 1996 (the "Letter
Agreement"), a Contract Amendment No. 2 dated November 18, 1996
("Amendment No. 2"), and a Contract Amendment No. 3 dated
November 27, 1996 ("Amendment No. 3", and together with the
Agreement, Amendment No. 1, Amendment No. 2 and the Letter
Agreement, the "Amended Agreement"). Copies of the Agreement,
Amendment No. 1, the Letter Agreement, Amendment No. 2, and
Amendment No. 3 are attached hereto as Exhibits 1, 2, 3, 4, and
5, respectively, which are incorporated by reference herein.
The Agreement provided for a feasibility period (the
"Feasibility Period") from the date of the Agreement until
October 31, 1996, during which HHPC was allowed to conduct
diligence relating to the hotel properties. During the
Feasibility Period, HHPC had the right to terminate the Agreement
without penalty at its sole discretion. In Amendment No. 1, the
Feasibility Period was extended to Midnight, Eastern Standard
Time, November 15, 1996, and in the Letter Agreement, the
Feasibility Period was extended to Midnight, Eastern Standard
Time, November 18, 1996. HHPC did not exercise its termination
right within the Feasibility Period.
The total purchase price to be paid to the SBMC
Subsidiaries by HHPC under the Amended Agreement is $60,400,000,
subject to reduction in certain circumstances, to be paid in the
form of (i) $55,000,000 cash, less a cash deposit of $1,450,000
that has already been paid into an escrow account, (ii) a
promissory note in the amount of $3,000,000 (less certain closing
adjustments), and (iii) a certain number of shares of Common
Page 6 of 22 Pages
<PAGE>
Stock of the Issuer determined at the closing of the sale of the
hotels based on the formula described in Item 5. The closing (the
"Closing") of the transactions contemplated by the Amended
Agreement occurred on November 27, 1996.
In the Amended Agreement, the Issuer has agreed to
grant to SBI a right to make the first offer and a right of first
refusal to be the principal underwriter for any equity offering
by the Issuer. The Issuer has also agreed in the Amended
Agreement to take various steps to permit the disposition of the
Common Stock acquired by the SBMC Subsidiaries in a manner
consistent with applicable securities laws. Within 180 days of
the date of the Closing, the Issuer has agreed to register the
shares of Common Stock acquired by the SBMC Subsidiaries under
the 1933 Act and to maintain a shelf registration statement to
allow the continuous or delayed offering of such Common Stock
until all of the shares of Common Stock acquired under the
Amended Agreement are disposed of.
In addition, under the Amended Agreement, SBMC is
entitled to nominate an observer of the Issuer's Board of
Directors (the "Board") or, in the alternative, to appoint one
member of the Board at or after the date of the Closing. It is
currently intended that John P. Buza, a Vice President of SBI and
SBMC, will be appointed as a director under the latter provision.
The SBMC Subsidiaries have instructed the Issuer to
register the shares to be delivered at Closing in the name of
SBMC. SBMC at any time or from time to time may (i) acquire, or
agree to acquire, or acquire put or call options relating to,
additional shares of Common Stock or other securities of the
Issuer, (ii) sell, or agree to sell, or sell put or call options
relating to, some or all of such shares of Common Stock or such
other securities of the Issuer owned by SBMC, in each such case
in the open market, in negotiated transactions or otherwise,
(iii) make or receive proposals to enter into negotiations with
respect to such transactions and/or (iv) surrender such shares of
Common Stock or such other securities of the Issuer owned by SBMC
in connection with any merger, tender offer or other acquisition
transaction involving the Issuer. SBMC's decisions in such regard
will be based on the prevailing price of the shares of Common
Stock or other such securities in the open market and/or in any
negotiated transactions, the value of the consideration being
offered in any merger, tender offer or other acquisition
transaction involving the securities of the Issuer, tax
considerations and any other relevant factors. Other than as
described above, SBMC has no plans or proposals that relate to or
would result in any transactions involving the Issuer or any of
its subsidiaries or securities of the type or kind listed in Item
4 of Schedule 13D adopted by the SEC under the 1934 Act.
Page 7 of 22 Pages
<PAGE>
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a-b) By reason of their relationship, Salomon Inc and
SBHC may be deemed to share voting and dispositive power with
respect to shares of Common Stock originally directly
beneficially owned by the SBMC Subsidiaries and now directly
beneficially owned by SBMC.
The number of shares of Common Stock acquired by SBMC
has been determined on the date of the Closing based on a formula
set forth in the Amended Agreement. Under this formula, SBMC will
receive the lesser of 400,000 shares or $2,400,000 divided by the
average closing price of the Common Stock for the five trading
days preceding the date of the Closing.
The average closing price of the Common Stock for the
five days preceding the date of the Closing was $6.475. The
number of shares of Common Stock that will therefore be acquired
by SBMC at the Closing is 370,657. According to the Form 10-Q
filed by the Issuer for the quarter ended September 30, 1996,
4,416,805 shares of its Common Stock were issued and outstanding
as of November 4, 1996. 370,657 shares of Common Stock represents
approximately 7.7% of the outstanding shares of Common Stock
(based on 4,787,462 shares of Common Stock outstanding, including
the 370,657 shares issued at Closing).
Except as described above, neither SBHC nor, to the
best knowledge of SBHC, any of Salomon Inc, SBMC, the SBMC
Subsidiaries or any of the persons listed in Annexes A, B, C or D
hereto beneficially owned any Common Stock at midnight, Eastern
Standard Time, Monday, November 18, 1996.
(c) Neither SBHC nor, to the best knowledge of SBHC,
any of Salomon Inc, SBMC, the SBMC Subsidiaries or the persons
listed in Annexes A, B, C or D hereto made any purchases or sales
of Common Stock from September 19, 1996, through Midnight,
Eastern Standard Time, on November 26, 1996.
(d-e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
------------------------------------------------------
Other than the provisions of the Amended Agreement
described in Item 4, neither SBHC, nor, to the best knowledge of
SBHC, any of Salomon Inc, SBMC, the SBMC Subsidiaries or any of
the persons listed in Annexes A, B, C, or D hereto has any
contracts, arrangements, understandings or relationships (legal
Page 8 of 22 Pages
<PAGE>
or otherwise) with any person with respect to securities of the
Issuer.
Item 7. Material to Be Filed as Exhibits.
--------------------------------
Exhibit 1. Agreement of Purchase and Sale, dated
--------- September 27, 1996, between the SBMC
Subsidiaries, the Issuer and HHPC.
Exhibit 2. Contract Amendment No. 1, dated October
--------- 31, 1996, between the SBMC Subsidiaries,
the Issuer and HHPC.
Exhibit 3. Letter agreement, dated November 15,
--------- 1996, extending the Feasibility Period.
Exhibit 4. Contract Amendment No. 2, dated November
--------- 18, 1996, between the SBMC Subsidiaries,
the Issuer and HHPC.
Exhibit 5. Contract Amendment No. 3, dated November
--------- 27, 1996, between the SBMC Subsidiaries,
the Issuer and HHPC.
Page 9 of 22 Pages
<PAGE>
ANNEXES
-------
A. Executive Officers and Directors of Salomon Inc
B. Executive Officers and Directors of Salomon Brothers Holding
Company Inc
C. Executive Officers and Directors of SB Motel Corp.
D. Executive Officers and Directors of each of the SBMC
Subsidiaries
Page 10 of 22 Pages
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this statement is true, complete and correct.
Dated: November 27, 1996
SALOMON BROTHERS HOLDING COMPANY INC
By /s/ Matthew Levitan
-------------------------------------
Name: Matthew Levitan
Title: Managing Director
Page 11 of 22 Pages
<PAGE>
November 1996
ANNEX A
-------
EXECUTIVE OFFICERS AND DIRECTORS
--------------------------------
OF SALOMON INC
--------------
Principal Occupation
Name and Title and Business Address
- -------------- --------------------
Dwayne O. Andreas Chairman of the Board and
Director Chief Executive
Archer Daniels Midland Company
Box 1470
Decatur, Illinois 62525
Jerome H. Bailey Chief Financial Officer
Chief Financial Officer Salomon Inc
Seven World Trade Center
New York, New York 10048
Chief Financial Officer and
Managing Director
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Warren E. Buffett(1) Chairman and Chief Executive
Director Officer
Berkshire Hathaway Inc.
1440 Kiewit Plaza
Omaha, Nebraska 68131
Richard J. Carbone Controller
Controller Salomon Inc
Seven World Trade Center
New York, New York 10048
Robert E. Denham(1) Director, Chairman and Chief
Director, Chairman and Chief Executive Officer
Executive Officer Salomon Inc
Seven World Trade Center
New York, New York 10048
Dr. Claire M. Fagin Leadership Professor
Director School of Nursing
University of Pennsylvania
Philadelphia, Pennsylvania 19104
<PAGE>
John L. Haseltine Managing Director
Director Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Gedale B. Horowitz Senior Executive Director
Director and Executive Salomon Brothers Holding
Vice President Company Inc
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Thomas W. Jasper Treasurer
Treasurer Salomon Inc
Seven World Trade Center
New York, New York 10048
Treasurer and Managing Director
Salomon Brothers Holding
Company Inc
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Deryck C. Maughan(2) Chairman and Chief Executive
Director and Executive Officer
Vice President Salomon Brothers Holding
Company Inc
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
David O. Maxwell Retired
Director c/o Salomon Inc
Seven World Trade Center
New York, New York 10048
William F. May(1) Chairman and Chief
Director Executive Officer
Statue of Liberty-Ellis
Island Foundation, Inc.
c/o Salomon Inc
Seven World Trade Center
New York, New York 10048
Page 13 of 22 Pages
<PAGE>
Robert H. Mundheim Executive Vice President and
Executive Vice President and General Counsel
General Counsel Salomon Inc
Seven World Trade Center
New York, New York 10048
Charles T. Munger Vice Chairman
Director Berkshire Hathaway Inc.
355 So. Grand Avenue
Los Angeles, California 90071
Shigeru Myojin(3) Vice Chairman
Director Salomon Brothers Inc
Victoria Plaza
111 Buckingham Palace Rd.
London, SW1W OSB, England
Louis A. Simpson(1) Director, President and
Director Chief Executive Officer,
Capital Operations
GEICO Corporation
One Geico Plaza
5260 Western Avenue
Washington, D.C. 20076-0001
Robert G. Zeller(1) Retired
Director c/o Salomon Inc
Seven World Trade Center
New York, New York 10048
Page 14 of 22 Pages
<PAGE>
Citizenship
-----------
Except as footnoted below, each of the individuals listed above
is a citizen of the United States.
(1) Member of the Executive Committee
(2) Citizen of Great Britain
(3) Citizen of Japan
Page 15 of 22 Pages
<PAGE>
November 1996
ANNEX B
-------
EXECUTIVE OFFICERS AND DIRECTORS OF
-----------------------------------
SALOMON BROTHERS HOLDING COMPANY INC
------------------------------------
Principal Occupation
Name and Title and Business Address
- -------------- --------------------
Jerome H. Bailey(1) Chief Financial Officer and
Chief Financial Officer and Managing Director
Managing Director Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Chief Financial Officer
Salomon Inc
Seven World Trade Center
New York, New York 10048
Rodney B. Berens(1) (2) Managing Director
Managing Director Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Thomas W. Brock(1) Chairman and Chief Executive
Managing Director Officer
Salomon Brothers Asset
Management Inc
Seven World Trade Center
New York, New York 10048
Robert E. Denham(3) Director, Chairman and
Managing Director Chief Executive Officer
Salomon Inc
Seven World Trade Center
New York, New York 10048
Eric C. Fast(2) Managing Director
Managing Director Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Page 16 of 22 Pages
<PAGE>
Bruce C. Hackett(1) Managing Director
Managing Director Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
John L. Haseltine(1)(2) Managing Director
Managing Director Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Toshiharu Kajima(1) (4) Chief Executive Officer
Managing Director Salomon Brothers Asia Limited
Akasaka Park Building
2-20, Akasaka 5-chome
Minatu-Ku, Tokyo 107 Japan
Thomas W. Jasper Treasurer and Managing Director
Treasurer and Managing Director
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Deryck C. Maughan(1)(2)(3)(5) Chairman and Chief Executive
Chairman and Chief Executive Officer
Officer Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Kenneth K. Marshall(1) Chief Administrative Officer
Chief Administrative Officer and Managing Director
and Managing Director Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Eduardo G. Mestre(1) (2) Managing Director
Managing Director Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Peter J. Middleton(1) (5) Chief Executive Officer
Managing Director Salomon Brothers International
Limited
Victoria Plaza
111 Buckingham Palace Road
London, SW1B 0SB
England
Page 17 of 22 Pages
<PAGE>
Robert H. Mundheim(1) Secretary and Managing Director
Secretary and Managing Director Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Shigeru Myojin(1) (2) (4) Vice Chairman and Managing
Vice Chairman and Director
Managing Director Salomon Brothers Inc
Salomon Brothers Asia Limited
Akasaka Park Building
2-20, Akasaka 5-chome
Minatu-Ku, Tokyo 107 Japan
Citizenship
-----------
Except as footnoted below, each of the individuals listed
above is a citizen of the United States.
- ----------------------
(1) Member of the Management Board
(2) Member of the Operating Committee
(3) Member of the Board of Directors
(4) Citizen of Japan
(5) Citizen of Great Britain
Page 18 of 22 Pages
<PAGE>
November 1996
ANNEX C
-------
EXECUTIVE OFFICERS AND DIRECTORS
--------------------------------
OF SB MOTEL CORP.
-----------------
Principal Occupation
Name and Title and Business Address
- -------------- --------------------
John P. Buza Vice President
Vice President Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
David C. Fisher Managing Director
Treasurer Salomon Brothers Inc
8800 Hidden River Parkway
Tampa, FL 33637
Matthew Levitan Managing Director
Secretary and Director Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Deryck C. Maughan (1) Chairman and Chief Executive
President and Director Officer
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Saul M. Rosen Managing Director
Assistant Treasurer Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Zachary Snow Managing Director
Director Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Page 19 of 22 Pages
<PAGE>
Jaime H. Taicher Vice President
Assistant Secretary Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Citizenship
-----------
Except as footnoted below, each of the individuals listed above
is a citizen of the United States.
- ---------------------
(1) Citizen of Great Britain
Page 20 of 22 Pages
<PAGE>
November 1996
ANNEX D
-------
EXECUTIVE OFFICERS AND DIRECTORS
--------------------------------
OF EACH OF THE SBMC SUBSIDIARIES
--------------------------------
Principal Occupation
Name and Title and Business Address
- -------------- --------------------
John P. Buza Vice President
Vice President Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
David C. Fisher Managing Director
Treasurer Salomon Brothers Inc
8800 Hidden River Parkway
Tampa, FL 33637
Matthew Levitan Managing Director
Secretary and Director Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Deryck C. Maughan (1) Chairman and Chief Executive
President and Director Officer
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Saul M. Rosen Managing Director
Assistant Treasurer Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Zachary Snow Managing Director
Director Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Page 21 of 22 Pages
<PAGE>
Jaime H. Taicher Vice President
Assistant Secretary Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Citizenship
-----------
Except as footnoted below, each of the individuals listed above
is a citizen of the United States.
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(1) Citizen of Great Britain
Page 22 of 22 Pages
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EXHIBIT 1
[Execution Counterpart]
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE (this
"Agreement"), dated as of the Date of this Agreement (as defined
hereinafter) by and among HUDSON HOTELS PROPERTIES CORP., a New
York corporation with offices at One Airport Way, Suite 200,
Rochester, New York 14624 ("Purchaser"), 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 DURHAM-DUKE CORP.,
SB MOTEL RALEIGH CORP. and SB MOTEL CHARLOTTE I-85 CORP., each a
Delaware corporation with offices at Seven World Trade Center,
New York, New York 10048, Attn: Mr. John P. Buza, Vice President
(collectively, "Sellers"), and Hudson Hotels Corporation, a New
York corporation with offices at One Airport Way, Suite 200,
Rochester, New York 14624 ("Hudson").
W I T N E S S E T H
WHEREAS, Purchaser wishes to purchase, and Sellers
wish to sell, the Premises (as defined below) on the terms and
conditions set forth below; and
WHEREAS, Hudson, which directly or indirectly owns
100% of the stock of Purchaser and will benefit directly from the
transactions contemplated hereby, has agreed to certain
covenants, representations and warranties made by Hudson herein
and to execute the Note (as hereinafter defined) as partial
payment of the Purchase Price (as hereinafter defined).
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
as follows:
Section 1. PROPERTIES. On the terms and subject to all
of the conditions set forth in this Agreement, Purchaser agrees
to purchase and Sellers agree to sell, for the purchase price set
forth herein, any and all of the right, title and interest of
Sellers, respectively, if any, in and to the following property
(collectively, the "Premises"):
(a) a Fairfield Inn limited service hotel located in
Richmond, Virginia, including fee simple title to the land upon
which such limited service hotel is located, as more particularly
described on Exhibit A-1, attached hereto and incorporated herein
<PAGE>
by reference, with all improvements thereon (the "Richmond
Property");
(b) a Fairfield Inn limited service hotel located in
Durham, North Carolina, including fee simple title to the land
upon which such limited service hotel is located, as more
particularly described on Exhibit A-2, attached hereto and
incorporated herein by reference, with all improvements thereon
(the "Durham-Fairfield Property");
(c) a Fairfield Inn limited service hotel located in
Cary, North Carolina, including fee simple title to the land upon
which such limited service hotel is located, as more particularly
described on Exhibit A-3, attached hereto and incorporated herein
by reference, with all improvements thereon (the "Cary
Property");
(d) a Fairfield Inn limited service hotel located in
Statesville, North Carolina, including leasehold title to the
land upon which such limited service hotel is located, as more
particularly described on Exhibit A-4, attached hereto and
incorporated herein by reference (the "Statesville Ground
Lease"), with all improvements thereon (the "Statesville
Property");
(e) a Fairfield Inn limited service hotel located in
Wilmington, North Carolina, including fee simple title to the
land upon which such limited service hotel is located, as more
particularly described on Exhibit A-5, attached hereto and
incorporated herein by reference with all improvements thereon
(the "Wilmington Property");
(f) a Fairfield Inn limited service hotel located in
Columbia, South Carolina, including fee simple title to the land
upon which such limited service hotel is located, as more
particularly described on Exhibit A-6, attached hereto and
incorporated herein by reference, with all improvements thereon
(the "Columbia Property");
(g) a Fairfield Inn limited service hotel located in
Charleston, South Carolina, including fee simple title to the
land upon which such limited service hotel is located, as more
particularly described on Exhibit A-7, attached hereto and
incorporated herein by reference, with all improvements thereon
(the "Charleston Property");
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(h) a Fairfield Inn limited service hotel located in
Albany, Georgia, including fee simple title to the property upon
which such limited service hotel is located, as more particularly
described on Exhibit A-8, attached hereto and incorporated herein
by reference, with all improvements thereon (the "Albany
Property");
(i) a Cricket Inn limited service hotel located in
Virginia Beach, Virginia, including fee simple title to the land
upon which such limited service hotel is located, as more
particularly described on Exhibit A-9, attached hereto and
incorporated herein by reference, with all improvements thereon
(the "Virginia Beach Property");
(j) a Cricket Inn limited service hotel located in
Durham, North Carolina, including fee simple title to the land
upon which such limited service hotel is located, as more
particularly described on Exhibit A-10, attached hereto and
incorporated herein by reference, with all improvements thereon
(the "Durham-Cricket Property");
(k) a Cricket Inn limited service hotel located in
Raleigh, North Carolina, including fee simple title to the land
upon which such limited service hotel is located, as more
particularly described on Exhibit A-ll, attached hereto and
incorporated herein by reference, with all improvements thereon
(the "Raleigh Property");
(l) a Cricket Inn limited service hotel located in
Charlotte, North Carolina, including fee simple title to the land
upon which such limited service hotel is located, as more
particularly described on Exhibit A-12, attached hereto and
incorporated herein by reference, with all improvements thereon
(the "Charlotte Property"; the Richmond Property, the
Durham-Fairfield Property, the Cary Property, the Statesville
Property, the Wilmington Property, the Columbia Property, the
Charleston Property and the Albany Property are herein
collectively referred as the "Fairfield Inn Properties"; the
Virginia Beach Property, the Durham-Cricket Property, the Raleigh
Property and the Charlotte Property are herein collectively
referred to as the "Cricket Inn Properties"; the Fairfield Inn
Properties and the Cricket Inn Properties are herein collectively
referred to as the "Properties"; and each of the limited service
hotels operated on
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the Fairfield Inn Properties or the Cricket Inn Properties is
herein referred to as a "Hotel");
(m) any and all furniture, fixtures, equipment,
machinery, furnishings, carpets, drapes, blinds or mini-blinds,
service and maintenance equipment, linens, tools, signs,
landscaping equipment, supplies, pool equipment, television
systems, keys, passcards, intercom equipment and systems, and
replacement parts, and other tangible and intangible personal
property located on the Properties and owned by any Seller
(collectively, the "Personalty");
(n) all contracts or agreements to which any Seller is
a party and which relate to any of the Properties, including,
without limitation, the Statesville Ground Lease and the
franchise agreements and other contracts referenced in Exhibit B,
attached hereto and by this reference made a part hereof, but
only to the extent same are assignable to Purchaser
(collectively, the "Contracts");
(o) all permits, licenses and certificates of
occupancy held by Sellers in connection with the Hotels, but only
to the extent same are legally assignable to Purchaser (the
"Permits");
(p) all inventory, supplies and other materials used
in connection with the Hotels and the hotel business operated
thereon to the extent owned by Sellers (the "Inventory");
(g) all plans, specifications and "as-built" drawings
and surveys relating to the Properties, to the extent owned by
Sellers, all books and records relating to the operation or
management of the Properties by or on behalf of Sellers, and all
assignable warranties and guaranties of Sellers pertaining to the
Properties; and
(r) all intangible property, guest ledgers, customer
and mailing lists, catalogues and brochures, telephone numbers
and similar property used in connection with the operation of the
Hotels which, in each case, are not owned by any franchisor,
manager or other third party and which are assignable to
Purchaser (the "Intangible Rights");
provided, however, that, notwithstanding the foregoing or any
other provision hereof to the contrary, Sellers do not hereby
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<PAGE>
agree to sell, and the Premises shall not include, any of the
inventory, contracts or property described in Exhibit C, attached
hereto and by this reference made a part hereof.
Section 2. TERMS OF PURCHASE AND SALE. The purchase
price for the Premises shall be Sixty One Million and NO/100
Dollars ($61,000,000.00) (the "Purchase Price"), payable by
Purchaser to Sellers as follows:
2.1. The sum of One Million Four Hundred Fifty
Thousand and NO/100 Dollars ($1,450,000.00) (the "Deposit") shall
be paid by Purchaser on or before Monday, September 30, 1996 by
wire transfer of immediately available funds to an account
designated by Lawyers Title Insurance Corporation, 708 Third
Avenue, New York, NY 10017, as escrow agent ("Escrow Agent").
Escrow Agent shall maintain the Deposit in an interest bearing
account subject to the provisions of Section 13. Escrow Agent
shall not disburse the Deposit except in accordance with the
terms of this Agreement. At the Closing (as hereinafter defined),
the Deposit shall be paid by Escrow Agent to Sellers by wire
transfer of immediately available funds. In the event that this
transaction is not consummated, the Deposit shall be paid as
provided in Sections 8 and 13 of this Agreement. Purchaser shall
be entitled to a credit for any interest earned on the Deposit
unless the Deposit is forfeited, in which event interest shall be
paid to Sellers. If for any reason Escrow Agent does not confirm
its receipt of the Deposit by executing this Agreement on or
before Monday, September 30, 1996, this Agreement shall be
cancelled and shall be deemed null and void, ab initio.
2.2. The balance of the Purchase Price
($59,550,000.00) 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) Hudson shall deliver to Sellers (i) a promissory
note executed by Hudson in the amount of Three
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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) 500,000 shares of the common stock, par value
$0.001, of Hudson (the "Hudson Common Stock") or
(ii) that number of shares of Hudson Common Stock
that is equal to the number determined by dividing
$3,000,000 by the Per Share Market Price (such
number of shares of Hudson 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
500,000 is less than (ii) $3,000,000, and the term "Per Share
Market Price" shall mean the average closing price per share of
Hudson 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).
2.3. The Purchase Price shall be allocated among
Sellers in accordance with Exhibit E hereto.
Section 3. FEASIBILITY PERIOD.
3.1. Purchaser commenced its due diligence
investigation of the Premises on the date of the term sheet
executed by Sellers and Purchaser in connection with the
Premises. Purchaser shall have a period ending October 31, 1996
to review the Inspection Items and to otherwise complete its due
diligence investigation and inspection of the Premises (the
"Feasibility Period"). Purchaser shall have the right to
terminate this Agreement at any time prior to the expiration of
the Feasibility Period, by written notice to Sellers and Escrow
Agent (the "Termination Notice"), if Purchaser is dissatisfied
with any aspect of the Premises in Purchaser's sole discretion.
If Purchaser shall terminate this Agreement pursuant to this
Section
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3.1 on or before the last day of the Feasibility Period, then
Purchaser shall be entitled to a refund of the Deposit. If
Purchaser shall not have provided notice of termination of this
Agreement pursuant to this Section 3.1 during the Feasibility
Period, then from and after the Feasibility Period Purchaser
shall be deemed to have waived its right to terminate this
Agreement as permitted under this Section 3.1 and to accept the
Premises in their present condition. After the Feasibility
Period, Purchaser's and Hudson's obligation to close the
transactions contemplated hereby shall be unconditional, the
Deposit shall be non-refundable, and neither Purchaser nor Hudson
shall have any termination rights hereunder whatsoever (provided
that the foregoing shall not invalidate Purchaser's remedies for
any default by Sellers, as set forth in Section 8).
The term "Inspection Items" shall mean copies of the
following documents, to the extent same are in Sellers'
possession (which shall mean, for all purposes hereunder, to the
extent same are located in the offices of SB Planning and
Management Services, 33rd Floor, Seven World Trade Center, New
York, New York), or, with respect to items (e) and (f) below, to
the extent same are either located at the Hotels or at the
offices of American General Hospitality, Inc., Sellers' manager
for the Hotels ("Manager"):
(a) any title policies, environmental reports and
surveys of or with respect to the Premises;
(b) the Contracts (including the Statesville Ground
Lease and the Franchise Agreements, as defined
below);
(c) financial statements (the "Financial Statements")
for the Hotels prepared and certified by Sellers
(including balance sheets, income statements and
statements of changes in financial condition) for
calendar years 1994 and 1995 for the first and
second calendar quarters of 1996, together with an
itemized breakdown of room sales per month,
occupancy and ADR for such periods;
(d) audited financial statements (the "Audited
Financials") prepared and certified by the firm of
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Coopers & Lybrand, copies of which have been
provided to Purchaser;
(e) any guest registration records, operating
permits, certificates of occupancy, municipal
approvals and other governmental permits and
copies of Contracts copies of which have not
previously been delivered to Purchaser, which in
all such cases, are kept at the Hotels; and
(f) any books and records of the operations of the
Premises necessary to confirm the accuracy of the
Financial Statements and the Audited Financials,
which in all such cases are kept at the Hotels or
at the offices of Manager.
Within four (4) Business Days of Purchaser's request therefor,
Sellers shall make available for inspection at one or more of the
Hotels or at their offices in New York any Inspection Items
described in clauses (e) and (f) above which are located at
Manager's offices.
Except for the representations and warranties set
forth in Section 12.3 (to the extent applicable), Sellers make no
representations or warranties as to the accuracy or completeness
of any of the foregoing Inspection Items or other materials
provided or made available to Purchaser, and Purchaser's sole
remedy for any such inaccuracy or lack of completeness shall be
to terminate this Agreement during the Feasibility Period.
3.2. (a) 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; provided, however, that
notwithstanding the foregoing, if (i) Purchaser certifies in the
Termination Notice that (x) its termination of this Agreement is
based solely upon a material defect in or problem with the
Premises which has been uncovered by Purchaser and was either
unknown to Purchaser prior to the Date of this Agreement or the
materiality or consequences of which were not understood by
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<PAGE>
Purchaser prior to the Date of this Agreement, and which is
described with specificity in the Termination Notice, and (y)
that it has obtained financing for this transaction and is not
terminating this Agreement because of an inability to obtain a
commitment from a lender willing to finance this transaction, and
(ii) Sellers do not provide notice to Escrow Agent that they wish
to dispute the matters set forth in clause (i) of this sentence,
then such $50,000 portion of the Deposit shall be refunded by
Escrow Agent to Purchaser. For purposes of the immediately
preceding sentence, the term "material defect in or problem with
the Premises" shall mean: (i) any defect or problem with the
Premises which prevents Purchaser from obtaining financing for
this transaction from prospective lenders; (ii) the failure of
the franchisor of the Premises currently operated as Fairfield
Inns to execute and deliver to Purchaser an estoppel and comfort
letter in the form contemplated by this Agreement; or (iii) the
failure of the franchisor of the Premises currently operated as
Cricket Inns to execute and deliver to Purchaser an estoppel and
comfort letter in the form contemplated by this Agreement.
3.3. Whether or not Purchaser terminates this
Agreement as permitted pursuant to Section 3.1 hereof the
non-refundable $50,000 fee paid by Purchaser to Sellers on or
about August 12, 1996, upon execution of the term sheet in
connection with this transaction, shall be non-refundable and
fully earned by Sellers, provided that if the Closing takes
place, the non-refundable $50,000 fee shall be applied as a
credit against the Purchase Price in accordance with Section 2.2
hereof.
3.4. At least 15 days prior to the expiration of the
Feasibility Period, Sellers shall, after consultation with
Purchaser, prepare and provide to Purchaser a schedule setting
forth all material damages to the Wilmington Property and the
Raleigh Property resulting from Hurricane Fran on or about
September 5, 1996, and corresponding cost estimates for their
repair (such schedule shall be referred to herein as the "Fran
Damage Schedule"). Sellers shall, at their option, either (a)
make any or all repairs with respect to the damage represented in
the Fran Damage Schedule prior to the Closing Date, or (b) credit
Purchaser at Closing with the cost of such repairs set forth on
the Fran Damage Schedule, to the extent such repairs have not
been completed prior to the Closing Date. In the event that
Sellers elect to make any repairs with respect to the damage
represented in the Fran Damage Schedule pursuant to this Section
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3.4, Sellers agree to provide Purchaser with copies of all
documentation relating to the same, including evidence of lien
free completion, and to assign all related warranties and
guaranties to the extent assignable to Purchaser at Closing.
3.5. During the Feasibility Period, Sellers shall use
good faith efforts (which shall not include the expenditure of
any funds or the making of any changes, alterations or
improvements at any Premises or otherwise) to obtain estoppel and
comfort letters from the two franchisors under the franchise
agreements described in Exhibit B hereto (the "Franchise
Agreements") in a form reasonably satisfactory to Purchaser's
prospective lender. A proposed form of such estoppel and comfort
letter shall be provided to Sellers by Purchaser within 10
Business Days from the Date of this Agreement. Except as provided
in this Section 3.5, Purchaser shall pay any and all fees or.
other costs or expenses incurred directly or indirectly in
connection with such franchisors' execution and delivery to
Purchaser of such estoppel and comfort letters. If Sellers fail
to obtain such estoppel and comfort letters from such
franchisors, then Purchaser's sole remedy shall be to terminate
this Agreement during the Feasibility Period in accordance with
Section 3.1 hereof and receive a full refund of its Deposit.
After the Feasibility Period Purchaser shall be deemed to have
waived the applicability of the foregoing provisions of this
Section 3.5, provided that, if the aforesaid estoppel
certificates are obtained during the Feasibility Period, Sellers
shall, if so requested by Purchaser, in good faith request of the
relevant franchisors a second estoppel certificate (in the same
form as the first) dated as of a date within 15 days of the
Closing Date. Except as provided above, Purchaser shall be
responsible for obtaining any and all consents or approvals
required to be obtained from the franchisors under the Franchise
Agreements in connection with the sale of the Premises to
Purchaser and the assignment to and assumption by Purchaser of
the Franchise Agreements as contemplated hereby. Purchaser shall
provide to Sellers evidence of its having obtained any such
required consents or approvals at or prior to the expiration of
the Feasibility Period. The transfer fees provided for in Section
3 of Addendum Two to each of the Franchise Agreements applicable
to the Fairfield Inn Properties (the "Fairfield Franchise
Agreements"), which are required to be paid under the Franchise
Agreements in connection with the assignment and assumption of
the Franchise Agreements or the sale of Premises
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pursuant to this Agreement shall be paid by Sellers to the
relevant franchisor(s) at or prior to the Closing (the "Addendum
Two Transfer Fee"), and any other transfer fees, costs and
expenses, if any, required to be paid under the Franchise
Agreements in connection with the transactions contemplated
hereby shall be paid by Purchaser to the relevant franchisor(s)
at or prior to the Closing. Sellers shall cooperate with
Purchaser in its dealings with the franchisors under the
Franchise Agreements which are required pursuant to this Section
3.5. In the event that the transactions contemplated hereby
result in a default or termination of any Franchise Agreement,
then from and after the Closing Date Purchaser shall be solely
responsible and liable for all related costs, expenses, fees and
damages and shall fully indemnify Sellers against same.
Purchaser's foregoing obligations shall survive the Closing.
3.6. Sellers and Purchaser shall cooperate and take
all actions necessary, in a diligent and expeditious manner, to
effectuate the inspections and reviews contemplated by this
Section 3 during the Feasibility Period. Purchaser and its
representatives and agents shall be provided with access to the
Premises at all reasonable times (subject to the notice to
Sellers required hereinafter), in order to inspect the Premises,
including but not limited to, taking soil samples and test
borings (upon receipt of prior written consent from Sellers as
set forth hereinafter) and conducting environmental studies,
engineering studies and other such inspections and reviews that
Purchaser shall deem reasonably necessary to determine the
condition and financial status of the Premises. Purchaser shall
not make any borings or holes in any part of the Premises or
otherwise damage any part of the Premises in any manner or to any
extent unless prior written consent is given by Sellers thereto,
which consent shall not be unreasonably withheld, and provided,
further, that Sellers may prohibit any boring that might void any
roof warranty and that all borings, holes, or other damage shall
be repaired promptly by Purchaser.
3.7. In the event that the transaction contemplated by
this Agreement does not close for any reason, Purchaser shall
have the obligation to remediate any damage caused by Purchaser
or its representatives or agents to the Premises and to restore
the Premises to their condition prior to Purchaser's damage,
which obligation shall survive any termination of this Agreement.
The terms of this Agreement and all information furnished by
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Sellers to Purchaser in accordance with the provisions of this
Agreement or obtained by Purchaser in the course of its
investigations shall be treated as confidential information by
Purchaser, except as such disclosure may be required by
applicable state or federal environmental laws and except that
Purchaser may disclose such information to prospective investors
and lenders, as well as attorneys and other parties assisting or
representing Purchaser in connection with the subject
transaction, provided, however, that nothing herein shall
restrict or impair any disclosures which Purchaser may be
required to make by virtue of rules and regulations of the
Securities and Exchange Commission (the "SEC") applicable to
Purchaser, if any. The foregoing obligation to treat such
information as confidential shall survive any termination of this
Agreement but shall not survive Closing.
3.8. Purchaser covenants and agrees that the Premises
shall not be damaged or impaired in any way as the result of its
aforesaid activities on the Premises, and hereby agrees to
indemnify and hold Sellers harmless from and against any claims,
causes of action, damages, expenses (including attorneys' fees)
or liabilities of whatsoever nature to the extent incident to,
resulting from or in any way arising out of the presence in, on
or about the Premises of Purchaser, or Purchaser's agents or
representatives, or out of any test or inspection conducted by or
any other act or omission of Purchaser on the Premises. Such
indemnity shall survive the Closing or any termination of this
Agreement.
3.9. Purchaser shall make all inspections provided for
herein in good faith and with due diligence. All inspection fees,
appraisal fees, engineering fees and other expenses of any kind
(including, without limitation, expenses related to environmental
and engineering studies) incurred by Purchaser relating to the
inspection of the Premises will be solely Purchaser's expenses
and will be paid timely by Purchaser, except that Purchaser shall
not become liable solely by virtue of this sentence for
remediation costs relating to Hazardous Materials (as defined
below) discovered by Purchaser on any Property as long as
Purchaser did not and does not cause, accelerate or increase, in
whole or in part, directly or indirectly, the need or extent of
the required remediation. Sellers hereby reserve the right to
have a representative present at the time of making any such
inspection. Purchaser shall cause any and all surveys,
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engineering reports, environmental reports, feasibility studies,
title reports, audits and other tests, studies or reports
prepared for or obtained by Purchaser in connection with the
Premises (collectively, the "Purchaser Reports") to be certified
to Sellers as well as to Purchaser and Purchaser shall deliver a
copy of each such report to Sellers promptly after receipt
thereof. In making any inspection hereunder, Purchaser will, and
will cause any representative of Purchaser to, use discretion so
as to not disrupt any guest, tenant or customer of the Premises.
Purchaser shall notify Sellers not less than one (1) Business Day
in advance of making any such inspection.
3.10. If Purchaser shall validly terminate this
Agreement during the Feasibility Period pursuant to this Section
3, or if the Closing shall otherwise fail to occur, Purchaser
shall return to Sellers the originals and all copies of all
material relating to the Premises furnished to Purchaser pursuant
to this Agreement and shall not make or retain any copies thereof
and shall also deliver to Sellers the originals and all copies of
the Purchaser Reports, together with an absolute assignment of
all Purchaser's right, title and interest therein, and Purchaser
shall not make or retain any copies thereof.
3.11. Prior to the expiration of the Feasibility
Period, the Seller which holds leasehold title to the Statesville
Property shall use reasonable efforts (which shall not include
the expenditure of any funds or the making of any changes,
alterations or improvements at the Statesville Property or
otherwise) to obtain from the ground lessor under the Statesville
Ground Lease and to deliver to Purchaser an estoppel certificate
(a) in the form provided for in Article XV of the Statesville
Ground Lease with the addition of an acknowledgment of the lack
of necessity for approval of the proposed assignment of the
Statesville Ground Lease as contemplated hereby; or (b) in such
other form as may be required by Purchaser's prospective lender
for the acquisition contemplated hereby and which shall be
provided to Sellers within 10 Business Days after the Date of
this Agreement. If such Seller fails to obtain such an estoppel
certificate, Purchaser's sole remedy shall be to terminate this
Agreement during the Feasibility Period in accordance with
Section 3.1 hereof. After the Feasibility Period Purchaser shall
be deemed to have waived the applicability of this Section 3.11,
provided that, if the aforesaid estoppel certificate is obtained
during the Feasibility Period, the relevant Seller shall, if so
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requested by Purchaser, in good faith request of the ground
lessor a second estoppel certificate (in the same form as the
first) dated as of a date within 15 days of the Closing Date.
3.12. Purchaser shall provide to Sellers, at least
five (5) Business Days prior to the expiration of the Feasibility
Period, evidence of Purchaser's unconditional ability to finance
the acquisition of the Premises and the payment of the Purchase
Price pursuant to Section 2.2 of this Agreement. Sellers agree
that for purposes hereof, a comfort letter from Purchaser's
prospective lender which provides reasonable assurances as to the
availability of financing shall constitute evidence of
Purchaser's unconditional ability to finance the acquisition of
the Premises and the payment of the Purchase Price.
3.13. If this Agreement is terminated pursuant to this
Section 3 and the Deposit is disbursed as set forth in this
Section 3 and in Section 13, then, except as specifically set
forth in this Agreement, neither party shall have any further
obligations or liabilities hereunder.
Section 4. TITLE AND SURVEY.
4.1. Purchaser shall obtain, at its sole cost and
expense a title report and survey for each of the Properties from
a national title insurance company. At least five (5) days prior
to the expiration of the Feasibility Period, Purchaser shall
deliver copies of such title reports and surveys to Sellers and
notify (the "Title Notice") Sellers which, if any, of the liens,
defects, encumbrances or other matters disclosed thereby are
objectionable to Purchaser (the "Title Defects"). Within two (2)
Business Days after receipt by Sellers of the Title Notice,
Sellers shall notify Purchaser if Sellers are willing and able to
cure any of the Title Defects (the "Cure Notice"). All title
defects, encumbrances and other matters which are a matter of
public record on or before the expiration of the Feasibility
Period or which are otherwise disclosed by Purchaser's title
reports or surveys for the Properties, except for Title Defects
which are objected to by Purchaser and which Sellers agree to
cure in the Cure Notice, shall be deemed "Permitted Exceptions"
which Purchaser shall take title subject to. Sellers shall have
no obligation to cure any Title Defects, except for mortgages,
mechanics liens, monetary judgments or delinquent real estate
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taxes, which Sellers agree to bond or pay off at or prior to the
Closing. In the event Sellers are unable or unwilling to cure any
Title Defects which are material to the Properties, taken as a
whole, then Purchaser shall have the right, as its sole remedy,
to terminate this Agreement pursuant to Section 3.1 hereof prior
to the expiration of the Feasibility Period. After the
Feasibility Period, Purchaser shall be deemed to have waived its
rights under this Section 4.1 and to have accepted the quality
and condition of title to the Premises subject only to the
Permitted Exceptions.
Section 5. CLOSING.
5.1. The closing of this transaction (the "Closing")
shall occur on November 27, 1996 or on such sooner date as the
parties may agree upon in writing (as the case may be, the
"Closing Date") at 10:00 a.m. at the offices of Sellers' counsel,
Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York,
New York 10019.
5.2. At the Closing, Sellers shall deliver to Purchaser
the following:
(a) Special or limited warranty deeds conveying fee
simple title to each of the Properties other than
the Statesville Property, and an assignment of
the Statesville Ground Lease and all of Sellers'
other interests in the Statesville Property
subject only to the Permitted Exceptions;
(b) Bills of sale conveying the Personalty and
Inventory, containing special or limited
warranties of title (but no warranties of any
other kind);
(c) An assignment of Sellers' interests in and to all
Contracts, Permits, Intangible Rights and
warranties and guarantees relating to the
condition of the Premises (in each case, to the
extent legally assignable), without any
representations or warranties contained therein;
(d) Originals of the Contracts and Permits, to the
extent in Sellers' Possession;
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(e) A certificate of Sellers dated as of the Closing
that Sellers are not foreign persons or
corporations within the meaning of Sections 1445
and 7701 of the Internal Revenue Code (the
"IRC");
(f) An affidavit of title reasonably satisfactory to
Purchaser's title insurance company to enable
such title insurance company to issue to
Purchaser a title insurance policy for the
Properties without exception for mechanics' or
materialmens' or other statutory liens or for the
rights of parties in possession other than
temporary hotel patrons;
(g) Evidence of Sellers' due formation, good standing
in Delaware, qualification to do business in the
respective States in which Sellers do business,
and authority to consummate the transactions
contemplated hereby;
(h) Originals of documents included in the definition
of "Intangible Rights", to the extent in Sellers'
possession;
(i) An estoppel certificate from the ground lessor
under the Statesville Ground Lease, if obtained
pursuant to Section 3.11;
(j) Estoppel and comfort letters from the franchisors
under the Franchise Agreements, if obtained
pursuant to Section 3.5; and
(k) Such other instruments as are customarily
executed by Sellers to effectuate the sale of
property similar to the Premises, provided that
this subpart (k) shall not require Sellers to
incur expenses, liabilities or obligations in
excess of those provided for elsewhere in this
Agreement.
At the Closing, Sellers shall also bond or pay off any mortgages,
mechanics' liens, monetary judgments or delinquent real estate
taxes which encumber any Property. None of Sellers' conveyance
documents shall have general warranties of title or any other
representations or warranties except as specifically provided
above.
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5.3. At the Closing, Purchaser shall deliver to Sellers
the following:
(a) The sum of Fifty-Three Million Five Hundred
Thousand and NO/100 Dollars ($53,500,000), plus
the Stock Price Adjustment Amount, if any (and
Purchaser shall also cause Escrow Agent to
deliver to Sellers the Escrow Deposit);
(b) Certificates (bearing a restrictive legend, which
legend Hudson shall remove following registration
of the Shares as contemplated under Section 15.3)
representing the Shares, free and clear of all
liens, with all necessary share transfer and
other documentary stamps attached;
(c) Evidence of Purchaser's due formation, good
standing in New York, qualification to do
business in each state in which it does business,
and authority to consummate the transactions
contemplated hereby;
(d) An assumption agreement pursuant to which
Purchaser will assume all obligations of Sellers
under or in connection with the Contracts,
Permits and Intangible Rights and will agree to
cooperate with Sellers to cause Sellers to be
released from any future obligations or
liabilities under the Contracts;
(e) Evidence that Purchaser has performed all of its
obligations under Section 3.5, including, without
limitation, that Purchaser has paid all fees,
costs and expenses and obtained all consents and
approvals required to be paid or obtained by
Purchaser under Section 3.5;
(f) Such other instruments as are customarily
executed by purchasers to effectuate the purchase
of property similar to the Premises, provided
that this subpart (f) shall not require Purchaser
to incur expenses, liabilities or obligations in
excess of those provided elsewhere in this
Agreement.
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5.4. At the Closing, Hudson shall deliver to Sellers
the following:
(a) The Note (naming Sellers or any designee of
Sellers as the payee);
(b) An opinion of Hudson's counsel with respect to (i)
the validity and enforceability of the Note, (ii)
the valid issuance and due authorization of the
Shares (which shall further include that the
Shares have been fully paid, are nonassessable and
are free and clear of all security interests and
other encumbrances), (iii) if Sellers so elect
pursuant to Section 15.7, the due authorization of
the board of directors of Hudson with respect to
the placement of the Sellers Nominee on Hudson's
board of directors, (iv) Hudson's authority to
enter into the Note and issue the Shares, and (v)
other customary matters relating to the Shares and
the Note (which opinion shall be customary in form
and substance and shall be reasonably acceptable
to Sellers);
(c) If Sellers so elect pursuant to Section 15.7 to
place a Sellers nominee on Hudson's board of
directors immediately following Closing, evidence
satisfactory to Sellers that the board of
directors of Hudson shall have adopted a resolu-
tion authorizing the placement of the Sellers
Nominee (as defined hereinafter) on the board of
directors of Hudson in accordance with the terms
of Section 15.7 hereof, and approving any neces-
sary expansion of the number of directors con-
stituting such board of directors, all in ac-
cordance with the requirements of any corporate
charter, certificate of incorporation or bylaws of
Hudson;
(d) Evidence of Hudson's due formation, good standing
in New York, qualification to do business in each
state in which Hudson does business, and
authority to consummate the transactions
contemplated hereby; and
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(e) Such other instruments as are customarily
executed in similar transactions, provided that
this subpart (e) shall not require Hudson to
incur expenses, liabilities or obligations in
excess of those provided elsewhere in this
Agreement.
Sellers and Hudson agree to negotiate in good faith and attempt
to reach agreement as to the form of the opinion referred to in
Section 5.4(b) above prior to the expiration of the Feasibility
Period.
5.5. At the Closing, Purchaser shall, and does hereby,
assume all obligations of Sellers pursuant to the Contracts,
including the Statesville Ground Lease and the Franchise
Agreements. Purchaser will cooperate with Sellers in all respects
to cause Sellers to be released from any future obligations or
liabilities under any Contract. The parties shall enter into an
assignment and assumption agreement at the Closing in respect of
the Contracts (the "Assignment and Assumption Agreement") which
shall contain reciprocal indemnities pursuant to which Sellers
shall indemnify Purchaser against liabilities arising under the
Contracts prior to the Closing and Purchaser shall indemnify
Sellers against liabilities arising under the Contracts after the
Closing. Notwithstanding the foregoing, Purchaser shall not
assume liability for any employees of Sellers or any other
persons who otherwise worked at any Property prior to the
Closing, and the Assignment and Assumption Agreement shall
expressly exclude such liability.
5.6. Purchaser shall pay all costs and expenses
associated with obtaining any title commitments, title policies,
title insurance, surveys, environmental reports and other due
diligence reports with respect to the Premises. At the Closing,
Purchaser and Sellers shall each pay fifty (50%) percent of all
transfer taxes, conveyance fees, documentary stamps, and other
similar taxes and charges imposed by any governmental authority
in connection with the conveyance of the Premises to Purchaser.
Purchaser shall pay all expenses in connection with the issuance
of the Shares. Purchaser shall pay any recording fees relating to
the deeds and other instruments of conveyance and any mortgage or
deed of trust recording taxes or fees in connection with any
financing obtained by Purchaser. Sellers shall pay all accounting
and other fees associated with the preparation and delivery of
the Audited Financials. Each party shall be
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responsible for its own attorneys' fees and other professional
fees. Except as otherwise provided herein or elsewhere in this
Agreement, all other costs associated with the Closing will be
borne by Purchaser.
Section 6. DELIVERY OF POSSESSION. Sellers shall
deliver actual and exclusive possession of the Properties to
Purchaser on the Closing Date.
Section 7. CASUALTY AND CONDEMNATION.
7.1. If, prior to the Closing, any Material Portion
(as defined below) of any Hotel shall be destroyed by one or more
incidents of fire or other casualty, Sellers shall, promptly
after learning of same, give Purchaser notice of such occurrence,
and Purchaser shall, within ten (10) days after receipt of such
notice, elect either (a) to exclude such Hotel from the Premises
to be sold and purchased under this Agreement, in which event the
Purchase Price shall be reduced by the Purchase Price Reduction
Amount (as defined below) and such Hotel and all related property
shall be excluded from this transaction and retained by the
applicable Seller, or (b) to acquire such Hotel along with the
remainder of the Premises without any adjustment to the Purchase
Price and close the transaction contemplated hereby as scheduled,
in which event Purchaser shall have the right to participate in
the adjustment and settlement of any insurance claim relating to
such damage, and Sellers shall assign and/or pay to Purchaser at
the Closing all insurance proceeds collected or claimed with
respect to said damage. If Purchaser does not make any election
within said ten (10) day period, or if the fire or other casualty
does not result in a loss of a Material Portion of any Hotel,
Purchaser shall be deemed to have elected to close this
transaction as provided in (b) above. The term "Material Portion"
means any portion having a value in excess of $5 million. The
term "Purchase Price Reduction Amount" shall mean, with respect
to any Hotel which is excluded from the Premises to be sold and
purchased hereunder pursuant to this Section 7.1, or pursuant to
Section 7.2 below, the portion of the Purchase Price allocable to
such Hotel pursuant to Exhibit E.
7.2. If, prior to the Closing, any proceeding (judi-
cial, administrative or otherwise) which shall relate to the
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proposed taking of a Material Portion of any Hotel by
condemnation or eminent domain or any action in the nature of
eminent domain, is commenced, Sellers shall promptly after
learning of same give Purchaser notice of such occurrence and
Purchaser shall, within ten (10) days after receipt of such
notice, elect either (a) to exclude such Hotel from the Premises
to be sold and purchased pursuant to this Agreement, in which
event the Purchase Price shall be reduced by the Purchase Price
Reduction Amount and such Hotel and all related property shall be
excluded from this transaction and retained by the applicable
Seller or (b) to acquire such Hotel along with the remainder of
the Premises without any adjustment to the Purchase Price and
close the transaction contemplated hereby as scheduled, in which
event Purchaser shall have the right to participate in the
proceedings affecting such Hotel and the entire award from such
proceedings shall be paid or assigned to Purchaser at the
Closing. If Purchaser does not make any election within said ten
(10) day period, or if the proposed taking does not result in a
loss of a Material Portion of any Hotel, Purchaser shall be
deemed to have elected to close this transaction as provided in
(b) above.
Section 8. REMEDIES.
8.1. If this transaction fails to close by reason of
Purchaser's or Hudson's failure to perform its obligations under
this Agreement, and such failure is not cured within five (5)
days after notice thereof from Sellers to Purchaser, then the
Deposit shall be paid by Escrow Agent to, and shall be retained
by, Sellers as full liquidated damages, the parties hereby
acknowledging and agreeing that the amount of Sellers' actual
damages in such circumstances would be difficult, if not
impossible, to determine. Sellers shall have no obligation to
close the transactions contemplated hereby if either Hudson or
Purchaser shall fail to perform or shall be in breach of its
obligations hereunder. It shall be a condition to Sellers'
obligation to close hereunder that no material adverse change
shall have occurred in the condition, financial results or
operations of Hudson or Purchaser after the Date of this
Agreement.
8.2. If this transaction fails to close by reason of
Sellers' failure to perform their obligations under this
Agreement and such failure is not cured within five (5) days
after notice thereof from Purchaser to Sellers, then Purchaser
shall be permitted to seek specific performance as its sole
remedy,
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<PAGE>
provided that if Sellers are unable or unwilling to convey the
Premises to Purchaser at Closing in accordance with Section 5.2
then Purchaser shall also be permitted, as an alternative to
seeking specific performance, to terminate this Agreement and
obtain a refund of the Deposit as its sole remedy. Purchaser's
remedies for breach shall be limited to those specified in the
immediately preceding sentence.
Section 9. PRORATIONS. All income (excluding cash on
hand and accounts receivable, which shall be and remain the
property of Sellers), current operating expenses, association or
trade group dues, accounts payable, real estate taxes, other
taxes and assessments, all utilities, water and sewer charges,
transferable license or permit fees, real estate and personal
property ad valorem taxes (provided that, personal property ad
valorem taxes shall not be prorated to the extent that Purchaser
provides to Sellers evidence prior to the expiration of the
Feasibility Period that local law where any of the Hotels are
located would require Purchaser to pay such taxes that have
already been paid by or on behalf of the respective Seller),
phone bills, office bills, prepayments made under the Contracts
and other income and expenses from or relating in each case to
the Premises shall be adjusted and prorated as of the Closing,
with Purchaser being entitled to all income and responsible for
all expenses accruing after the Closing and Sellers being
entitled to all income and responsible for all expenses accruing
prior to the Closing. Sellers shall provide Purchaser with a list
of all contracts subject to prorations for Purchaser's review at
least two (2) weeks prior to Closing. Sellers and Purchaser agree
that inventories at any of the Hotels shall not be prorated. If
any items of income or expense are unascertainable on the Closing
Date, a readjustment of such charges and expenses shall be made
within sixty (60) days after the Closing or, in the case of
property taxes for which tax bills are not yet available,
promptly after such tax bills become available. The parties agree
to cooperate in good faith in effecting such a final
reconciliation and each party shall promptly pay (or reimburse
the other party for) any expense item that is chargeable to the
former party and shall promptly remit any income item to the
other party if the other is entitled thereto. Sellers shall use
reasonable efforts to arrange for the rendition of final bills by
the utility companies involved as of the Closing Date. Sellers
shall use reasonable efforts to provide Purchaser with
accountings for vending machines and
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<PAGE>
commissions as of the Closing Date. Sellers shall credit
Purchaser with the cost of repairs that have not been completed
as of Closing with respect to damage caused by Hurricane Fran as
set forth on the Fran Damage Schedule, as more fully set forth in
Section 3.4.
Guest room revenues of the Premises, whether in cash
or in accounts receivable, arising from occupancy for the night
beginning on the day preceding the Closing Date, including any
tax thereon, but exclusive of food, beverage, telephone and
similar charges (which shall be retained by Sellers), shall be
credited one-half to Purchaser and one-half to Sellers. Sellers
shall collect all income and other sums payable by tenants or
guests (or otherwise) and shall be responsible for the payment of
all expenses on account of services and supplies furnished to and
for the benefit of the Premises through the Closing. Purchaser
shall purchase and Sellers shall be credited for guest ledger
receivables and for any and all cash that is in the cash drawer
of each of the Hotels on the Closing Date. On the Closing Date,
Sellers will not remove any other house funds or petty cash from
the Premises until Purchaser is ready to start its operations.
Purchaser shall be credited with all deposits from tenants or
guests of the Premises (whether refundable or not) which relate
to post-Closing services. Sellers shall remit to Purchaser at
Closing all prepaid room charges for nights after the Closing
Date. In addition, at Closing, Sellers shall deliver to Purchaser
a schedule of all unpaid accounts receivable and other unpaid
income items as of Closing. All such accounts receivable and
other income items paid to and collected by Purchaser after
Closing shall be promptly remitted to the order of Sellers.
Except for sums actually received by Purchaser pursuant to the
immediately preceding sentence, Purchaser shall assume no
obligation to collect or enforce the payment of any amounts that
may be due to Sellers, except that Purchaser shall render
reasonable assistance, at no expense to Purchaser, to Sellers
after Closing in the event Sellers proceed against any third
party to collect any accounts receivable or other income items
due Sellers. Purchaser shall have the right to pursue collection
of such items after the Closing without Sellers' consent or
involvement.
In the event any adjustments pursuant to this Section
9 are, within one (l) year subsequent to Closing, found to be
erroneous, then if either party hereto is entitled to additional
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<PAGE>
monies and shall invoice the other party for such additional
amounts as may be owing, such amounts shall be paid promptly by
the other party upon receipt of the invoice. Such invoice shall
be accompanied by reasonable substantiating evidence.
The provisions of this Section 9 shall survive the
Closing.
Section 10. NOTICES. Any notice to be given by either
Sellers or Purchaser shall be in writing and shall be either
delivered personally or by certified or registered U.S. Mail,
postage prepaid, or by overnight courier delivery service with
charges to the sender, as follows:
To Sellers: 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 Durham-Duke Corp.
SB Motel Raleigh Corp.
SB Motel Charlotte 1-85 Corp.
Seven World Trade Center, 33rd Floor
New York, New York 10048
Attn: John P. Buza, Vice President
With copies to: Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attn: Robin Panovka
To Purchaser: Hudson Hotels Properties Corp.
One Airport Way, Suite 200
Rochester International Airport
Rochester, NY 14624
Attn.: E. Anthony Wilson, Chairman
With copies to: Boylan, Brown, Code, Fowler, Vigdor
& Wilson, LLP
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<PAGE>
2400 Chase Square
Rochester, NY 14604
Attn: Stephens M. Fowler
To Hudson: Hudson Hotels Corporation
One Airport Way, Suite 200
Rochester International Airport
Rochester, NY 14624
Attn: E. Anthony Wilson, Chairman
With copies to: Boylan, Brown, Code, Fowler, Vigdor
& Wilson, LLP
2400 Chase Square
Rochester, NY 14604
Attn: Stephens M. Fowler
To Escrow Agent: Lawyers Title Insurance Corporation
708 Third Avenue
New York, NY 10017
Attention: Stephanie Butler
Any notice, demand or other communication shall be deemed given
and effective as of the date of delivery in person or by receipt
set forth on the verification of delivery or return receipt. The
inability to deliver because of a changed address of which no
notice was given, or rejection or other refusal to accept any
notice, demand or other communication, shall be deemed to be
receipt of the notice, demand or other communication as of the
date of such attempt to transmit or deliver or rejection or
refusal to accept. Any party may change addresses for notices by
delivering written notice of such change in accordance with this
Section 10.
Section 11. BROKERAGE COMMISSIONS. Purchaser, Hudson
and Sellers each represent and warrant to the other that such
party has not dealt with or employed any broker or agent in
connection with this transaction and that, to such party's
knowledge, no commission or finder's fee will be owing to any
third party in connection with this transaction. Sellers agree
to, and hereby do, indemnify and save harmless Purchaser and its
affiliates and their respective successors and assigns from and
against any loss, liability or expense, including reasonable
attorneys' fees, arising out of any claim or claims for
commissions or other compensation for bringing about this
25
<PAGE>
Agreement or the transactions contemplated hereby made by any
broker, finder, consultant or like agent if such claim or claims
made by any such broker, finder, consultant or like agent are
based in whole or in part on any agreements or understandings
entered into with Sellers or their representatives for a
commission or other compensation. Purchaser and Hudson agree to,
and hereby do, indemnify and save harmless Sellers and their
affiliates and respective successors and assigns against and from
any loss, liability or expense, including reasonable attorneys'
fees, arising out of any claim or claims for commission or other
compensation for bringing about this Agreement or the
transactions contemplated hereby made by any broker, finder,
consultant or like agent if such claim or claims made by any such
broker, finder, consultant or like agent are based on any
agreements or understandings entered into with Purchaser or its
representatives for commissions or other compensation. The
indemnities set forth in this Section 11 shall survive the
Closing.
Section 12. REPRESENTATIONS AND WARRANTIES.
12.1. Purchaser represents and warrants to Sellers
that:
(a) Purchaser is, and as of the Closing shall be, a
corporation duly organized, validly existing and
in good standing under the laws of the State of
New York, and has and as of the Closing shall have
all requisite power to enter into and perform its
obligations under this Agreement and under any
other document or instrument required to be
executed and delivered on behalf of Purchaser
hereunder.
(b) Purchaser is, and as of the Closing shall be,
authorized to enter into this Agreement and to
consummate the transactions contemplated hereby,
and the individuals executing this Agreement on
behalf of Purchaser are also duly authorized to
execute this Agreement and to bind Purchaser to
consummate such transactions. The execution of
this Agreement by Purchaser shall, within five
(5) Business Days of the Date of this Agreement,
be duly authorized by proper corporate action,
including by resolution of the board of directors
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<PAGE>
of Purchaser. If evidence of such due
authorization is not provided to Sellers within
such period referenced above, Sellers shall have
the right to terminate this Agreement.
(c) Purchaser is not nor as of Closing shall be a
foreign entity, foreign corporation, foreign
partnership, foreign trust or foreign estate (as
those terms are defined in the Internal Revenue
Code and Income Tax regulations).
(d) Neither the entry into nor compliance with this
Agreement by Purchaser has resulted, or as of
Closing will result, in any violation of, or
default under, or result in the acceleration of,
any obligation under any existing corporate
charter, certificate of incorporation or bylaws
of Purchaser.
(e) There is no action, suit or proceeding, pending
or, to Purchaser's knowledge, threatened, against
Purchaser in any court or before any arbitrator or
before any governmental body which (a) in any
manner raises any question affecting the validity
or enforceability of this Agreement or any other
agreement or instrument required hereunder to be
entered into by Purchaser or (b) could materially
and adversely affect the ability of Purchaser to
perform its obligations hereunder.
(f) Except as contemplated hereby, neither the
execution and delivery by Purchaser hereof nor
the consummation by Purchaser of the transactions
contemplated hereby in accordance with the terms
hereof, will require any consent, approval or
authorization of, or declaration, filing or
registration with, any government authority.
(g) To Purchaser's knowledge, there is no litigation
affecting the Purchaser which could materially
and adversely affect the ability of Purchaser to
perform its obligations under this Agreement or
any other agreement or instrument required
hereunder to be entered into by Purchaser.
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<PAGE>
The term "Purchaser's knowledge" or any similar phrase, as used
above, shall mean the actual knowledge, without specific
investigation, of E. Anthony Wilson, the Chairman and CEO of
Purchaser or Bruce A. Sahs, the President and COO of Purchaser.
12.2. Hudson represents and warrants to Sellers that,
as of the date hereof and as of the Closing Date:
(a) Hudson is a corporation duly organized, validly
existing and in good standing under the laws of
the State of New York, and has all requisite
power to enter into and perform its obligations
under this Agreement, the Note and any other
document or instrument required to be executed
and delivered by Hudson hereunder.
(b) Hudson is authorized to enter into this Agreement
and the Note and to consummate the transactions
contemplated hereby and thereby, and the
individuals executing this Agreement and the Note
on its behalf are also duly authorized to execute
this Agreement and the Note and to bind Hudson to
consummate such transaction. The execution of
this Agreement and the Note by Hudson shall,
within five (5) Business Days of the Date of this
Agreement, be duly authorized by proper corporate
action, including by resolution of the board of
directors of Hudson. If evidence of such due
authorization is not provided to Sellers within
such period referenced above, Sellers shall have
the right to terminate this Agreement.
(c) Hudson is not a foreign entity, foreign
corporation, foreign partnership, foreign trust
or foreign estate (as those terms are defined in
the Internal Revenue Code and Income Tax
regulations).
(d) There is no action, suit or proceeding, pending
or, to Hudson's knowledge, threatened, against
either Hudson in any court or before any
arbitrator or before any governmental body which
(a) in any manner raises any question affecting
the validity or enforceability of this Agreement,
the Shares, the Note or any other agreement or
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<PAGE>
instrument required hereunder or thereunder to be
entered into by Hudson or (b) except as disclosed
in Exhibit G attached hereto, could materially
and adversely affect the ability of Hudson to
perform its obligations hereunder or thereunder.
(e) The authorized capital stock of Hudson as of the
date hereof consists and as of Closing shall
consist of 20,000,000 shares of Hudson Common
Stock and 10,000,000 shares of Hudson Preferred
Stock. As of August 31, 1996 there are 4,415,805
shares of Hudson Common Stock and 294,723 shares
of Hudson Preferred Stock issued and outstanding.
All such issued and outstanding shares of Hudson
Common Stock are duly authorized, validly issued,
fully paid, nonassessable and free of preemptive
rights.
(f) As of the Closing the Shares to be acquired
pursuant to this Agreement shall be duly
authorized for issuance, and upon issuance will
be duly and validly issued, fully paid,
nonassessable and free of preemptive rights.
(g) Except as contemplated hereby, neither the
execution and delivery by Hudson hereof nor the
consummation by Hudson of the transactions
contemplated hereby in accordance with the terms
hereof, will: (i) conflict with or result in any
breach or violation of, or default under, or
result in the acceleration of, any obligation
under any existing corporate charter, certificate
of incorporation or by-laws of Hudson; (ii)
violate or conflict with any statute, regulation,
judgment, order, writ, decree or injunction
applicable to Hudson or any of its subsidiaries;
(iii) violate or conflict with or result in a
breach of any provision of, or constitute a
default (or any event which, with notice or lapse
of time or both, would constitute a default)
under, or result in the termination or in a right
of termination or cancellation of, or accelerate
the performance required by, or result in the
creation of any lien upon any of the properties of
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Hudson or any of its subsidiaries under, or
result in being declared void, voidable or
without further binding effect, any of the terms,
conditions or provisions of any note, bond,
mortgage, indenture, deed of trust or any
license, franchise, permit, lease, contract,
agreement or other instrument, commitment or
obligation to which Hudson or any of its
subsidiaries is a party, or by which Hudson or
any of its subsidiaries or any of its properties
is bound or affected; or (iv) require any
consent, approval or authorization of, or
declaration, filing or registration with, any
government authority, other than any filings
required under the Securities Act of 1933, as
amended (the "Securities Act"), the Securities
Exchange Act of 1934, as amended (the "Exchange
Act"), state securities laws ("Blue Sky Laws")
(collectively, the "Regulatory Filings") and any
filings required to be made with any national
securities exchange on which the Hudson Common
Stock is listed.
(h) Hudson has filed with the SEC a registration
statement in connection with Hudson's initial
public offering of Hudson Common Stock, and all
exhibits, amendments and supplements thereto
(collectively, the "Hudson Registration
Statement"), and each registration statement,
report, proxy statement or information statement
and all exhibits thereto prepared by it or
relating to its properties since the effective
date of the Hudson Registration Statement
(collectively, the "Hudson Reports"). The Hudson
Reports were filed with the SEC in a timely manner
and constitute all forms, reports and documents
required to be filed by Hudson under the Securi-
ties Act, the Exchange Act and the rules and
regulations promulgated thereunder (the "Securi-
ties Laws"). As of their respective dates, the
Hudson Reports (i) complied as to form in all
material respects with the applicable requirements
of the Securities Laws and (ii) did not contain
any untrue statement of a material fact or omit to
state a material fact required to be stated
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therein or necessary to make the statements made
therein, in the light of the circumstances under
which they were made, not misleading. There is no
unresolved violation asserted by any government
authority with respect to any of the Hudson
Reports. The Hudson Reports disclose all adverse
matters with respect to Hudson which are known to
Hudson and required by applicable law to be
disclosed by Hudson on the Hudson Reports.
(i) Each of the balance sheets included in or
incorporated by reference into the Hudson Reports
(including the related notes and schedules) fairly
presented the financial position of the entity or
entities to which it relates as of its date and
each of the statements of operations,
shareholders' equity (deficit) and cash flows
included in or incorporated by reference into the
Hudson Reports (including any related notes and
schedules) fairly presented the results of
operations, retained earnings or cash flows, as
the case may be, of the entity or entities to
which it relates for the periods set forth
therein, in each case in accordance with United
States generally accepted accounting principles
("GAAP") consistently applied during the periods
involved.
(j) Except as disclosed in the Hudson Reports filed
with the SEC prior to the date hereof, as of the
date of this Agreement, Hudson and each of its
subsidiaries has and as of the Closing Date Hudson
and each of its subsidiaries shall have conducted
its business only in the ordinary course and has
and shall have acquired real estate and other
assets and entered into financing arrangements in
connection therewith only in the ordinary course
of such business, and as of the Date of this
Agreement there has not and as of the Closing Date
there shall have not been (a) any declaration,
setting aside or payment of any dividend or other
distribution with respect to the Hudson Common
Stock, (b) any commitment, contractual obligation,
borrowing, capital expenditure or transaction
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(each, a "Commitment") entered into by Hudson or
any of its subsidiaries, other than Commitments
which would not, individually or in the
aggregate, reasonably be expected to result in a
material adverse effect, or (c) any change in
Hudson's accounting principles, practices or
methods. Since June 30, 1996 there has not been,
and as of the Closing Date there shall not have
been, an adverse change in the condition or
financial results of Hudson.
(k) The affirmative vote of the board of directors of
Hudson (which shall be obtained within five (5)
Business Days after the Date of this Agreement) is
the only vote necessary to approve this Agreement
and the Note and the transactions contemplated
hereby and thereby. No shareholder vote by the
shareholders of Hudson is required in connection
with this transaction.
(l) Hudson has entered into this Agreement and agreed
to provide the Note to Sellers and the Shares to
Sellers (indirectly, through delivery thereof to
Purchaser for delivery to Sellers) and to
otherwise perform its obligations hereunder at
Purchaser's request in order to induce Sellers to
enter into this Agreement with Purchaser. Hudson,
being the owner of 100% of the stock of Purchaser
(directly or indirectly) will derive material
benefits from this transaction and has received
fair and adequate consideration for its entry into
and performance of this Agreement (including,
without limitation, payment of a portion of the
Purchase Price, payment and performance of the
Note, issuance of the Shares, and performance of
the covenants set forth in Section 15 and
elsewhere in this Agreement). Hudson understands
that its agreements herein with respect to the
Note, the Shares and otherwise constitutes
material consideration to Sellers for entering
into this Agreement without which Sellers would
not have entered into this Agreement.
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The term "Hudson's knowledge" or any similar phrase, as used
above, shall mean the actual knowledge, without specific
investigation, of E. Anthony Wilson, the Chairman and CEO of
Hudson or Bruce A. Sahs, the Executive Vice President and COO of
Hudson.
12.3. Sellers represent and warrant to Purchaser, and
to Hudson with respect to Sections 12.3(e) and (m) through (o)
only, as follows:
(a) Sellers are, and as of the Closing shall be,
corporations, duly organized, validly existing and
in good standing under the laws of the state of
Delaware, and have, and as of the Closing shall
have, all requisite power to enter into and
perform their obligations under this Agreement and
under any document or instrument required to be
executed and delivered on behalf of Sellers
hereunder.
(b) Sellers are, and as of Closing shall be, autho-
rized to enter into this Agreement and to con-
summate the transaction contemplated hereby, and
the individuals executing this Agreement on behalf
of Sellers are also duly authorized to execute
this Agreement and to bind Sellers to consummate
such transaction. The execution of this Agreement
by Sellers has been duly authorized by proper
corporate action, including by resolution of the
board of directors of each Seller.
(c) No Seller either is or as of Closing shall be a
foreign entity, foreign corporation, foreign
Partnership, foreign trust or foreign estate (as
those terms are defined in the Internal Revenue
Code and Income Tax regulations)
(d) Neither the entry into nor compliance with this
Agreement by Sellers has resulted, or as of
Closing will result, in any violation of, or
default under, or result in the acceleration of,
any obligation under any existing corporate
charter, certificate of incorporation or bylaws
of any Seller.
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(e) There is no action, suit or proceeding pending or,
to Sellers' knowledge, threatened, against Sellers
in any court or before any arbitrator or before
any governmental body which (a) in any manner
raises any question affecting the validity or
enforceability of this Agreement or any other
agreement or instrument required hereunder to be
entered into by Sellers or (b) could materially
and adversely affect the ability of Sellers to
perform their obligations hereunder.
(f) There are no pending or, to the knowledge of
Sellers, threatened, condemnation or similar
proceedings affecting the Premises, or any
portion thereof, to which any Seller is a party.
(g) To Sellers' knowledge, except as disclosed in the
Inspection Items there are no options to purchase,
rights of first refusal or other similar
agreements with respect to the Premises which give
anyone the right to purchase the Premises or any
part thereof. To Sellers' knowledge (based on
inquiry of the management company which manages
the Hotels), there are no contracts or agreements
which affect or relate to the Premises, except for
the Contracts and Permits. Except as set forth in
Exhibit F attached hereto, Sellers have no
knowledge of any unpaid bill or claim in excess of
$35,000 in connection with the construction,
repair or replacement of the Premises which is
past due or was incurred outside the ordinary
course of business, except for such bills or
claims as Sellers are required to pay or bond off
at the Closing. Except as disclosed by the
Inspection Items, to Sellers' knowledge there are
no agreements to which any Seller is a party and
which will be binding upon Purchaser which require
any reduction, concession or abatement of room
rates, except in the ordinary course of business.
(h) To Sellers' knowledge, the Financial Statements
for each of the Hotels that have been made
available to Purchaser pursuant to this Agreement
are true, correct and accurate in all material
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respects and fairly present the results of
operations of the Premises for the periods covered
thereby.
(i) To Sellers' knowledge, each Seller has filed all
federal, state, county and local tax returns
required to be filed by such Seller and has paid
all taxes, interest and penalties that have
become due and payable by such Seller. To
Sellers' knowledge, there is no tax deficiency or
penalty owing with respect to Sellers or the
Premises.
(j) To Sellers' knowledge, Sellers do not lack any
permit, license, certificate or authority
necessary for the present use and occupancy of
each of the Properties.
(k) To Sellers' knowledge, except as set forth in the
Inspection Items, the Premises are in compliance
in all material respects with all statutes, laws,
ordinances, rules, regulations, orders and
directives (including, without limitation, all
building, health, zoning, fire, labor,
environmental control and antipollution laws,
ordinances, rules, regulations or directives) of
any and all governmental agencies pertaining to
the use or occupancy of the Premises. To Sellers'
knowledge, except as set forth in the Inspection
Items (including, without limitation, the
environmental reports listed in Exhibit H hereto
(the "Environmental Reports"), copies of which
Purchaser acknowledges receiving), Sellers and the
Premises are not under investigation or threatened
investigation for failure to comply with any
statutes, laws, ordinances, rules, regulations,
orders and directives of any governmental agency
pertaining to the use, generation, dumping,
releasing, burying or disposing of or emitting of
any materials or substances now or heretofore
defined as "hazardous substances," "hazardous
materials," "hazardous waste," "toxic substances,"
or other similar designations under the
Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, 42 U.S.C.
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<PAGE>
Section 9601, et seq., the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, et
seq., the Hazardous Materials Transportation Act,
49 U.S.C. Section 1801, et seq. and other laws,
whether or not of a similar nature, applicable to
the Premises and adopted by, enacted in or
applicable to the states where the Premises are
located. To Sellers' knowledge, except as may be
set forth in the Environmental Reports, the
Premises have never appeared on any federal or
state registry of active or inactive hazardous
waste disposal sites. Sellers have never received
any notice of claim from a governmental agency
concerning the alleged release or threatened
release of Hazardous Materials at the Premises.
(l) Sellers have no employees.
(m) Within ten (10) Business Days of the Date of this
Agreement and as of Closing, Sellers shall (i)
acknowledge that Hudson is a public company and
(ii) confirm that they have had an opportunity to
review the periodic filings of Hudson with the
SEC, had an opportunity to ask questions of
officials of Hudson concerning the business of
Hudson, and otherwise had the opportunity to
obtain such information as they deemed necessary
to making their decision to accept the Shares as
partial payment of the Purchaser Price and upon
the terms and conditions set forth in this
Agreement.
(n) The Shares are not and as of Closing shall not be
purchased for resale, resyndication,
distribution, subdivision or fractionalization
thereof nor will the Shares be purchased with a
view to or for sale in connection with any
distribution within the meaning of the Securities
Act of 1933, as amended.
(o) Each Seller is and as of Closing shall be an
"Accredited Investor", as defined in Regulation D
under the Securities Act of 1933, as amended.
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(p) To Sellers' knowledge, except as disclosed in
Exhibit I attached hereto, there is no litigation
affecting Sellers or the Premises that is likely
to have a material adverse affect on the
Premises.
(q) As of Closing, all rooms located in the Hotels
will be in habitable condition, subject to
ordinary ongoing maintenance.
Sellers make no representations or warranties to Purchaser or
Hudson other than as specifically set forth herein. The term
"Sellers' knowledge" or any similar phrase, as used above, shall
mean the actual knowledge, without specific investigation or
inquiry (except as specifically provided above), of John P. Buza,
vice president of each of the Sellers. No claim may be asserted
against Sellers under the foregoing representations and
warranties unless upon execution of this Agreement the aforesaid
John P. Buza had actual knowledge of the falsity or inaccuracy
thereof. Notwithstanding any provision hereof to the contrary,
each Seller makes the aforesaid representations and warranties
only as to such Seller and its Property, and no Seller shall be
liable or responsible for any breach of any representation or
warranty which relates to any other Seller or any Property owned
by any other Seller. The Premises will, on the Closing Date, be
transferred "as is," without warranty or representation of any
kind or character except as specifically set forth herein,
including without limitation without any representations as to
physical condition, value, compliance with legal requirements or
the existence or status of contracts affecting the Premises.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THERE IS NO
WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR A
SPECIFIC PURPOSE OR AS TO THE CONDITION OF ANY PROPERTY.
Purchaser will make inspection of the Premises as it deems
appropriate, and has not received any warranties or
representations of any kind, whether written or oral, except as
specifically set forth herein. Purchaser shall, and effective as
of the Closing Date does hereby, assume and agree to indemnify
Sellers from and against all obligations and liabilities arising
in connection with the Premises from and after the Closing Date.
The scope of such indemnification shall not include adverse
environmental conditions which existed or originated prior to the
Closing Date but which are disclosed or manifest themselves after
the Closing Date. Purchaser's and Hudson's sole remedy for
breaches or violations of the foregoing representations and
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warranties which are uncovered prior to the expiration of the
Feasibility Period shall be to terminate this Agreement pursuant
to Section 3 prior to the expiration of the Feasibility Period.
The truth or accuracy of the foregoing representations and
warranties shall not be a condition to Closing and shall not give
rise to any right to terminate this Agreement after the
Feasibility Period. However, the foregoing shall not constitute a
waiver of Purchaser's rights to make claims against Sellers after
the Closing for breach of the foregoing representations and
warranties, subject to the limitations set forth below. Except as
may be otherwise expressly stated to the contrary above, Sellers'
foregoing representations and warranties are made only as of the
Date of this Agreement (and not as of the Closing Date), but
Sellers agree that if they become aware of any matter which would
be inconsistent with any representation or warranty if such
representation or warranty were made as of the Closing Date then
Sellers shall disclose such matter to Purchaser.
12.4. 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 or, in the case
of the representations and warranties set forth in Section 12.3,
until a sale, assignment or other transfer of the Premises (or
any part thereof) by Purchaser, if sooner. No claim may be
asserted by either party under the foregoing representations or
warranties after the expiration of such survival period, and all
claims for breach of such representations and warranties 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. The parties
agree that, except as provided in Section 12.5 but
notwithstanding any other provision hereof to the contrary, (i)
no claim may be asserted against Purchaser or Sellers under the
Base Reps unless the aggregate amount of all claims under the
Base Reps (and the Ninety Day Covenants as provided in Section
14.7 as applicable to Sellers) against Purchaser or Sellers, as
the case may be, is in excess of $100,000, and (ii) the maximum
aggregate liability of each of Purchaser and Sellers under or in
connection with the Base Reps (and the Ninety Day Covenants as
provided in Section 14.7 as applicable to Sellers) (as a result
of any breach thereof or inaccuracy therein, or otherwise) shall
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not exceed $3 million, and neither Purchaser nor Sellers shall
have liability under or in connection with the Base Reps (and the
Ninety Day Covenants as provided in Section 14.7 as applicable to
Sellers) in excess of such maximum aggregate amount.
Notwithstanding any provision hereof to the contrary, no claim
may be asserted against Sellers for breach of Section 12.3(q)
later than seven (7) Business Days after the Closing Date, and
any claim asserted prior to such time must be specific as to the
breach being asserted.
12.5. Each of the representations and warranties
contained in Section 12.2, and, notwithstanding Section 12.4
above, the representations and warranties set forth in Sections
12.3(m), (n) and (o) to the extent that such representations and
warranties are applicable to the Shares (the representations and
warranties set forth in Section 12.2 and the aforesaid
representations and warranties set forth in Section 12.3(m), (n)
and (o) being hereinafter referred to as the "Shares/Note Reps")
shall survive the Closing until the later to occur of (i) the
first anniversary of the Closing Date and (ii) such time as
Sellers no longer own any of the Shares and the Note has been
paid in full. No claim may be asserted by Sellers under the
Shares/Note Reps after the expiration of such survival period,
and all claims for breach of such representations and warranties
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. The parties
agree that, notwithstanding any provision hereof to the contrary,
(i) no claim may be asserted against Hudson or Sellers under the
Shares/Note Reps unless the aggregate amount of all claims
against Hudson or Sellers, as the case may be, under the
Shares/Note Reps is in excess of $100,000, and (ii) the maximum
aggregate liability of each of Hudson and Sellers under or in
connection with the Shares/Notes Reps (as a result of any breach
thereof or inaccuracy therein, or otherwise) shall not exceed $6
million, and neither Hudson nor Sellers shall have liability
under the Shares/Note Reps in excess of such maximum aggregate
amount.
12.6. Purchaser acknowledges that Sellers have
orally disclosed to Purchaser the unresolved disagreements and
disputes between certain of the Sellers and the franchisor under
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the Franchise Agreements for the Cricket Inn Properties. Sellers
shall deliver to Purchaser within five (5) Business Days of the
Date of this Agreement a writing which shall further explain such
matters. Purchaser agrees that if it is dissatisfied with the
Premises or this transaction because of the aforesaid matters,
Purchaser's sole remedy shall be to terminate this Agreement
during the Feasibility Period, and in no event shall Purchaser
assert a breach of any representation or warranty by Sellers or
any other claim against Sellers in connection therewith.
Section 13. ESCROW.
13.1. Escrow Agent hereby acknowledges receipt of the
Deposit and agrees to hold the Deposit in escrow until the
Closing or sooner termination of this Agreement and shall pay
over and apply the proceeds thereof in accordance with the terms
of this Agreement. If, for any reason, the Closing does not occur
and either Purchaser or Sellers makes a written demand upon
Escrow Agent for payment of the Deposit, Escrow Agent shall give
written notice to the other party of such demand. If Escrow Agent
does not receive a written objection from the other party to the
proposed payment within five (5) Business Days after the giving
of such notice, Escrow Agent is hereby authorized to make such
payment. If Escrow Agent does receive such written objection
within such five (5) Business Day period, or if for any reason
Escrow Agent in good faith shall elect not to make such payment,
or in the event of any other dispute between Purchaser and
Sellers, Escrow Agent shall either continue to hold the Deposit
until otherwise directed by written instructions from the parties
to this Agreement or until a final judgment (beyond any
applicable appeal period) by a court of competent jurisdiction is
rendered disposing of such Deposit, or shall have the right to
deposit the escrowed funds in a court of competent jurisdiction
pursuant to CPLR 1006 or any other applicable statute. Upon
delivery of the Deposit to either Purchaser, Sellers or a court
of competent jurisdiction under and pursuant to this Section 13,
Escrow Agent shall be relieved of all liability, responsibility
or obligation with respect to or arising out of the Deposit and
any and all of its obligations therefrom. Escrow Agent shall be
liable as a depository only and its duties hereunder are limited
to the safekeeping of the Deposit and the delivery of same in
accordance with the terms of this Agreement.
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13.2. Purchaser and Sellers hereby agree to indemnify,
defend and hold harmless Escrow Agent from and against any cost
and expense Escrow Agent may incur as a result of its agreement
to act as Escrow Agent. Purchaser and Sellers shall be equally
responsible for such indemnity.
13.3. Escrow Agent shall not have any liability or
obligation for loss of all or any portion of the Deposit by
reason of the insolvency or failure of the institution or
depository with whom the Deposit has been made. The parties
acknowledge that Escrow Agent shall deposit and maintain the
Deposit with Chemical Bank and the parties agree that said
institution is acceptable.
13.4. Escrow Agent shall not be liable to Purchaser or
Sellers, or any other party, for any action taken or omitted to
be taken by it in good faith; and Escrow Agent shall not be
responsible to any party for the consequences of any oversight or
errors of judgment on its part, nor be answerable to any party
for any loss, cost or expense unless same shall occur through
Escrow Agent's gross negligence or willful misconduct. Escrow
Agent shall be entitled to consult with counsel of its own
choosing and shall not be liable for any action taken, suffered
or omitted by it in accordance with the advice of such counsel.
13.5. Escrow Agent shall have the right to act in
reliance upon any document, instrument or signature believed by
it to be genuine and to assume that any person purporting to give
any notice or instruction in accordance with the provisions
hereof has been duly authorized to do so.
13.6. Escrow Agent shall execute this Agreement solely
to acknowledge its obligations as Escrow Agent hereunder.
Section 14. SELLERS COVENANTS.
14.1. Following the date of this Agreement and to and
including the Closing, Sellers shall, or shall cause the manager
of the Premises to, continue normal maintenance and management of
the Premises and operation and marketing of the Hotels in the
ordinary course of business. Sellers will terminate their
existing management agreement at or prior to Closing. If
requested by Purchaser, Sellers will cooperate with Purchaser in
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its attempt to negotiate an agreement with Sellers' management
company for such management company to continue managing the
Properties on Purchaser's behalf and at Purchaser's cost for one
month following the Closing in order to facilitate the transition
of ownership. No claim may be asserted under this Section 14.1
after the Closing.
14.2. All taxes levied against the Premises which were
or shall be due and payable prior to the Closing shall be paid in
full by Sellers on or prior to the Closing.
14.3. All payments which are due and payable prior to
the Closing Date under any Contract shall be made by Sellers at
or prior to the Closing. Sellers shall not enter into new
contracts or amend, cancel or renew any existing Contracts after
the Date of this Agreement except in the ordinary course of
business. Any such new Contract entered into after the Date of
this Agreement shall, unless Purchaser otherwise consents,
provide that it may be cancelled on not more than 30 days' notice
by Sellers at no penalty or cost.
14.4. Sellers shall maintain the present level of fire
and casualty insurance on the Premises up to and including the
Closing.
14.5. Sellers shall deliver to Purchaser a report
itemizing room sales per month, occupancy and ADR through a date
which is not later than one month prior to the Closing Date.
14.6. Prior to the Closing Date, Sellers shall not
deplete inventories of any of the Hotels below their normal
levels. Purchaser shall have seven (7) Business Days following
Closing to confirm that Sellers did not breach this covenant and
to assert any related claim (Purchaser hereby waiving any right
to assert any such claim after such seven (7) Business Day
Period), except that, (i) no claim may be asserted against
Sellers under this Section 14.6 unless the aggregate amount of
all claims under this Section 14.6 against Sellers is in excess
of $15,000, and (ii) the maximum aggregate liability of Sellers
under or in connection with this Section 14.6 (as a result of any
breach hereof or inaccuracy therein, or otherwise) shall not
exceed $120,000, and Sellers shall not have liability under or in
connection with this Section 14.6 in excess of such maximum
aggregate amount.
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14.7. No claim may be asserted by either party for
breach of the covenants contained in Sections 14.2, 14.3, and
14.4 (collectively, the "Ninety Day Covenants") except during the
90 day period immediately following the Closing and all claims
for breach of such Ninety Day Covenants asserted during such
period may continue to be asserted after such period only if
during such 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. The parties agree that (i) no claim may be asserted
against Sellers under the Ninety Day Covenants unless the
aggregate amount of all claims under the Ninety Day Covenants
against Sellers is in excess of $100,000, and (ii) the maximum
aggregate liability of Sellers under or in connection with the
Ninety Day Covenants and the Base Reps, in the aggregate shall
not exceed $3 million, and Sellers shall not have liability under
or in connection with the Ninety Day Covenants and/or the Base
Reps in excess of such maximum aggregate amount.
14.8. None of the Sellers' covenants set forth in this
Agreement shall survive the Closing unless otherwise expressly
set forth herein.
Section 15. HUDSON COVENANTS.
15.1. For as long as Sellers own any of the Shares,
Hudson 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 Hudson ("Equity Offering") and
an opportunity to make the first offer to underwrite such
offering. Provided that Salomon Brothers Inc shall submit a
written proposal to Hudson with respect to such underwriting
within 20 days after written notice from Hudson 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 Hudson's judgment to those available
from an alternative underwriter, Hudson 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 Hudson after giving such due
consideration wishes to accept an offer from an alternative
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underwriter (the "Alternative Underwriter") in connection with
any Equity Offering, Hudson 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 Hudson 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)", Hudson shall
accept the Matching Offer of Salomon Brothers Inc to be the
principal underwriter. If Salomon Brothers Inc does not provide
Hudson with a Matching Offer during the Right of First Refusal
Period, Hudson 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 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, Hudson shall not have entered into such
underwriting commitment agreement with the Alternative
Underwriter, Hudson 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. Hudson 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 shall be a
third party beneficiary under this Section 15.1 but shall not
have any obligation or liability whatsoever under this Agreement.
For the purposes hereof, any form or type of equity offerings of
Hudson shall not include any type of mortgage, line of credit,
bond or debenture financing.
15.2. Hudson hereby covenants with Sellers that from
and after the Closing, any public announcements or disclosures
made by Hudson 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 Sellers for their review and approval. Until such approval has
been given to Hudson by Sellers, Hudson shall refrain from making
such public disclosures or announcements.
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15.3. (a) Hudson hereby covenants with Sellers that,
in the event a Closing takes place hereunder, Hudson 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. Hudson 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 Sellers have disposed of all of the Shares. To this end,
following the Closing Date, Hudson 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
Registration and any form of prospectus included therein or
prospectus supplement relating thereto shall reflect such plan of
distribution or method of sale as Sellers may from time to time
notify Hudson, including the sale of some or all of the Shares in
a public offering or, if requested by Sellers, subject to receipt
by Hudson of such information (including information relating to
purchasers) as Hudson 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 Hudson 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 Hudson 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 Hudson undertakes to
effect a registration after the conclusion of such transaction to
permit such shares to be freely tradeable by the purchasers
thereof. Hudson 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 Sellers (the "Registration Period)" and in
the event that notwithstanding Hudson's best efforts, Hudson
fails to keep the Shelf Registration effective, Hudson shall file
with the SEC another Shelf Registration, such that a Shelf Reg-
45
<PAGE>
istration is continually in effect during the Registration
Period. During the Registration Period, Hudson shall supplement
or make amendments to the Shelf Registration, if required by the
Securities Act or if reasonably requested by Sellers 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, Hudson and E. Anthony Wilson covenant
that E. Anthony Wilson acting in his individual capacity shall
not sell any shares of Hudson Common Stock other than under and
pursuant to Rule 144 of the Securities Act. E. Anthony Wilson has
executed this Agreement below in his individual capacity to
confirm his agreement to such covenant.
15.4. If, at any time from and after the Closing Date
and until commencement of the Registration Period, Hudson shall
propose to prepare on its own behalf or on behalf of any of its
shareholders (other than Sellers) a registration statement in
connection with an underwritten public offering of any securities
of Hudson, Hudson shall give Sellers notice at least 20 days
before the anticipated filing date of such registration
statement. Should Sellers desire to have any Shares owned by
Sellers included in such registration statement, Sellers shall so
advise Hudson no later than 15 days after Hudson's notice is
given, setting forth the number or amount of Shares which Sellers
request to be included in the registration statement, and Hudson
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)
Hudson 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
46
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registration statement for the same offering and declared
effective; and (ii) Hudson 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 Sellers 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, Hudson 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 Sellers, deliver to Sellers a certificate, signed by Hudson's
principal financial officer, stating (a) Hudson's name, address
and telephone number (including area code), (b) Hudson's Internal
Revenue Service identification number, (c) Hudson's SEC file
number, (d) the number of shares of Hudson's common stock and the
number of shares of any preferred stock of Hudson outstanding as
shown by the most recent report or statement published by Hudson,
and (e) whether Hudson 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 Hudson is not required to file reports in compliance with
either Section 13 or Section 15(d) of the Exchange Act, Hudson
will, at its expense, forthwith upon the written request of
Sellers, make available adequate current public information with
respect to Hudson 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 Sellers may dispose
of the Shares using several different methods, which may include
an underwritten offering. In the event that Sellers elect to
utilize an underwriter, Hudson shall enter into a customary
underwriting agreement providing for customary indemnities for
the underwriters and the selling security holders. Hudson 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.
47
<PAGE>
(b) In the event that Sellers shall elect to dispose
of the Shares in a transaction or series of transactions not
involving an underwriting Hudson and Sellers 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.
15.7. (a) Hudson shall, if so requested by Sellers
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 Sellers hold any Shares, an
observer of Hudson's Board of Directors, designated by Sellers,
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 Hudson. Such observer shall be
indemnified by Hudson 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,
Sellers shall have the right (but not the obligation) to have on
the board of directors of Hudson (the "Board") one director (such
director and any other person made a director of the Board
pursuant to this Section 15.8, the "Sellers Nominee)", and Hudson
shall promptly cause Sellers Nominee to become a member of the
Board. If necessary to effectuate the placement of the Sellers
Nominee on the Board, Hudson 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 Sellers Nominee to serve. Until such time that Sellers
no longer own the Shares, Sellers shall have the right to
maintain a Sellers Nominee on the Board. Sellers agree to
indicate to Purchaser within five (5) Business days after the
expiration of the Feasibility Period whether they will request a
Sellers Nominee to be placed on the Board immediately following
Closing.
(c) If Sellers elect to exercise their option in
Section 15.7(b) above, Hudson will support the nomination of, and
Hudson's nominating committee (or any other committee exercising
a similar function) shall recommend to the Board, the election of
any Sellers Nominee to the Board, and Hudson will exercise all
authority under applicable law to cause such Sellers Nominee to
be elected to the Board. Without limiting the generality of the
foregoing, with respect to each meeting of shareholders of Hudson
at which directors are to be elected, Hudson shall use its
48
<PAGE>
reasonable efforts to solicit from the shareholders of Hudson
eligible to vote in the election of directors proxies in favor of
such Sellers Nominee.
(d) In the event that any Sellers Nominee shall cease
to serve as a director for any reason other than the fact that
Sellers no longer have a right to nominate a director, as
provided in subsection (b), the vacancy resulting thereby shall,
if Sellers so choose in their sole discretion, be filled by a
Sellers Nominee designated by Sellers.
15.8. The rights and benefits of Sellers set forth in
Sections 15.3(a), 15.4, 15.5 and 15.6 hereunder shall inure to
the benefit of any of Sellers' 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
15 shall survive the Closing until Sellers no longer own any of
the Shares.
Section 16. BINDING EFFECT; MISCELLANEOUS.
16.1. This Agreement shall be binding upon and shall
inure to the parties hereto, their respective heirs, successors,
legal representatives and assigns. This Agreement sets forth the
entire Agreement between the parties hereto and no other prior
written or oral statement or agreement or understanding shall be
recognized or enforced. All modifications or amendments shall be
in writing and signed by the parties. This Agreement is to 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 Agreement 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, and by execution hereof each party accepts the
jurisdiction of such courts. This Agreement may be executed in
two or more counterparts all of which shall constitute one and
the same instrument. Each of the twelve (12) individual Sellers
is hereby acknowledged to be a separate and distinct legal
entity, wholly independent from the other Sellers, and each of
the Sellers shall be liable only for such claims or demands made
by Purchaser with respect to the Property (and other related
49
<PAGE>
aspects of the Premises) owned by such Seller and the
representations, warranties and covenants made by such Seller
with respect to such Property, and it is specifically agreed by
and between Purchaser and each of the individual Sellers hereto
that liability of the Sellers under this Agreement is and shall
be individual only and is not and shall not be joint and several
with other Sellers.
16.2. Purchaser shall not be permitted to assign this
Agreement to any third party, except that, with Sellers' prior
written consent (which consent shall not be unreasonably withheld
and, in any event, shall be granted if the conditions set forth
in clauses (i) through (iii) below are satisfied), Purchaser
shall be permitted to assign this Agreement to another directly
or indirectly wholly-owned subsidiary of Hudson provided that (i)
such assignment does not adversely affect Sellers (in connection
with the matters set forth in Section 3.5 or otherwise), (ii) the
assignee shall assume all of Purchaser's obligations hereunder
pursuant to an assumption agreement approved as to form and
substance by sellers, and (iii) such assignment shall not release
Purchaser or Hudson from their obligations hereunder.
16.3. As used herein, the "Date of this Agreement"
shall mean the date noted below as the date upon which this
Agreement was executed by the parties hereto. As used herein, the
term "Business Day" shall mean any day other than a Saturday, a
Sunday or a bank holiday in New York, N.Y.
16.4. No delay or omission in the exercise of any
right or remedy accruing to Sellers or Purchaser upon any breach
under this Agreement shall impair such right or remedy or be
construed as a waiver of any such breach theretofore or
thereafter occurring. The waiver by Sellers or Purchaser of any
breach of any term, covenant or condition herein stated shall not
be deemed to be a waiver of any other breach, or of a subsequent
breach of the same or any other term, covenant or condition
herein contained. All rights, powers, options or remedies
afforded to Sellers or Purchaser either hereunder or by law shall
be cumulative and not alternative, and the exercise of one right,
power, option or remedy shall not bar other rights, powers,
options or remedies allowed herein or by law, unless expressly
provided to the contrary herein.
50
<PAGE>
16.5. All exhibits and schedules referred to in this
Agreement and attached hereto are hereby incorporated in this
Agreement by reference.
16.6. Article headings and article and section numbers
are inserted herein only as a matter of convenience and in no way
define, limit or prescribe the scope or intent of this Agreement
or any part thereof and shall not be considered in interpreting
or construing this Agreement.
16.7. Time is of the essence as to all matters
contained in the Agreement. If the final day of any time period
or limitation set out in any provision of this Agreement falls on
a Saturday, Sunday or legal holiday under the laws of the State
of New York or the federal government, then and in such event
such period shall be extended to the next day which is not a
Saturday, Sunday or legal holiday.
16.8. In addition to the acts, deeds, instruments and
agreements recited herein and contemplated to be performed,
executed and delivered by Purchaser and Sellers, Purchaser and
Sellers shall perform, execute and deliver or cause to be
performed, executed and delivered at the Closing or after the
Closing, any and all further acts, deeds, instruments and
agreements and provide such further assurances as the other party
may reasonably require to consummate the transaction contemplated
hereunder. However, the foregoing shall not be deemed to require
Sellers to expend any money or incur liability, obligations or
exposure in excess of that which is provided for herein.
16.9. In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provision hereof, and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never
been contained herein.
16.10. Purchaser shall be jointly and severally
responsible with Hudson for Hudson's performance of and liability
under Hudson's covenants, representations and warranties
hereunder. Any breach or default by Hudson hereunder shall
constitute a breach or default by Purchaser.
51
<PAGE>
16.11. In order to assist Purchaser with its due
diligence, Sellers shall provide to Purchaser within five (5)
Business Days after the Date of this Agreement a letter which
shall summarize the acquisition of the Premises by Sellers
through foreclosures and deeds-in-lieu of foreclosure from Motels
of America in connection with a bankruptcy and litigation
relating to Motels of America.
52
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of September 27, 1996.
SELLERS: SB MOTEL RICHMOND CORP.
By: \s\ John P. Buza
----------------------
Name: John P. Buza
Title: Vice President
SB MOTEL DURHAM-RESEARCH
TRIANGLE PARK CORP.
By: \s\ John P. Buza
---------------------
Name: John P. Buza
Title: Vice President
SB MOTEL CARY CORP.
By: \s\ John P. Buza
--------------------
Name: John B. Buza
Title: Vice President
SB MOTEL STATESVILLE CORP.
By: \s\ John P. Buza
--------------------
Name: John P. Buza
Title: Vice President
SB MOTEL WILMINGTON CORP.
By: \s\ John P. Buza
--------------------
Name: John P. Buza
Title: Vice President
SB MOTEL COLUMBIA CORP.
By: \s\ John P. Buza
--------------------
Name: John P. Buza
Title: Vice President
53
<PAGE>
SB MOTEL CHARLESTON CORP.
By: \s\ John P. Buza
----------------------
Name: John P. Buza
Title: Vice President
SB MOTEL ALBANY CORP.
By: \s\ John P. Buza
---------------------
Name: John P. Buza
Title: Vice President
SB MOTEL VIRGINIA BEACH CORP.
By: \s\ John P. Buza
--------------------
Name: John P. Buza
Title: Vice President
SB MOTEL DURHAM-DUKE CORP.
By: \s\ John P. Buza
--------------------
Name: John P. Buza
Title: Vice President
SB MOTEL RALEIGH CORP.
By: \s\ John P. Buza
--------------------
Name: John P. Buza
Title: Vice President
SB MOTEL CHARLOTTE 1-85 CORP.
By: \s\ John P. Buza
--------------------
Name: John P. Buza
Title: Vice President
54
<PAGE>
PURCHASER: HUDSON HOTELS PROPERTIES CORP.
By: \s\ John P. Buza
------------------------
Name: E. Anthony Wilson
Title: Chairman and Chief
Executive Officer
HUDSON: HUDSON HOTELS CORPORATION
By: \s\ E. Anthony Wilson
------------------------
Name: E. Anthony Wilson
Title: Chairman and Chief
Executive Officer
ESCROW AGENT: LAWYERS TITLE INSURANCE
CORPORATION
By:________________________
Name:
Title:
E. Anthony Wilson is executing
this Agreement in his individual
capacity solely in order to make
the covenant set forth in
Section 15.3(b)
\s\ E. Anthony Wilson
- ----------------------------
E. Anthony Wilson
Escrow Agent is executing
this agreement solely to
acknowledge its obligations
as Escrow Agent hereunder
LAWYERS TITLE INSURANCE CORPORATION
By: \s\
------------------------
55
<PAGE>
Name:
Title:
56
<PAGE>
EXHIBITS A-1 THROUGH A-12
[Legal Descriptions]
57
<PAGE>
EXHIBIT A-1
ALL that certain lot, piece or parcel of land with all
improvements thereon and appurtenances thereunto belonging,lying
and being in Henrico County, Virginia, and being more
particularly described as follows to-wit:
BEGINNING at a rod in the eastern right of way line of Broad
Street Road, said rod being the southwest corner of that tract
now or formerly owned by Dixon W. Christian; and running thence
from said beginning rod along the southern boundary line of Dixon
W. Christian, North 72 degrees 33 minutes 58 seconds East 277.81
feet; and North 53 degrees 41 minutes 13 seconds East 277.00 feet
to an iron pipe in the western right of way line of Bowler
Street; thence along the western right of way line of Bowler
Street the two (2) following courses and distances: South 43
degrees 00 minutes 47 seconds East 115.51 feet; and South 41
degrees 57 minutes 55 seconds East 219.53 feet to a stone; thence
along the northern boundary line of Eddie and Mary W. Cargill,
South 59 degrees 03 minutes 47 seconds West 381.50 feet to a
stone; thence North 72 degrees 46 minutes 02 seconds West 51.75
feet to a rod; thence South 17 degrees 13 minutes 58 seconds West
25.00 feet to a rod; thence North 72 degrees 46 minutes 02
seconds West 51.75 feet to a rod; thence South 17 degrees 13
minutes 58 seconds West 25.00 feet to a rod; thence North 72
degrees 46 minutes 02 seconds West 128.70 feet to a PK nail;
thence South 66 degrees 44 minutes 08 seconds West 124.10 feet to
a mark in the eastern right of way line of Broad Street Road;
thence along the eastern right of way line of Broad Street Road,
North 23 degrees 15 minutes 52 seconds West 235.10 feet to the
point and place of beginning, same containing 3.988 acres, more
or less, and being those same premises surveyed and platted by
Foster & Miller, P.C., on March 1, 1989.
BEING the same real estate conveyed to Motels of America, Inc., a
Delaware Corporation, by deed from Turnpike Properties, Inc., a
North Carolina Corporation, dated July 28, 1989, recorded August
4, 1989, in the Clerk's Office of the Circuit Court, Henrico
County, Virginia, in Deed Book 2201 at Page 651.
58
<PAGE>
EXHIBIT A-2
LYING AND BEING in Triangle Township, Durham County, State
of North Carolina:
BEGINNING at a point in the western right of way line of
the Durham and Southern R.R. at its intersection with Interstate
40, as shown on the plat hereinafter referred to; and running
thence North 8l degrees 44' 38" West 321.52 feet to a stake in
the east right of way line of N.C. Highway #55; thence along the
east right of way line of N.C. Highway #55 North 06 degrees 08'
18" East 163.29 feet to a stake; thence continuing along the east
right of way line of N.C. Highway #55 North l4 degrees 18' 22"
East 124.08 feet to a stake; thence continuing along the east
right of way line of N.C. Highway #55 North 14 degrees 19' 01"
East 23.17 feet to a stake, the intersection of N.C. Highway #55
and the south line of Pitcairn Place; thence along and with the
south line of Pitcairn Place South 89 degrees 40' East 315.38
feet to a point in the west right of way line of the Durham and
Southern R.R.; thence along and with the west right of way of
said railroad, South 08 degrees 13' 35" West 356.70 feet to the
point and place of BEGINNING, containing 2.4588 acres, more or
less, and being that same property surveyed and platted by George
C. Love, Jr., R.L.S. on the 2nd day of February, 1989. See also
Plat Book 102, Page 117, Durham County Registry.
59
<PAGE>
EXHIBIT A-3
All of that certain tract or parcel of land lying and being
situate in Cary Township, Wake County, North Carolina and being
more particularly described as follows: Beginning at a point in
the southern right of way line of the Cary-Macedonia Road, said
point of beginning having North Carolina grid coordinates
N=732,824.88 and E=2,074,786.44. THENCE, FROM SAID POINT OF
BEGINNING, SO LOCATED, South 69 degrees 53' 25" East, along and
with the southern right of way line of the Cary-Macedonia Road,
138.58 feet to a point, said point being the northwestern corner
of the property owned now or formerly by Joseph W. Smith; thence,
continuing along and with the western line of the property owned
now or formerly by Joseph W. Smith and the tract owned by Joseph
W. Smith and Lula J. Smith, South 26 degrees 18' 09" West 878.96
feet to an existing iron pipe in the line of the property owned
now or formerly by Erich A. Barbour; thence, North 63 degrees 38'
41" West, along and with the northern line of the property owned
now or formerly by Barbour, 534.24 feet to an existing iron pipe;
thence, North 4l degrees 33' 02" East 592.22 feet; thence, South
67 degrees 46' 16" East 241.31 feet; thence, North 26 degrees 18'
09" East 275.00 feet to the point or place of beginning.
The above-described tract or parcel of land is conveyed expressly
subject to, but together with, a non-exclusive easement of
ingress, egress and regress over, upon and across a tract or
parcel of land fifty (50) feet in width, the western most line of
said easement fifty (50) in width being described as follows:
Beginning at a point in the southern right of way line of the
Cary-Macedonia Road, said point of beginning being the
northeastern corner of the tract or parcel of land
above-described and said point having North Carolina grid
coordinates N=732,824.88 and E=2,074,786.44. THENCE, FROM SAID
POINT OF BEGINNING, SO LOCATED, South 26 degrees 18' 09" West 275
feet.
Being those same premises surveyed and platted by Runa A. Cooper,
R.L.S. on the 27th day of February, 1989.
60
<PAGE>
EXHIBIT A-4
Leasehold estate created by the terms of that certain
lease, a Memorandum of which is as follows: Memorandum of Lease
dated February 20, 1984, from Interstate Development Company, a
North Carolina corporation, to Turnpike Properties, Inc. for a
maximum term of 50 years including extensions and renewals, which
Memorandum of Lease appears in Book 696 at Page 475 in the Office
of the Register of Deeds of Iredell County, North Carolina, and
having been amended by the terms of that document entitled
"Amendment of Lease" dated March 30, 1984, and recorded in Book
698 at Page 589 in the Office of the Register of Deeds of Iredell
County, North Carolina.
LYING AND BEING in Statesville Inside Township, County of
Iredell, State of North Carolina:
Beginning at an iron at the northeast corner of property of James
C. Kivett, et al described in deed recorded in Book 551, Page
515, Iredell County, North Carolina Registry (also being the
northwest corner of property of William C. Stiles, Jr. described
in deed recorded in Book 689, page 987, Iredell County, North
Carolina Registry); running thence with the north line of said
Kivett property North 79 degrees 30' West 128.73 feet to an iron
at the edge of pavement of the Newtowne Plaza Shopping Center
paved parking lot; thence with the edge of said pavement North 06
degrees 35' l0" East 356.02 feet to an iron at the edge of said
pavement; thence South 87 degrees 16' 30" East 211.33 feet to an
iron; thence South 38 degrees 17' 00" East 60.96 feet to an iron;
thence South 02 degrees 43' 30" West 344.78 feet to a nail;
thence North 82 degrees 27' West 148.87 feet to an iron; thence
South 10 degrees 00' West 2.00 feet to the point and place of
Beginning, containing 2.23805 acres as shown on plat entitled
"CRICKET INN, Statesville, Iredell County, N.C." prepared by
Sprinkle Surveying Company dated February 15, 1984, revised March
20, 1984.
61
<PAGE>
EXHIBIT A-5
BEGINNING at an iron pipe, the southwest intersection of
Market Street (50 feet from centerline) and Lullwater Drive (30
feet from centerline); and running thence along the western right
of way line of Lullwater Drive South 02 degees 28' East 587.80
feet to an iron pipe, the northeast corner of R. W. Cannon;
thence along the northern boundary line of Cannon the two (2)
following courses and distances: South 65 degrees 02' West 130.00
feet; and South 87 degrees 32' west 136.67 feet to an iron pipe
in the eastern boundary line of Lillian Crowell; thence North 03
degrees 47' East 621.31 feet to an iron pipe in the southern
right of way line of Market Street; thence along said right of
way line North 81 degrees 27' East 190.14 feet to the point and
place of BEGINNING, same containing 3.13 acres, more or less, and
being those same premises surveyed and platted by Stuart Y.
Benson, R.L.S., February, 1989.
62
<PAGE>
EXHIBIT A-6
All that certain piece, parcel or tract of land, together with
any improvements thereon, situate, lying and being at the
easternmost intersection of right-of-way for Old Two Notch Road
and Interstate Highway 77, said property containing 4.191 acres,
more or less, and being more fully shown as Tract 2 on a Plat
prepared for Commercial Title Agency, Inc., dated April 29, 1987,
by B.P. Barber & Associates, Inc., and recorded in the RMC Office
for Richland County in Plat Book 51 at page 8819; said property
having the following courses, measurements, metes and boundaries
as shown on the aforesaid plat, to-wit:
BEGINNING at an iron located at the northernmost corner of
the subject property which iron is at the southernmost
corner of the intersection of Old Two Notch Road (formerly
U.S. Highway #1) and property designated on the aforesaid
plat as Proposed Trenholm Road Extension; thence from said
point of beginning S37 degrees l2'35"E for 423.70 feet to
an iron; thence turning and running along the northern
boundary of the right-of-way for Seaboard System Railroad
for the following distances: S50 degrees 48'05"W for 198.70
feet to an iron; S49 degrees 28'42"W for 106.00 feet to an
iron; S49 degrees 28'42"W for 112.38 feet to an iron; said
iron located at the intersection of the right-of-way for
Interstate No. 77; thence turning and running along the
right-of-way for Interstate No. 77 for the following
distances: N37 degrees l7'22" for 415.20 feet to an iron;
N48 degrees 48'33"W for 1.33 feet to a concrete monument;
N48 degrees 46'33"W for 34.90 feet to a point whereat said
property corners with property designated as Tract 1 on the
aforesaid plat; thence turning and running from along
property designated as Tract N52 degrees 42'38"E for 314.75
feet to an iron; thence turning and running along a common
maintenance area for pavement as designated on the
aforesaid plat S4l degrees 35'05"E for 11.05 feet to an
iron; thence turning and running along the right-of-way for
U.S. Highway No.1 (Two Notch Road) N48 degrees 24'55"E for
28.96 feet to an iron; thence turning and continuing along
said right-of-way N52 degrees 08'54"E for 80.00 feet to an
iron; this being the POINT OF BEGINNING.
63
<PAGE>
Being the same premises surveyed and platted by Laverne
Steadman, Registered Surveyor, on the 28th day of February,
1989.
Also, all rights, title and interest in and to those
easements and rights-of-way retained by Turnpike
Properties, Inc. under the terms of that certain Special
Warranty Deed granted unto Notch, which deed is recorded in
Book D0859, Page 922.
64
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EXHIBIT A-7
TRACTS I AND II - CHARLESTON COUNTY:
All that certain piece, parcel or tract of land, together with
any improvements thereon, situate, lying arid being in the City
of North Charleston, County of Charleston, State of South
Carolina, containing 1.52 acres, more or less, on the
southwestern boundary of the right-of-way of Northforest Drive,
said property being more fully shown and delineated as a 1.52
acre tract on a plat for Crickett Inn dated August 6, 1986, and
recorded in the RMC Office for Charleston County in Plat Book BK
at page 59; said property having the following courses,
measurements, metes arid boundaries, as shown on the aforesaid
plat, to-wit:
BEGINNING at an iron located at the northeasternmost corner
of the subject property, which iron is located on the
southern boundary of the right-of-way for Northforest
Drive, thence from said point of beginning S56 degrees
23'04"W for a distance of 70.49 feet to a point; thence
turning and running S10 degrees 51'11"E for a distance of
185.00 feet along property heretofore conveyed to the
Grantee herein by Deed of Sanderling Partners dated as of
September 3, 1986; thence turning and running N79 degrees
08'49"W for a distance of 291.49 feet to a point; thence
turning arid running N02 degrees 20'l8"E for 24.30 feet to
an iron; thence turning and running N01 degrees 56'39"E for
114.95 feet to an iron; thence turning and running N02
(degree) 54'l8"E for 74.51 feet to an iron; thence turning
arid running N62 (degree) 56'44"E for 257.08 feet to an
iron located on the western boundary of the right-of-way
for Northforest Drive; thence turning and running in a
general southeastern direction along the curve of the
right-of-way for Northforest Drive (said curve having an
arc distance of 100.00 feet and a radius of 67.00 feet) to
an iron, this being the POINT OF BEGINNING.
TMS No. 484-00-00-068
ALL that certain piece, parcel or tract of land, together
with any improvements thereon, situate, lying arid being in
the City of North Charleston, County of Charleston, State
of
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South Carolina, containing 2.95 acres, more or less, at the
southwestern corner of the intersection of Northside Drive
arid Northforest Drive, said property being more fully
shown and delineated on a plat entitled Cricket Inn
prepared by E.M. EXHIBIT A-7 (continued)
Seabrook, Jr., Inc., dated August 6, 1986, and recorded in
the RMC Office for Charleston County in Plat Book BK at
page 59; said property having the following courses,
measurements, metes arid boundaries, as shown on the
aforesaid plat, to- wit:
BEGINNING at a point located on the western boundary of the
right-of-way for Northside Drive whereon the same corners
with the southern boundary of the right-of-way for
Northforest Drive, thence from said point of beginning S10
(degrees) 5l'11"E for 184.00 feet to a point; thence
turning arid running along properties designated on the
aforesaid plat as McDonalds, Bojangles, and Northwoods
Limited Partnership, S79 (degrees) 08'49"W for 611.96 feet
to a point; thence turning and running Nl0 (degrees)
5l'll"W for 185.00 feet to a point; thence turning and
running N56 (degrees) 23'04" for 70.49 feet to a point on
the southern boundary of the right-of-way for Northforest
Drive; thence turning and running along the southern
boundary of the right-of-way for Northforest Drive in an
eastern direction along a curve for a distance of 6.10 feet
(said curve having a radius of 67.00 feet) to a point;
thence turning and continuing along the southern boundary
of the right-of-way for Northforest Drive N79 (degrees)
08'49"E for 512.86 feet to a point; thence turning and
continuing in an eastern and southeastern direction along
the right-of-way for Northforest Drive along a curve for a
distance of 43.98 feet (said curve having a radius of 28.00
feet) to a point on the western boundary of the
right-of-way for Northside Drive, this being the POINT OF
BEGINNING.
TMS NO.: 484-00-00-025 and a portion of 484-00-00-068
The two above-described parcels of land being combined upon
that survey prepared by E.M. Seabrook, Jr., South Carolina
Civil Engineer and Land Surveyor, on the 20th day of
February, 1989.
66
<PAGE>
DERIVATION: Master's Deed by Louis E. Condon, as Master in
Equity for Charleston County, recorded June 23, 1993 in the
Office of the RMC for Charleston County in Book O228 at page
019.
67
<PAGE>
EXHIBIT A-8
TRACT I. All that tract or parcel of land lying and being in the
City Albany, Dougherty County, Georgia, and being more
Particularly described as follows:
Begin at the intersection of the North right of way line of
the Seaboard Airline Railroad and the East right of way line of
Slappey Drive, and run thence North 05" 05' West along the East
right of way of Slappey Drive for a distance of 32.68 feet to a
point run thence South 88" 52' East a distance of 90.0 feet to a
point3 run thence South 0l" 08' West for a distance of 95.28 feet
to a point on the North right of way line of the Seaboard Airline
Railroad, run thnce North 52"57'15" West along the North right of
way line of the Seaboard Airline Railroad for a distance of
106.73 feet to the point of beginning. Said property is a portion
of Lot 48 of the Palmyra Pecan Grove Subdivision "C" and more
particularly described on a plat entitled "Turnpike Properties,
Inc." prepared by Malcolm Burnsed, R.L.S. on the 6th day of
March, 1989.
TRACT II. All that tract or parcel of land lying in the
City of Albany, Dougherty County, Georgia, and being more
particularly described as follows:
Beginning at a point in e the southern right of way line of
a Seaboard Airline Railroad side track, said point being South 88
(degrees) 52' East 275.00 feet from Slappey Drive at its point of
intersection with said side track right of way; and running
thence from said beginning point along the southern and western
right of way line of said side track right of way the five (5)
following courses and distances: South 88 (degrees) 52' East
146.25 feet, the PC of a curve; thence to a southeasterly
direction, along a curve with a radius of 296.31 feet, for a
distance of 465.11 feet to the PT of curve; South 88 (degrees)
42' East 6.0 feet; South 01 (degrees) 12' West 257.33 feet to the
PC of a curvee; and in a Southeasterly direction, along a curve
with the radius of 391.51 feet for a distance of 136.45 feet to
the North right of way line of the Seaboard Airline Railroad;
thence along the northern right of way line of the Seaboard
Airline Railroad North 52~ 57' 15" West 582.32 feet to a point;
thence North 01~ OS' East 345.44 feet to the point and place of
68
<PAGE>
the beginning, and being that same property surveyed and plated
by Malcoln Burnsed, R.L.S. on the 6th day of March, 1989.
EXHIBIT A-8 (continued)
NOTE: The following described easments: granted by Clinton Miles
to Turnpike Properties, Inc. are appurtenances of Tract II:
(a) A perpetual easement for ingress and egress from
Slappey Drive over and across all that tract or parcel of land
lying and being in the City of Albany, Dougherty County, Georgia,
being more particularly described as follows: All that tract or
parcel of land lying and being a part of Tract 48 Subdivision
"G", Palmyra Pecan Groves, and being more particularly described
as follows: COMMENCE at the intersection of the East right of way
line of Slappey Drive and the north right of way line of the
Seaboard Airline Railroad in Albany, Georgia, and run thence
North 05.05' West for a distance of 32.68 feet to the point of
beginning. From said point of beginning continuethence North 05
(degrees) 05' West along the East right of way line of Slappey
Drive for a distance of 30.07 feet to a point; run thence South
88 (degrees) 52' East for a distance of 264.54 feet to a point;
run thence South 01 (degrees) 08' West for a distance of 30.0
feet to a point; run thence North 88 (degrees) 52' West for a
distance of 261.27 feet to the point of beginning, and being the
same property surveyed and plated by Malcolm Burnsed, R.L.S. as
shown upon that certain plat entitled "Turnpike Properties, Inc."
dated March 6, 1989.
(b) A perpetual easement for the purpose of installing both
underground and overhead, utility line and mains, including but
not limited to, water, gas, sewer, electrical, and telephone
lines and mains, over and across that certain 2O-foot strip of
property more particularly described as follows: COMMENCE at the
intersection of the East right of way line of Slappey Drive and
the North right of way line of Seabord Airline Railroad in
Albany, Georgia, and run thence South 52 (degrees) 57' 15" East a
distance of 106.73 feet along the North right of way line of the
Seaboard Airline Railroad to the point of beginning; continue
thence South 52 (degrees) 57' 15" East a distance of 211.45 feet
along the North right of way line of the Seabord Airline Railroad
to a point; run thence North 01 (degrees) 08' East a distance of
69
<PAGE>
24.69 feet to a point; run thence North 52 (degrees) 57' 15" West
along a line parallel to the North right of way line of the
Seabord Airline Railroad for a distance of 211.45 feet to a
point; run thence South 01 (degrees) 08' West for a distance of
24.69 feet to the point of beginning. Said strip of land is
located in Lots 48 and 66 of Palmyra Pecan Grove Subdivision "C"
and being the sane property surveyed and
70
<PAGE>
plated by Malcolm Burnsed, R.L.S. and shown upon that certain
plat entitled "Turnpike Properties, Inc." dated March 5, 1989.
71
<PAGE>
EXHIBIT A-9
ALL THAT certain tract, piece or parcel of land, with the
buildings and improvements thereon and the appurtenances
thereunto belonging, lying, situated and being in Bayside
Borough, Virginia Beach, Virginia, fronting on Northampton
Boulevard and Baker Road, and described by reference to a certain
plat and survey thereof, made by Frank D. Tarrall, Jr. and
Associates, Surveyors and Engineers, marked "Subdivision of
Property for Shell Oil Company:, dated October, 1967, and
recorded in the Clerk's Office of the Circuit Court of the City
of Virginia Beach, Virginia, in Map Book 30, page 8, which said
property is more particularly described as follows:
BEGINNING at a pin on the southeast corner of Baker Road and
Northampton Boulevard; thence along the southern line of
Northampton Boulevard, N 51 (degrees) 00' 00 (degrees) E 191.50
feet to a pin at the dividing line between Parcel A and Parcel B,
the pint of beginning of this description and from said point of
beginning rnnning thence along the southern side of Northampton
Boulevard, N 51 (degrees) 00' 001 E. 135.41 feet to a pin at the
western line of "Property now or formerly Lucy V. Dobski", S 38
(degrees) 57' 00 E 171.84 feet to a pin; thence continuing along
the said line the following courses and distances; N 51 (degrees)
03' 00 (degrees) E 150.00 feet to a pin; thence turning and
running S 9 (degrees) 50'00E 407.50 feet to a pin; thence turning
and running S 76 (degrees) 20' 0 (degrees) W 511.94 feet to a pin
on the east side of Baker Road; thence along the eastern side of
Baker Road N 07 degrees 20' 19" W 199.87 feet to a pin on the
dividing line between Parcel A and Parcel B; thence turning and
running along said dividing line the following courses and
distances; N 82 (degrees) 38' 00 E 49.86 feet to a pin; thence N
51 (degrees) 00' 00 E 228.57 feet to a pin; thence turning and
running N 38 (degrees) 57' 00 (degrees) W 165.00 feet to a pin,
the point of beginning; the above described Parcel "B" containing
3.34 acres.
LESS AND EXCEPT those strips of land conveyed to the Commonwealth
of Virginia in Deed Book 2716, Page 1323 and Deed Book 2750, Page
1387.
Being that same property platted by Baldwin & Gregg, Ltd. on the
9th day of February,
1989.
72
<PAGE>
73
<PAGE>
EXHIBIT A-10
1306 Elba Street:
LYING AND BEING in Durham Township, Durham County, State of North
Carolina, and beginning at an iron stake at the point of
intersection of the southern right of way line of rider Street
with the western right of way line of Fulton Street, said iron
stake being South 66 (degrees) 19' 13" East 61.71 feet from the
point of intersection of the center line of rider Street with the
center line of Fulton Street; and running thence from said
beginning iron stake, along the southern right of way line of
Elder Street, North 89 (degrees) 46' 52" East 200.76 feet to an
iron stake; thence South 01 (degrees) 09' 09" West 219.43 feet to
an iron stake in the northern right of way line of Elba Street;
thence along the northern right of way line of Elba Street North
89 (degrees) 59' 46" West 197.54 feet to an iron stake; thence
along the western right of way line of Fulton Street the three
(3) following courses and distances: North 41 (degrees) 41' 04"
West 26.66 feet; North 00 (degrees) 37' 05" East 180.00 feet; and
North 42 (degrees) 13' 46" East 25.27 feet to the point and place
of the beginning, same being that same property surveyed and
platted by James S. Murphy, R.L.S. on the 14th day of February,
1989, and being the majority of that certain property as set out
upon that plat and survey entitled "Property of Turnpike
Properties, Inc." dated February 4, 1983, revised October 19,
1983, and recorded in Plat Book 104 at Page 107 in the Office of
the Register of Deeds of Durham County, North Carolina.
400 Elf Street:
LYING AND BEING in Durham Township, Durham County, State of North
Carolina, and beginning at a stake at the point of intersection
of the South side of Pratt Street with the West side of Elf
Street, as shown on plat and survey hereinafter referred to, and
running thence along and with the West side of Elf Street South 0
(degrees) 57' 0" West 176.04 feet to a stake in the northern
right of way of Elder Street; running thence along and with the
northern right of way of Elder Street South 89 (degrees) 48' 0"
West 99.88 feet to a stake; running thence North 0 (degrees) 58'
0" East 173.10 feet to a stake in the southern right of way of
Pratt Street; running thence along and with the southern right of
way of Pratt Street North 88 (degrees) 07' on East 99.93 feet to
a stake, the point and place of beginning, and being that same
74
<PAGE>
property surveyed and platted by James S. Murphy, R.L.S. on the
14th day of February, 1989.
EXHIBIT A-II
LYING AND BEING in Raleigh Township, Wake County, State of North
Carolina:
BEGINNING at a point in the Southwest line of Navaho Drive,
said stake marking the northwest corner of Tract 1 according to
the plat hereinafter referred to; runs thence South 25 (degrees)
14' 55" West 305.98 feet along the West line of Tract 1 to an
iron stake, the Southwest corner of Tract 1; runs thence South 64
(degrees) 46' 05" East 142.45 feet along the South line of Tract
1 to an iron stake in the Northwest line of the right of way of
Wake Forest Road; runs thence 131.10 feet along the curve of the
Northwest right of way line of Wake Forest Road, said curve
having a radius of 2,826.47 feet to the right to an iron stake;
thence continuing with the Northwest line of the right of way of
Wake Forest Road South 31 (degrees) 13' 55" West 65.97 feet to an
iron stake in said right of way; thence North 67 (degrees) 24"
47" West 561.32 feet along the right of way of the entrance ramp
for U.S. Highways 1 and 64 to a stone monument; thence continuing
with said right of way of said entrance ramp North 67 (degrees)
15' 53" West 119.39 feet to an iron stake, the Southeast corner
of Tract 3 according to the plat hereinafter referred to; runs
thence North 25 (degrees) 13' 55" East 227.37 feet along the
Eastern line of Tract 3 to an iron stake; runs thence South 64
(degrees) 46' 05" East 525.12 feet to an iron stake, the same
marking the Southeast corner of Lot A according to a plat
recorded in Book of Maps 1974, Page 165; runs thence North 25
(degrees) 14' 55" East 312.94 feet to an iron stake in the
Southwest line of Navaho Drive; runs thence South 5l (degrees)
42' 5" East 30.80 feet with the Southwest line of Navaho Drive to
an iron stake, the point and place of BEGINNING, being all of
Tract 2 and containing 155,239 square feet or 3.65 acres
according to a plat entitled "Property of B & W Associates,
Raleigh, N.C.", prepared by John A. Edwards and Company,
Consulting Engineers, dated March 8, 1983, and recorded in Book
of Maps 1983, Page 379, Wake County Registry.
In addition to said tract, the Grantors hereby convey to
the Grantee, its successors and assigns, a perpetual easement for
ingress and egress over that 30-foot portion of Tract 3
(described on the plat mentioned above) extending from the
75
<PAGE>
Northwest corner of said Tract 2 Westwardly and Northerly to the
South line of Navaho Drive, said land being shown by dotted lines
and being designated "Easement 'D'/private drive" on said
recorded plat.
76
<PAGE>
All of the above was surveyed and platted by John A.
Edwards, Jr., R.L.S. on the 6th day of March, 1985, and
recertified on the 14th day of February, 1989.
77
<PAGE>
EXHIBIT A-12
Lying and being in Charlotte Township; Mecklenburg County,
State of North Carolina:
PARCEL I
Beginning at an iron pin located at the westernmost corner
of that property conveyed to E. A. Flowe by deed recorded in Book
4548 at Page 782 in the Mecklenburg Public Registry; and running
thence with the south boundary of the Flowe property (now or
formerly) South 80 (degrees) 49' 2201 East 144.24 feet to an iron
pin in the western right of way line of the 1-85 Service Road;
thence along the western right of way line of the 1-85 Service
Road in a southerly direction along a circular curve to the left
having a radius of 388.10 feet and an arc distance of 84.00 feet
to an iron pin; thence continuing along said right of way line
South 11 (degrees) 07' 30" East 222.67 feet to an iron pin;
thence continuing along said right of way line as it curves to
the right in a southerly and westerly direction with the arc of
the circular curve having a radius of 147.81 feet and an arc
distance of 260.73 feet to an iron pin; thence continuing along
said right of way line South 89 (degrees) 56' 26" West 138.44
feet to an iron pin at the beginning of the intersection of the
north right of way line of the 1-85 Service Road with the east
right of way line of Sugar Creek Road; thence North 44 (degrees)
24' 25" West 15.36 feet to an iron pin in the eastern right of
way line of Sugar Creek Road; thence along said right of way line
the two (2) following courses and distances: North 00 (degrees)
08' 43" West 413.97 feet to a concrete monument; and North 53
(degrees) 15' 42" East 127.99 feet to the point and place of
beginning, same containing 2.939 acres, more or less, and being
that same property surveyed and platted by R. B. Pharr &
Associates, P.A. on the 21st day of February, 1989, and revised
March 8, 1989.
PARCEL II
Beginning at an iron located at the northeast corner of
that property conveyed to TBAA, Inc. by deed recorded in Book
4593 at Page 180 in the Mecklenburg Public Registry, and running
thence from said beginning point partially with the North
boundary of the TBAA, Inc. property (now or formerly), South S9
(degrees) 56' 26" West 350.22 feet to a concrete monument in the
south margin
78
<PAGE>
of the I-95 Service Road right of way; thence with the south
margin of said right of way, four (4) lines as follows: (1) North
56 (degrees) 35'47" East 133.66 feet to an iron pin, (2) in a
northerly direction with the arc of a circular curve to the left
having a radius of 207.81 feet, an arc distance of 248.16 feet to
an iron pin, (3) North 1l (degrees) 07' 30" West 222.67 feet to a
point, and (4) in a northerly direction, with the arc of a
circular curve to the right having a radius of 328.1 feet, an arc
distance of 62.67 feet to an iron; thence with a southerly
boundary of Property conveyed to Sree Incorporated by deed
recorded in Book 4407 at Page 971 in the Mecklenburg Public
Registry, South 80 (degrees) 49' 22" East 6.85 feet to an iron;
thence South 18 (degrees) 25' 22" East 597.95 feet to the iron at
the point of beginning, same containing 1.194 acres, more or
less, and being that same property surveyed and platted by R. B.
Pharr & Associates, P.A. on the 21st day of February, 1989, and
revised March 8, 1989.
PARCEL III
All the right, title and interest of Grantor in and to that
property lying within the I-85 Service Road right of way which
separates Parcels I and II, above, and in and to the right of way
of that portion of the Sugar Creek Road right of way which
adjoins Parcel I on the west side of said tract, both of which
streets or roads are shown on survey prepared by R. B. Pharr &
Associates, P.A. dated February 21, 1989, and revised March 8,
1989.
79
<PAGE>
EXHIBIT B
[List of Contracts]
80
<PAGE>
FAIRFIELD INN RICHMOND
CONTRACTS/LEASES
VENDOR SERVICE COST
Lodgenet Free to guest television program $311/mo.
Lodgenet Pay per view movies 5% profit
share plus
television
maintenance
Exit Information Advertising $3,327/yr
Guide
Walker's Service Grounds Maintenance $789/mo.
Terminix Pest Control $126/mo.
IBM/Marriott PMS service contract $1,341
AAA Advertising $4,173/yr
Browining-Ferris Rubbish Hauling $242/mo.
DSEA Reservations shopping reports $105/mo.
Equifax Check guarantee service $60/yr plus
$12/mo and
1.35% of
check value
ADP Payroll Processing $100 per pay
period
General Electric, HVAC repairs Varies with
Consumer task, see
Services agreement
Hotelecom Phone system consultant % of revenue,
see agreement
CANCELLATION STATUS
81
<PAGE>
April, 2002 Salomon has copy
April, 2002 Salomon has copy
Annual renewal Already pd thru June 1997
30 day notice Copy included
30 day notice AGHI
Franchise required With franchise agreement, no contract
Annual renewal Already pd thru 1997
30 day notice Verbal, no contract
30 day notice AGHI
30 day notice AGHI
30 day notice AGHI
60 days written
or 10 days by Copy included
G.E. w/change
of ownership
30 days notice Agreement still pending,
will copy upon execution
82
<PAGE>
FAIRFIELD INN DURHAM RTP
CONTRACTS/LEASES
VENDOR SERVICE COST
Lodgenet Free to guest television program $255.42/mo.
Lodgenet Pay per view movies 5% profit
share plus
television
maintenance
Cape Fear Paging Pager air time $11.40/mo.
NC Dept. of Highway sign advertising $882/yr.
Transportation
Turf Service Grounds Maintenance $560.00
Terminix Pest Control $96/mo.
IBM/Marriott PMS service contract $1,296/yr.
AAA Advertising $3,645/yr.
Waste Industries Rubbish Hauling $105.50/mo.
Hotelecom Telephone consultant % of revenue,
see agreement
Dover Electronics Elevator service contract $158.77/mo.
DSEA Reservations Shopping report $105/mo.
Equifax Check guarantee service $60/yr plus
$12/mo and
1.35% of
check value
ADP Payroll processing $100 per pay
period
General Electric HVAC Services prices vary,
see agreement
83
<PAGE>
CANCELLATION STATUS
April, 2002 Salomon has copy
April, 2002 Salomon has copy
30 day notice Monthly billing like phone bill
30 day notice Copy included
30 day notice Copy included
30 day notice Copy included, AGHI
Franchise With Franchise agreement,
required no contract
Annual renewal Already pd thru 1997
90 day notice Copy included
prior to end of
term of contract
which is 1/19/01
30 day notice Agreement still pending,
copy will be sent when executed
5 yr contract Copy included
last renewed
1988, 90 day
written notice
30 day notice AGHI
30 day notice AGHI
30 day notice AGHI
60 day notice Copy included
84
<PAGE>
FAIRFIELD INN CARY
CONTRACTS/LEASES
VENDOR SERVICE COST
Lodgenet Free to guest television program $382.58/mo.
Lodgenet Pay per view movies 5% profit
share plus
television
maintenance
A-Plus Pager $23.90/mo
Communication
Cape Fear Paging Pager $17.96/mo.
NC Dept. of Highway sign advertising $588/yr.
Transportation
General Electric HVAC service and replacement $753.51/mo.
#133-0812328
Turf Service Grounds Maintenance $767/mo
IBM/Marriott PMS service contract $1,296/yr
every June
AAA Advertising $3,648/yr.
BMI Rubbish Hauling $364.55/mo.
Hotelcom Telephone Consultant % of revenue,
see agreement
DSEA Reservations Shopping reports $105/mo.
Equifax Check guarantee service $60/yr. plus
$12/mo. and
1/35% of
check value
ADP Payroll processing $100 per pay
period
85
<PAGE>
Terminix Pest Control $126/mo.
CANCELLATION STATUS
April, 2002 Salomon has copy
April, 2002 Salomon has copy
30 day notice air time only, monthly bill,
like phone bill no contract
30 day notice Copy included
Annual renewal Copy included
July, 1998 Contract copy requested from provider
30 day notice Copy included
Franchise with franchise agreement,
required no contract
Annual renewal Already pd thru 97
30 day notice
30 day notice agreement pending will copy when executed
30 day notice AGHI
30 day notice AGHI
30 day notice AGHI
30 day notice AGHI
86
<PAGE>
FAIRFIELD INN CARY
CONTRACTS/LEASES
VENDOR SERVICE COST
Lodgenet Free to guest television program $539.09/mo.
Lodgenet Pay per view movies 5% profit
share plus
television
maintenance
Appalachian Billboard $595/mo.
Appalachian Billboard $920/mo.
General Electric HVAC service and replacement $744.52/mo.
Exit Information Advertising $3,311/yr
Guide
Terminix Pest Control $121/mo.
IBM/Marriott PMS service contract $1,298/yr.
AAA Advertising $4,184/yr.
Wilson Security Security $9.00/hr.
Container Corp. Rubbish Hauling $121.12/mo.
Hotelecom Telephone Consultant % of revenue,
see agreement
DSEA Reservations Shopping reports $105/mo.
Equifax Check Guarantee service $60/yr. plus
$12/mo. and
1.35% of
check value
ADP Payroll processing $100 per pay
period
87
<PAGE>
CANCELLATION STATUS
July, 2002 Salomon has copy
July, 2002 Salomon has copy
60 day notice Copy included
60 day notice Copy included
60 day notice Copy included
February, 1998 Copy included
Annual renewal Already pd thru 6/97
30 day notice AGHI
Franchise With franchise agreement, no contract
required
Annual renewal, Already pd through 6/97
pd 6/96
30 day notice Copy included, price increase
was in January 1996
60 day notice in Copy included
advance of
contract end,
9/5/97
30 day notice Agreement still pending,
Will upon execution
30 day notice AGHI
30 day notice AGHI
30 day notice AGHI
88
<PAGE>
FAIRFIELD INN WILMINGTON
CONTRACTS/LEASES
VENDOR SERVICE COST
Lodgenet Free to guest television program $319/mo.
Lodgenet Pay per view movies 5% profit
share plus
television
maintenance
Page South Pager air time & equipment rental $76/mo
Whiteco Billboard $595/mo
General Electric, HVAC service & replacement $749.10/mo
Exit Information Advertising $3,576
Guide
Wilsons Grounds Maintenance $850/mo
Orkin Pest Control $122/mo
IBM/Marriott PMS service contract $1,296/yr
AAA Advertising $3,648/yr
Waste Industries Rubbish Hauling $294/mo.
Hotelecom Telephone consultant % of revenue,
see agreement
DSEA Reservations shopping reports $105/mo.
Equifax Check guarantee service $60/yr plus
$12/mo and
1.35% of
check value
ADP Payroll Processing $100 per pay
period
89
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CANCELLATION STATUS
April, 2002 Salomon has copy
April, 2002 Salomon has copy
30 day notice, Copy included
prior to the end
of contract
period which end
2/26/97. Penalty
of $50.00 per
pager if cancelled
earlier.
60 day notice Copy included
July, 1998 Copy included
Annual renewal Already pd thru 6/97
30 day notice Copy requested from vendor
30 day notice AGHI
Franchise With Franchise agreement,
required no contract
Annual renewal Already pd thru 19/97
30 day notice Copy included
30 day notice agreement pending, will
copy upon execution
30 day notice AGHI
30 day notice AGHI
30 day notice AGHI
90
<PAGE>
FAIRFIELD INN COLUMBIA
CONTRACTS/LEASES
VENDOR SERVICE COST
Lodgenet Free to guest television program $339.98/mo.
Lodgenet Pay per view movies 5% profit
share plus
television
maintenance
A+ Communic Pager air time $102.92/mo
Outdoor East Billboard I20 $850/mo
Outdoor East Billboard I77 $800/mo
3M National Billboard I20 East $650/mo
Kingstowne Billboard I20 ex 74 $500/mo
Fowler Billboard $560/mo
General Electric HVAC services and replacement $758.87
Exit Information Advertising $2,845/yr
Guide
Greenscape Grounds Maintenance $500/mo.
Orkin Pest Control $130/mo
IBM/Marriott PMS service contract $1,296/yr
AAA Advertising $4,184/yr
Waste Management Rubbish Hauling $111.20/mo.
Ampro Security $9.13/hr.
Property Telephone Maint $333.50
Technologies
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Hotelecom Telephone Consultant % of revenue,
see agreement
DSEA Reservations Shopping Reports $105/mo.
Equifax Check guarantee service $60/yr plus
$12/mo and
1.35% of
check value
ADP Payroll processing $100 per pay
period
CANCELLATION STATUS
July, 2002 Salomon has copy
July, 2002 Salomon has copy
30 day notice Copy included
1/15/97 60 day Copy included
notice
1/25/97 60 day Copy included
notice
1/18/97 60 day Copy included
notice
1/5/97 60 day Copy included
notice
Cancelled Letter attached
12/31/95
July, 1998 Copy included
Annual renewal Already paid thru 6/97
30 day notice Copy included
30 day notice AGHI
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Franchise With Franchise agreement,
required no contract
Annual renewal Already pd thru 1997
30 day notice Verbal contract
30 day notice Copy included
Expired 8/3/96 Copy included
30 day notice Agreement ending, will send copy upon execution
30 day notice AGHI
30 day notice AGHI
30 day notice AGHI
93
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FAIRFIELD INN CHARLESTON
CONTRACTS/LEASES
VENDOR SERVICE
Lodgenet Free to guest television program
Lodgenet Pay per view movies
3M National Billboard
3M National Billboard
General Electric HVAC service and replacement
Exit Information Advertising
Guide
Nancy's Grounds Maintenance
Terminix Pest Control
IBM/Marriott PMS service contract
AAA Advertising
Pegasus Security
F??? Rubbish Hauling
Hotelecom Telephone Consultant
DSEA Reservations Shopping reports
Equifax Check guarantee service
ADP Payroll processing
Milia Copier lease
COST CANCELLATION
$317/mo. April, 2002
94
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5% profit share plus television April, 2002
maintenance
$1,575/mo. 60 day notice
$1,800/mo. 60 day notice
$744.52/mo. July, 1998
$2,845/yr. Annual renewal
$550/mo. 30 day notice
$112/mo. 30 day notice
$1,296/yr. every June Franchise required
$3,648/yr. Annual renewal
$412/wk. 30 day notice
$180.10/mo. 30 day notice
% of revenue see agreement 30 day notice
$105/mo. 30 day notice
$60/yr. plus $12/mo. and 1.35% of check 30 day notice
value
$100 per pay period 30 day notice
$57.52 36 month, end 8/9/99
STATUS
Salomon has copies
Salomon has copies
copy attached
copy attached
95
<PAGE>
copy attached
Already pd thru 6/97
copy attached
AGHI
part of franchise agreement, no contract
Already pd thru 1997
copy attached
copy attached
contract still pending, will forward upon execution
AGHI
copy attached, AGHI
AGHI
copy included
96
<PAGE>
FAIRFIELD INN ALBANY
CONTRACTS/LEASES
VENDOR SERVICE
Lodgenet Free to guest
television program
Lodgenet Pay per view movies
Radiofono of GA Pager air time
Franklin Advertising Billboard
All Star Int'l Trucks Billboard
Tri-State Systems Billboard
General Electric HVAC service and
replacement (???)
133-0812331
Exit Information Guide Advertising
Stadnik, Inc. Grounds Maintenance
Terminix Pest Control
IBM/Marriott PMS service contract
AAA Advertising
Hotelcom Telephone Consultant
DSEA Reservations Shopping
reports
Equifax Check guarantee service
ADP Payroll processing
COST CANCELLATION
97
<PAGE>
$525.82/mo July, 2002
5% profit share plus television July, 2002
maintenance
$17/mo. 30 day notice
$275/mo. 60 day notice
$588/yr. 60 day notice
$407.66/mo. 60 day notice
$742.73/mo. July, 1998
$1,365/yr. Annual renewal
$550/mo. 30 day notice
$122/mo. 30 day notice
$1,296/yr. every June Franchise required
$3,648/yr. Annual renewal
% of revenue see agreement 30 day notice
$105/mo. 30 day notice
$60/yr. plus $12/mo. and 1/35% of stock 30 day notice
value
$100 per pay period 30 day notice
STATUS
Salomon has copy
Salomon has copy
verbal, like phone bill
Copy included
98
<PAGE>
Contract attached
Contract attached
Contract not available, we have requested copy
Already pd thru 6/97
Verbal, 30 day out
AGHI
with franchise agreement, no separate agreement
Already pd through 1997
Agreement pending, will copy upon execution
AGHI
AGHI
AGHI
99
<PAGE>
CRICKET INN VIRGINIA BEACH
CONTRACTS/LEASES
VENDOR SERVICE
World Cinema Free to Guest television
program
Metro-Call Pager air time &
equipment rental
Exit Information Guide Advertising
Tidewater Landworks Grounds Maintenance
Orkin Pest Control
Command Force Security
BFI Rubbish Hauling
JC Penney Reservations system
Hotelecom Telephone Consultant
SQS Guest Satisfaction
survey/report
DSEA Reservations shopping
report
Equifax Check guarantee service
ADP Payroll processing
General Electric HVAC maintenance
Consumer Services
COST CANCELLATION
$655.56/mo. 11/13/96 with 90 day
notice, or with 90
100
<PAGE>
days notice prior to the
end of any current contract
year
$26.90/mo. 30 day notice
$4,547/yr. Annual renewal
$825/mo. 30 day notice
$147.80/mo. 30 day notice
$441/wk. 30 day notice
$608.97/mo. 60 day notice
Based on the number of calls
% of revenue, see agreement 30 day notice
$110/mo. 30 day notice
$105/mo. 30 day notice
$60/yr plus $12/mo. and 1.35% of check 30 day notice
value
$100 per pay period 30 day notice
Varies with task, see
agreement 60 days
notice by either
party, 10 days
notice by GE upon
ownership change
STATUS
Copy included
Copy included
Already pd thru 6/97
101
<PAGE>
Copy included
AGHI
Copy included
Copy included
Agreement pending, will copy upon execution
AGHI
AGHI
AGHI
AGHI
Copy included
102
<PAGE>
CRICKET INN DURHAM DUKE
CONTRACTS/LEASES
VENDOR SERVICE
Lodgenet Free to guest television
program
Lodgenet Pay per view movies
Cape Fear Paging Pager air time
3M Billboard
Hogan Billboard
Billboards
Orkin Pest Control
National Guest Systems PMS interface service
AAA Advertising
Waste Management Rubbish Hauling
Carter Security Security
JC Penney Reservations System
Hotelecom Telephone consultant
Dover Elevator Elevator service contract
Sprint Cellular Renting space on roof for
antenna
SQS Guest Satisfaction
survey/report
DSEA Reservations Shopping
Report
Equifax Check guarantee service
103
<PAGE>
ADP Payroll Processing
Bond Publishing Advertising, Hosp.
Directory
Teacher @ work Landscaping
GE Consumer HVAC repair
COST CANCELLATION
$358/mo. October, 2002
5% profit share plus television October, 2002
maintenance
$40/mo. 30 day notice
$936/mo. 60 day notice
$988/mo. 60 day notice
$151/mo. 30 day notice
$179/mo. 30 day notice
$4,264/yr. Annual renewal
$190/mo. 60 day notice prior
to renewal date
11/7/96
$600/mo. 30 day notice
Based on number of calls
% of revenue, see agreement 30 day notice
$605/mo. 90 day notice prior
to March, 1997
$500/mo. revenue January, 2016
104
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$110/mo. 30 day notice
$105/mo. 30 day notice
$60/yr plus $12/mo. and 1.35% of check 30 day notice
value
$100 per pay period 30 day notice
$3100/year pd through 7/97
task billed 30 days
varies, see agreement 60 days/non-tranferrable
STATUS
Copy included
Copy included
Copy included
Copy included
Copy requested from vendor
AGHI
Copy included
Already pd thru 1997
Copy included
Copy included
agreement pending, will copy when executed
105
<PAGE>
Copy included
Copy included
AGHI
AGHI
AGHI
AGHI
Copy included
verbal
Copy included
CRICKET INN RALEIGH
CONTRACTS/LEASES
VENDOR SERVICE
Lodgenet Free to guest television
program
Lodgenet Pay per view movies
Cape Fear Paging Pagers
Thomas Advertising Billboard
General Electric HVAC service and
replacement,???
133-0812316
Orkin Pest Control
Wackenhut Security Security
BFI Rubbish Hauling
JC Penney Reservation System
106
<PAGE>
Hotelecom Telephone Consultant
The Griffon Military newspaper
advertisement
SQS Guest Satisfaction
survey/report
DSEA Reservations shopping
reports
Equifax Check guarantee service
ADP Payroll processing
COST CANCELLATION
$352.98/mo. October, 2002
5% profit share plus television October, 2002
maintenance
$48.09/mo. 30 day notice after
8/10/96
$947.50/mo. 30 days upon sale of
hotel
$896.66/mo June, 1998
$150/mo. 30 day notice
$8.50/hr. Approx. $1,130 mo. 30 day notice
$264.14
Based on the number of calls
% of revenue, see agreement 30 day notice
$440 in April Annual renewal
$440 in August
107
<PAGE>
$110/mo 30 day notice
$105/mo. 30 day notice
$60/yr plus $12/mo. and 1.35% of check 30 day notice
value
$100 per pay period 30 day notice
STATUS
Copy included
Copy included
monthly billing
Copy included
Copy requested from vendor
AGHI
Copy requested from vendor
Copy requested from vendor
agreement pending, copy to be sent upon execution
Copy included
AGHI
AGHI
AGHI
AGHI
108
<PAGE>
CRICKET INN CHARLOTTE
CONTRACTS/LEASES
VENDOR SERVICE
Time Warner Cable Free to guest television
program
Page South Pager air time &
Equipment Rental
3M National Billboards
Horizon Billboards
Adams Billboards
General Electric HVAC service
Exit Information Guide Advertising
Carolina Landscape Grounds Maintenance
Terminix Pest Control
Charlotte Police Dept. Security
General Emergency Security monitor
Monitor
Container Corp. Rubbish Hauling
JC Penney Reservation System
Hotelecom Telephone Consultant
DSEA Reservations Shopping
Reports
Equifax Check guarantee service
ADP Payroll processing
109
<PAGE>
COST CANCELLATION
$1,039.50/mo. 30 day notice
$45.58/mo. 30 day notice
$1,360/mo. 60 day notice
$1,200/mo. 60 day notice
$1,843/mo. 60 day notice
$928.87/mo. July, 1997
$2,845/yr. Annual renewal/pd through
June 1997
$450/mo. 30 day notice
$132/mo. 30 day notice
$15.50/hr. @ 8 hours per day 30 day notice
$60/qtr. 30 day notice
$282.04/mo. 180 day notice prior to
end of term which is 3/20/01
Based on number of calls
% of revenue, see agreement 30 day notice
$105/mo. 30 day notice
$60/yr. plus $12/mo. and 1.35% of check 30 day notice
value
$100 per pay period 30 day notice
STATUS
Copy included
110
<PAGE>
Copy included
Copy included
Copy included
Copy included
Copy included
Copy included
Copy included
Copy included, AGHI
Verbal agreement, contract individual labor
Verbal, no contract
Copy included
agreement pending, will forward when executed
AGHI
AGHI
AGHI
111
<PAGE>
EXHIBIT C
EXCLUDED ASSETS
1. The management contract between Sellers and American General
Hospitality Inc. ("Manager").
2. World Cinema and Lodgenet television decoders.
3. Any and all vending machines, including, without limitation,
newspaper vending machines.
4. Any and all pagers used by employees of Manager.
5. Manager's manuals and forms relating to the management of, or
located at, each of the Properties.
6. Credit card processing equipment.
7. Manager's computer software and any and all other property of
Manager.
8. Property belonging to hotel guests, invitees or licensees.
9. Property owned by the lessor under the Statesville Ground Lease.
10. Any and all contracts, licenses, permits, etc. which, by their
terms, are not assignable.
11. Any and all tradenames, trademarks, intellectual property,
manuals and other property of the franchisors under the Franchise
Agreements.
112
<PAGE>
EXHIBIT D
PROMISSORY NOTE
$___________ New York, New York
Dated: As of _________ ___, 1996
FOR VALUE RECEIVED, Hudson Hotels Corporation, a New York
corporation with offices at One Airport Way, Suite 200,
Rochester, New York 14624 ("Borrower") promises to pay to [SB
Motel Richmond Corp., SB Motel Durham-Research Triangle Park
Corp., SB Motel Cary Corp., SB Motel Statesville Corp., SB Motel
Wilmington Corp., SE Motel Columbia Corp., SB Motel Charleston
Corp., SE Motel Albany Corp., SB Motel Virginia Beach Corp., SB
Motel Durham-Duke Corp., SB Motel Raleigh Corp. and SB Motel
Charlotte 1-85 Corp.] [Sellers shall have the right to name any
designee as the Lender at any time prior to the Closing]
(collectively, "Lender"), or order, at __________________ or at
such other place in the United States of America as may be
designated in writing by the holder of this note (this "Note"),
the sum of ______________________ ($_______) Dollars, together
with Interest as hereinafter provided, until the said principal
sum shall be fully paid, and to be due and payable as hereinafter
provided. The said principal sum, or the amount thereof
outstanding, together with accrued and unpaid interest and all
other unpaid sums payable hereunder, shall be due and payable on
the Maturity Date (as hereinafter defined) or as otherwise
expressly provided herein. Borrower may make voluntary
prepayments of principal in accordance with Section 3 hereof.
1. Definitions. The following terms, as used in this Note,
shall have the following meanings, which shall be applicable equally
to the singular and the plural of the terms defined:
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which federally insured depository
institutions in the State of New York are authorized or obligated
by law, governmental decree or executive order to be closed.
"Event of Default" shall mean (i) any failure of Borrower
to pay any amounts due and payable pursuant to this Note within
five (5) Business Days after the due date thereof, (ii) any
default by Borrower under the Senior Indebtedness (as hereinafter
defined) which shall
113
<PAGE>
entitle Nomura Asset Capital Corporation (or any successors or
assigns thereof) to accelerate all principal indebtedness
evidenced by the Senior Indebtedness or (iii) financial
difficulties of Borrower or any subsidiary of Borrower as
evidenced by (x) the filing of a voluntary or involuntary
petition in bankruptcy or under any chapters of the Bankruptcy
Code or under any federal or state statute providing for relief
of debtors, (y) the making of an assignment for the benefit of
creditors or (z) the appointment of a receiver or trustee for all
or a major part of its property.
"Maturity Date" shall mean November 27, 1997.
2. Interest. (a) Interest at the rate of ten percent (l0%)
per annum on the unpaid principal ("Interest") shall be due and
payable in arrears on the first day of each month following the date
of this Note. Interest accruing under this Note shall be computed on
the basis of a 360-day year for the actual number of days elapsed.
(b) Borrower shall pay principal, Interest and all other
sums due hereunder in immediately available funds to Lender at
____________________ or otherwise as directed in writing by
Lender. Payments hereunder shall be due prior to 3:00 P.M.
(Eastern Standard Time) on the date on which payment shall be
due. Lender may apply payments received in respect of Borrower's
obligations in such manner as it may see fit in its sole
discretion.
(c) Notwithstanding anything to the contrary herein
contained, (i) upon and following the Maturity Date (if the
principal of, and any accrued Interest ong this Note are not paid
in full) or (ii) if an Event of Default shall occur, then, from
and after the date of the occurrence of such Event of Default and
during the continuance of such Event of Default, any unpaid
principal shall bear interest at a rate per annum (the "Default
Rate") equal to the lesser of (1) eighteen percent (1B~) per
annum, or (2) the maximum rate permitted by applicable law to be
charged to Borrower.
(d) It is not intended hereby to charge interest at a rate
in excess of the maximum legal rate of interest permitted to be
charged to Borrower under applicable law, but if, notwithstanding
the foregoing, interest in excess of said maximum legal rate
shall be paid hereunder, the excess shall be applied by Lender to
the payment of the unpaid principal due hereunder.
114
<PAGE>
3. Voluntary Prepayment. Borrower shall have the right to
prepay any unpaid principal or other unpaid sums in connection
therewith in whole or in part without penalty or premium. Any
such prepayment of unpaid principal shall be accompanied by an
amount equal to unpaid Interest to the date of such prepayment on
the amount of principal being so prepaid. In the event of such
voluntary prepayment, Borrower shall give Lender written notice
of its intent to prepay at least ten (10) Business Days prior to
the date on which such prepayment is to be made, and shall
specify the amount of such prepayment. If any such notice is
given, the amount specified in such notice shall be due and
payable on the date specified therein.
4. Acceleration. In the case of the occurrence of any Event
of Default under this Note, Lender may, upon giving written
notice to Borrower, and in addition to exercising any other
available rights or remedies, accelerate all or any part of the
principal due hereunder, which shall therewith be immediately due
and payable by Borrower, together with Interest accrued to date
at the rate specified hereunder, together with all fees and other
charges payable by Borrower hereunder.
5. Waiver. (a) Borrower and any endorsers, sureties and
guarantors hereof or hereon hereby waive presentment for payment,
demand, protest, notice of non-payment or dishonor and of
protest, and agree to remain bound until the unpaid principal,
all accrued interest. and all other sums payable hereunder are
paid in full, notwithstanding any extensions of time for payment
which may be granted even though the period of extension be
indefinite, and notwithstanding any inaction by, or failure to
assert any legal right available to, Lender.
(b) It is further expressly agreed that any waiver by
Lender, other than a waiver in writing signed by Lender, of any
term or provision hereof or of any right, remedy or option under
this Note shall not be controlling, nor shall it prevent or estop
Lender from thereafter enforcing such term, provision, right,
remedy or option, and the failure or refusal of Lender to insist
in any one or more instances upon the strict performance of any
of the terms or provisions of this Note shall not be construed as
a waiver or relinquishment for the future of any such term or
provision, but the same shall continue in full force and effect,
it being understood and agreed that Lender's rights, remedies and
options under this Note are and shall be cumulative and are in
addition to all other rights,
115
<PAGE>
remedies and options of Lender in law or in equity or under any other
agreement.
6. Late Charge. In addition to interest charged at the
Default Rate and Lender's other available remedies, in the event
any amount due and pa~able under this Note is not paid on the
date when due, a "late charge" of six cents for each dollar
overdue shall be charged by Lender and paid by Borrower for the
purpose, among other things, of covering the expenses incident to
handling a delinquent payment.
7. Costs of Collection. Borrower shall pay, when such costs
are incurred by Lender, all third party costs of collecting any
amount which is not paid by Borrower when due pursuant to the
terms of this Note, including, without limitation, the attorneys'
fees and disbursements of Lender's counsel, which costs may be
added to the indebtedness evidenced by this Note and paid
promptly on demand, together with interest thereon at the Default
Rate.
8. Subordination. The term "Senior Indebtedness" shall
mean: (i) the principal in an amount not to exceed $12,000,000,
plus any premiums, unpaid interest and any other sums, charges or
amounts which is or may become due and payable by Borrower to
Nomura Asset Capital Corporation, whether outstanding on the date
of execution of this Note or thereafter created, incurred,
assumed, issued or guaranteed, which indebtednss is, among other
things, for all or part of the consideration for the acquisition
of certain hotels being transferred from Lender to Borrower on
even date herewith pursuant to that certain Agreement of Purchase
Sale dated as of September 26, 1996, among Borrower, Lender and
Hudson Hotels Properties Corp.; and any and all deferrals,
renewals or extensions of any such indebtedness or obligations.
This Note, including the principal hereof and Interest
hereon, is subordinate and junior in right of payment to the
Senior Indebtedness of Borrower. In the case of any bankruptcy,
insolvency, receivership, conservatorship, reorganization, or
arrangement with, or assignment for the benefit of creditors,
readjustment of debt, marshaling of assets and liabilities or
similar proceeding or any liquidation or winding- up of, or
relating to, Borrower, whether voluntary or involuntary, all such
obligations and rights, including interest at the Default Rate,
shall be entitled to be paid in full before any payment shall be
made on account of the principal, or Interest or premium, if any,
on this Note.
116
<PAGE>
9. Waiver of Trial by Jury Borrower hereby irrevocably
waives all right to trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Note.
10. Miscellaneous. (a) Applicable Law. Borrower agrees that
this Note shall be governed by and construed and enforced in
accordance with the procedural and substantive laws of the State
of New York. Any legal action or proceeding with respect to this
Note must be brought in the courts of the State of New York
within the First Judicial Department 1st District, New York City
or of the United States of America for the Southern District of
New York, and, by execution and delivery of this Note, Borrower
hereby accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid
courts. Borrower further irrevocably consents to the service of
process out of any of the aforementioned courts in any such
action or proceeding by the delivery of copies thereof to
Borrower to the address of Borrower specified in the Preamble
hereof. Nothing herein shall affect the right of Lender to serve
process in any other manner permitted by ~aw or to commence legal
proceedings or otherwise proceed against Borrower in any other
jurisdiction.
(b) Amendments in Writing. No amendment or waiver of any
provision of this Note, nor consent to any departure by Borrower
therefrom, shall in any event be effective unless the same shall
be in writing and signed by Lender and Borrower and then such
waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
(c) Successors. Lender shall have the right to assign to
one or more banks or other persons or entities all or a portion
of its interest in this Note and to sell participations in or to
all or a portion of its interest in this Note. The term "Lender"
shall mean the then holder of this Note from time to time and its
successors and assigns. Notwithstanding any provision of this
Note, any assignee of all or a portion of the rights and
interests of Lender under this Note shall be entitled to the
benefits, and subject in all respects to the terms and
conditions, of this Note.
(d) Partial Invalidity. In the event that any provision of
this Note or the application thereof to Borrower or any
circumstance in any jurisdiction governing this Note shall, to
any extent, be invalid or unenforceable under any applicable
statute, regulation, or rule of law then such a provision shall
be deemed inoperative to the extent that
117
<PAGE>
it may conflict therewith and shall be deemed modified to conform
to such statute, regulation or rule of law, and the remainder of
this Note and the application of any such invalid or
unenforceable provision to parties, jurisdictions, or
circumstances other than to whom or to which it is held invalid
or unenforceable, shall not be affected thereby nor shall the
same affect the validity or en-forceability of any other
provision of this Note.
(e) Time Is of the Essence. Time is of the essence as to
all dates set forth herein; provided, however, that whenever any
payment to be made hereunder shall be stated to be due on a day
other than a Business Day, such payment may be made on the next
succeeding Business Day.
(f) No Impairment of Rights. No act of commission or
omission of any kind or at any time upon the part of Lender or
its successors or assigns in respect of any matter whatsoever
shall in any way impair the rights of Lender to enforce any
right, power or benefit under this Note and no set-off,
counterclaim, reduction, or diminution of any obligation, or any
defense of any kind or nature, which Borrower has or may have
against Lender or any assignee or successor thereof, shall be
available hereunder to Borrower.
(g) Authority. Borrower has executed this Note with due and
proper authority to do so. This Note is valid and enforceable
against Borrower and evidences Borrower's lawful indebtedness to
Lender.
IN WITNESS WHEREOF, Borrower has caused the note to be
executed as of the date first above written.
Attest: HUDSON HOTELS CORPORATION
______________________________ By:____________________________
Alan S. Lockwood, Secretary Name: E. Anthony Wilson
Title: Chairman
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EXHIBIT E
Purchase Price Allocation
SB Motel Albany Corp. $3,176,000
SB Motel Cary 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 Durham-Duke Corp. $9,429,000
SB Motel Durham Research Triangle Park Corp. $4,945,000
SB Motel Raleigh Corp. $3,835,000
SB Motel Richmond Corp. $6,535,000
SB Motel Statesville Corp. $3,741,000
SB Motel Virginia Beach Corp. $2,286,000
SB Motel Wilmington Corp. $6,005,000
-----------
Total $61,000,000
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EXHIBIT F
Mechanics Liens
(1) Approximately $25,000 claim/lien in connection with the Columbia
Property.
(2) Approximately $5,000 dispute with sealing Contractor in
connection with the Richmond Property.
120
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EXHIBIT G
Hudson's Litigation Schedule
On October, 26, 1990, a complaint was filed in Palm Beach
County Circuit Court, Florida, by Seagate Beach Quarters, Inc., a
Florida corporation (Bearing Case #90-12358-AB), seeking damages
plus interest and costs, against Rochester Community Savings
Bank, ("RCSB"), a New York based bank, Shore Holdings, Inc.
("SHORE"), a subsidiary of RCSB and naming Hudson as a
co-defendant. On December, 6, 1990, Delray Beach Hotel Properties
Limited, a Florida limited partnership controlled by Hudson,
purchased the Seagate Hotel and Beach Club from RCSB's
subsidiary, SHORE. The purchase contract included an
indemnification of Hudson against any action resulting from
previously negotiated contracts between RCSB's subsidiaries and
third-parties. Case #90-12358-AB contained allegations that
RCSB's subsidiary, SHORE, defaulted in its obligations under a
Contract for Purchase and Sale, dated August 16, 1990, and failed
to go forward with the transaction due to alleged tortious
negotiations between RCSB and Hudson. On March 17, 1994, the
Court granted Summary Judgment in favor of RCSB and Hudson which
judgment was appealed by Seagate. The Fourth District Court of
Appeal in Florida affirmed the summary judgment on RCSB and
reversed the summary judgment granted in favor of Hudson,
remanding the action to Circuit Court for further consideration.
On August 15, 1994, Seagate proceeded to trial against SHORE in
case #90- 12358-AB. During the course of the trial, Seagate took
a voluntary dismissal of their action against SHORE. On September
8, 1994, Seagate ref iled its lawsuit against SHORE and joined
Delray Beach Hotel Properties Limited, through its general
partner, Delray Beach Hotel Corp. (bearing Case #94-6961-AF). The
new case against SHORE was brought essentially on the same facts
as stated above. The claim against Delray Beach Hotel Properties
Limited was identical to the conspiracy and tortious interference
with a business relationship claim currently existing against
Hudson. On January 27, 1995, the Court issued an Order dismissing
the Amended Complaint as to Delray Beach Hotel Properties
Limited. The Circuit Court has consolidated the case against
Hudson (Case #90-12358-AB) and the case against SHORE (Case
#94-6961-AF) and it is anticipated those suits will go to trial
during 1997.
121
<PAGE>
On February 11, 1993, a complaint was filed in the Western
District of New York, United States District Court, by John
Miranda, Susan Miranda and Christopher Miranda, seeking damages
and costs against Quality Inn International, Choice Hotels
International, and naming Hudson as a co-defendant. The requested
relief in this case, John Miranda and Susan Miranda and
Christopher Miranda vs. Quality Inns International Inc., Choice
Hotels International Inc., Ridge Road Hotel Properties, Ridge
Road Hotel Properties dibIa Comfort Inn, a/k/a Comfort Inn West,
Hudson, and Jennifer L. Ansley, as Executrix of the Estate of
Loren G. Ansley, was based on allegations that John Miranda,
while staying at the Comfort Inn, stepped on a needle, and claims
negligence and lack of due care on the part of the defendants.
This case is being diligently defended by the insurance carrier
of Ridge Road Hotel Properties and Hudson. Hudson believes that
it has adequate insurance for any potential loss.
After taking into consideration legal Counsel's evaluation
of all such actions, management is of the opinion that the
outcome of each such proceeding or claim which is pending, or
known to be threatened (as described above), will not have a
significant effect on Hudson's financial statements.
On June 20, 1995, Ladenburg, Thalmann & Co., Inc. Hudson's
former investment bankers, filed a complaint in New York State
Supreme Court against Hudson alleging breach of contract and
damages of $906,250 relating to Hudson's rescission of a warrant
granted to them in connection with the investment advisory
agreement. In February 1994, the Board of Hudson determined that
Ladenburg had been otherwise adequately compensated for such
services as were actually performed, and voted to rescind the
warrant. Hudson has answered the complaint, denying the relevant
allegations and asserting several affirmative defenses. Discovery
in the case has commenced and is continuing. The ultimate outcome
of the litigation cannot presently be determined. Accordingly, no
provision for any liability that may result has been made in the
financial statements.
On January 29, 1996, William Lemer filed a complaint in the
Court of Common Please of Washington County, Pennsylvania,
against Hudson, alleging breach of contract and damages of
$253,125 relating to Hudson's rescission of a warrant granted to
this individual in connection with establishing a relationship
with Ladenburg, Thalmann & Co., Inc. In February 1994, the Board
of Hudson rescinded the warrant to William Lerner as a result of
terminating Hudson's relationship with Ladenburg, Thalmann & Co.,
Inc. On March 26, 1996, William
122
<PAGE>
Lerner dismissed the complaint filed against Hudson. As part of
the dismissal, Hudson allowed him to exercise his warrants on a
cashless basis and issued 19,594 shares of Microtel common stock
as a result of this transaction.
123
<PAGE>
EXHIBIT H
Environmental Reports
1. Phase I Site Assessment Report Update
Cricket Inn
7300 West Broad Street
Richmond, Virginia 23294
Prepared For: Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Prepared By: Ogden Environmental and Engineering Services
9800 West Kincey Avenue, Suite 190
Huntersville, Virginia 23294
Dated: November 12, 1993
2. Phase I Environmental Assessment
Cricket Inn Property Richmond, Virginia
Prepared For: Salomon New York, New York
Prepared By: SEC Donohue Inc. Greenville, South Carolina
Dated: July, 1992
3. Phase I Environmental Assessment
Cricket Inn Property
2306 Elba Street
Durham, North Carolina
Prepared For: Salomon Brothers Inc
New York, New York
Prepared By: SEC Donohue Inc.
Greenville, South Carolina
Dated: July, 1992
4. Phase I Site Assessment Report Update
124
<PAGE>
Cricket Inn
2306 Elba Street
Durham, North Carolina
Prepared For: Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Prepared By: Ogden Environmental and Engineering Services
9800 West Kincey Avenue, Suite 190
Huntersville, North Carolina 28087
Dated: November 12, 1993
5. Phase I Environment Assessment
Cricket Inn Property Cary, North Carolina
Prepared For: Salomon Brothers Inc
New York, New York
Prepared By: SEC Donohue Inc. Greenville, South Carolina
Dated: July, 1992
6. Phase I Site Assessment Report Update
Cricket Inn
1716 Walnut Street
Cary, North Carolina 27511
Prepared For: Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Prepared By: Ogden Environmental and Engineering Services
9800 West Kincey Avenue, Suite 190
Huntersville, North Carolina 28087
Dated: November 12, 1993
7. Phase I Environmental Assessment
Cricket Inn Property
Statesville, North Carolina
Prepared For: Salomon Brothers Inc
125
<PAGE>
New York, New York
Prepared By: SEC Donohue Inc.
Greenville, South Carolina
Dated: July, 1992
8. Phase I Site Assessment Report Update
Cricket Inn
1503 East Broad Street
Statesville, North Carolina 28677
Prepared For: Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
126
<PAGE>
Prepared By: Ogden Environmental and Engineering Services
9800 West Kincey Avenue, Suite 190
Huntersville, North Carolina 28087
Dated: November 12, 1993
9. Phase I Environmental Assessment
Cricket Inn Property
Wilmington, North Carolina
Prepared For: Salomon Brothers Inc
New York, New York
Prepared By: SEC Donohue Inc.
Greenville, South Carolina
Dated: July, 1992
10. Phase I Site Assessment Report Update
Cricket Inn
4926 Market Street
Wilmington, North Carolina 28403
Prepared For: Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Prepared By: Ogden Environmental and Engineering Services
9800 West Kincey Avenue, Suite 190
Huntersville, North Carolina 28087
Dated: November 12, 1993
11. Phase I Site Assessment Report Update
Cricket Inn
8104 Two Notch Road
Columbia, South Carolina 29223
Prepared For: Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Prepared By: Ogden Environmental and Engineering Services
127
<PAGE>
9800 West Kincey Avenue, Suite 190
Huntersville, North Carolina 28087
Dated: November 12, 1993
12. Phase I Environmental Assessment
Cricket Inn Property
Columbia, South Carolina
128
<PAGE>
Prepared For: Salomon Brothers Inc
New York, New York
Prepared By: SEC Donohue Inc.
Greenville, South Carolina
Dated: July, 1992
13. Limited Phase II Subsurface Investigation
Cricket Inn
Interstate 77 and Two Notch Road
Columbia, South Carolina
GWPD Site #A-40-AA-15401
Prepared For: Richfield Hotel Management, Inc.
4600 South Ulster Street, Suite 1200
Denver, Colorado 80237
Prepared By: Ogden Environmental and Engineering Services
9800 West Kincey Avenue, Suite 190
Huntersville, North Carolina 28087
Dated: February 26, 1993
14. Phase I Environmental Assessment
Cricket Inn Property Charleston, South Carolina
Prepared For: Salomon Brothers Inc
New York, New York
Prepared By: SEC Donohue Inc.
Greenville, South Carolina
Dated: July, 1992
15. Phase I Site Assessment Report Update
Cricket Inn
7415 Northside Drive
North Charleston, South Carolina 29420
Prepared For: Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
129
<PAGE>
Prepared By: Ogden Environmental and Engineering Services
9800 West Kincey Avenue, Suite 190
Huntersville, North Carolina 28087
Dated: November 12, 1993
16. Phase I Environmental Assessment
Cricket Inn Property
Albany, Georgia
Prepared For: Salomon Brothers Inc
New York, New York
Prepared By: SEC Donohue Inc.
Greenville, South Carolina
Dated: July, 1992
17. Phase I Site Assessment
Report Update
Cricket Inn
2586 North Slappey Boulevard
Albany, Georgia 31701
Prepared For: Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Prepared By: Ogden Environmental and Engineering Services
9800 West Kincey Avenue, Suite 190
Huntersville, North Carolina 28087
Dated: November 12, 1993
18. Phase I Site Assessment Report Update
Cricket Inn
5745 Northampton Boulevard
Virginia Beach, Virginia 23455
Prepared For: Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Prepared By: Ogden Environmental and Engineering Services
130
<PAGE>
9800 West Kincey Avenue, Suite 190
Huntersville, North Carolina 28087
Dated: November 12, 1993
19. Limited Phase II Subsurface Investigation Cricket Inn Property
5745 Northampton Boulevard Virginia Beach, Virginia 23455
Prepared For: Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Prepared By: Ogden Environmental and Engineering Services
9800 West Kincey Avenue, Suite 190
Huntersville, North Carolina 28087
Dated: November 22, 1993
131
<PAGE>
20. Phase I Environmental Assessment
Cricket Inn Property
Virginia Beach, Virginia
Prepared For: Salomon Brothers Inc
New York, New York
Prepared By: SEC Donohue Inc.
Greenville, South Carolina
Dated: July, 1992
21. Phase I Environmental Assessment
Cricket Inn Property
4507 NC Highway 55
Durham, North Carolina
Prepared For: Salomon Brothers Inc
New York, New York
Prepared By: SEC Donohue Inc.
Greenville, South Carolina
Dated: July, 1992
22. Phase I Site Assessment Report Update
Cricket Inn
4507 NC Highway 55
Durham, North Carolina 27713
Prepared For: Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
132
<PAGE>
Prepared By: Ogden Environmental and Engineering Services
9800 West Kincey Avenue, Suite 190
Huntersville, North Carolina 28087
Dated: November 12, 1993
23. Phase I Environmental Assessment
Cricket Inn Property
Raleigh, North Carolina
Prepared For: Salomon Brothers Inc
New York, New York
Prepared By: SEC Donohue Inc.
Greenville, South Carolina
Dated: July, 1992
24. Phase I Site Assessment Report Update
Cricket Inn
3201 Old Wake Forest Road
Raleigh, North Carolina 27609
Prepared For: Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Prepared By: Ogden Environmental and Engineering Services
9800 West Kincey Avenue, Suite 190
Huntersville, North Carolina 28087
Dated: November 12, 1993
25. Phase I Environmental Assessment
Cricket Inn Property
Charlotte North Carolina
Prepared For: Salomon Brothers Inc
New York, New York
Prepared By: SEC Donohue Inc
Greenville, South Carolina
Dated: July, 1992
133
<PAGE>
26. Phase I Site Assessment Report Update
Cricket Inn
1200 West Sugar Creek Road
Charlotte, North Carolina 28213
Prepared For: Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Prepared By: Ogden Environmental and Engineering Services
9800 West Kincey Avenue, Suite 190
Huntersville, North Carolina 28087
Dated: November 12, 1993
27. Limited Phase II Subsurface Investigation Cricket Inn
1200 West Sugar Creek Road Charlotte, North Carolina
Prepared For: Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Prepared By: Ogden Environmental and Engineering Services
9800 West Kincey Avenue, Suite 190
Huntersville, North Carolina 28087
Dated: November 22, 1993
134
<PAGE>
EXHIBIT I
Sellers' Litigation Schedule
1. Dean Waldrep and Kathy Elaine Clark V. Hotel Renovations General
Hospitality, Inc., S.C. Ct. of Common Pleas, CA. No. 95-CP-40-
0773.
135
<PAGE>
EXHIBIT 2
CONTRACT AMENDMENT NO. 1
THIS INSTRUMENT is entered as of 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 Durham-Duke Corp., SB Motel Raleigh Corp.,
and SB Motel Charlotte I-85 Corp. (collectively, "Sellers"),
Hudson Hotel Properties Corp. ("Purchaser") and Hudson Hotels
Corporation ("Hudson").
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, Hudson, 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, Hudson, 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 Hudson 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 Hudson, 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, Hudson and Purchaser shall be entitled to a
closing adjustment 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.
<PAGE>
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 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 Hudson shall have
satisfied each and all of the obligations of Hudson
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
Hudson which arise hereunder, under the Note, for the
registration of the Shares, or otherwise."
8. Hudson, 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
2
<PAGE>
dissatisfied with any aspect of the Premises in Purchaser's
sole discretion.
3
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set
their hands as of the date first set forth above.
SB Motel Albany Corp.
By: \s\ John P. Buza
----------------------
John P. Buza
Vice President
SB Motel Charleston Corp.
By: \s\ John P. Buza
----------------------
John P. Buza
Vice President
SB Motel Columbia Corp.
By: \s\ John P. Buza
----------------------
John P. Buza
Vice President
SB Motel Richmond Corp.
By: \s\ John P. Buza
----------------------
John P. Buza
Vice President
SB Motel Virginia Beach Corp.
By: \s\ John P. Buza
---------------------
John P. Buza
Vice President
SB Motel Cary Corp.
By: \s\ John P. Buza
---------------------
John P. Buza
Vice President
SB Motel Charlotte I-85 Corp.
By: \s\ John P. Buza
---------------------
John P. Buza
Vice President
SB Motel Durham-Duke Corp.
By: \s\ John P. Buza
--------------------
John P. Buza
Vice President
<PAGE>
SB Motel Durham-Research
Triangle Park Corp.
By: \s\ John P. Buza
-------------------
John P. Buza
Vice President
SB Motel Raleigh Corp.
By: \s\ John P. Buza
-------------------
John P. Buza
Vice President
SB Motel Statesville Corp.
By: \s\ John P. Buza
-------------------
John P. Buza
Vice President
SB Motel Wilmington Corp.
By: \s\ John P. Buza
-------------------
John P. Buza
Vice President
Hudson Hotels Properties Corp.
By: \s\ E. Anthony Wilson
----------------------
E. Anthony Wilson
Chairman
Hudson Hotels Corporation
By: \s\ E. Anthony Wilson
----------------------
E. Anthony Wilson
Chairman and 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:
<PAGE>
EXHIBIT 3
[Logo] November 15, 1996
VIA FACSIMILE and FEDERAL EXPRESS
John P. Buza, Vice President
Salomon Brothers Inc.
Seven World Trade Center
New York, New York 10048
Re: Agreement of Purchase and Sale dated September 27,
1996, as amended October 31, 1996 among Hudson
Hotels Properties Corp. ("Purchaser"), Hudson
Hotels Corporation ("Hudson"), 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 Durham-Duke Corp.; SB Motel Raleigh Corp.
and SB Motel Charlotte I-85 Corp. ("Sellers") (the
"P&S Agreement"); all capitalized terms not herein
defined shall have the meanings ascribed to such
terms in the P&S Agreement
Dear John:
Please sign below to indicate your acknowledgment that
the Feasibility Period under Section 3.1 of the P&S Agreement is
hereby extended until midnight, eastern standard time, Monday,
November 18, 1996.
Very truly yours,
HUDSON HOTELS PROPERTIES CORP.
By: \s\ E. Anthony Wilson
------------------------
E. Anthony Wilson
Chairman
EAW/ksb
cc: Craig S. Feder, Esq. (via Federal Express)
Robin Panovka, Esq. (via Federal Express)
<PAGE>
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\ John P. Buza
---------------------
Name: John P. Buza
Title: Vice President
SB MOTEL DURHAM-RESEARCH
TRIANGLE PARK CORP.
By: \s\ John P. Buza
-----------------------
Name: John P. Buza
Title: Vice President
SB MOTEL CARY CORP.
By: \s\ John P. Buza
-----------------------
Name: John P. Buza
Title: Vice President
SB MOTEL STATESVILLE CORP.
By: \s\ John P. Buza
-----------------------
Name: John P. Buza
Title: Vice President
SB MOTEL WILMINGTON CORP.
By: \s\ John P. Buza
------------------------
Name: John P. Buza
Title: Vice President
SB MOTEL COLUMBIA CORP.
By: \s\ John P. Buza
------------------------
Name: John P. Buza
Title: Vice President
2
<PAGE>
SB MOTEL CHARLESTON CORP.
By: \s\ John P. Buza
-------------------------
Name: John P. Buza
Title: Vice President
SB MOTEL ALBANY CORP.
By: \s\ John P. Buza
-------------------------
Name: John P. Buza
Title: Vice President
SB MOTEL VIRGINIA BEACH CORP.
By: \s\ John P. Buza
------------------------
Name: John P. Buza
Title: Vice President
SB MOTEL DURHAM-DUKE CORP.
By: \s\ John P. Buza
-------------------------
Name: John P. Buza
Title: Vice President
SB MOTEL RALEIGH CORP.
By: \s\ John P. Buza
-------------------------
Name: John P. Buza
Title: Vice President
SB MOTEL CHARLOTTE I-85 CORP.
By: \s\ John P. Buza
-------------------------
Name: John P. Buza
Title: Vice President
3
<PAGE>
HUDSON HOTELS CORPORATION
By: \s\ E. Anthony Wilson
----------------------
E. Anthony Wilson
Chairman
HUDSON HOTELS CORPORATION
By: \s\ E. Anthony Wilson
------------------------
E. Anthony Wilson
Chairman and 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:
4
<PAGE>
EXHIBIT 4
[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 HUDSON HOTELS
PROPERTIES CORP., a New York corporation with offices at One
Airport Way, Suite 200, Rochester, New York 14624 ("Purchaser"),
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 DURHAM-DUKE CORP., SB MOTEL RALEIGH CORP. and SB MOTEL
CHARLOTTE I-85 CORP., each a Delaware corporation with offices at
Seven World Trade Center, New York, New York 10048, Attn: Mr.
John P. Buza, Vice President (collectively, "Sellers") and HUDSON
HOTELS CORPORATION, a New York corporation with offices at One
Airport Way, Suite 200, Rochester, New York 14624 ("Hudson").
W I T N E S S E T H:
WHEREAS, Sellers, Purchaser and Hudson 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 Hudson 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
<PAGE>
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) Hudson shall deliver to Sellers (i) a
promissory note executed by Hudson in the amount
of Three Million and NO/00 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 Hudson (the "Hudson Common
Stock") or (ii) that number of shares of Hudson
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
Hudson 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 Hudson 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. 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
2
<PAGE>
(l) 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 Dean Waldrop and Kathy Elaine
Clark v. Hotel Renovations of Dallas and American
General Hospitality Incorporated, CA No.
95-CP-40-0773 (the "Waldrop 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 Waldrop 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 John P. Buza, 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 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
3
<PAGE>
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 there for:
"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
Personalty, 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
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
4
<PAGE>
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) Hudson shall deliver to Sellers (i) a
promissory note executed by Hudson 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 Hudson (the
"Hudson Common Stock") or (ii) that number
of shares of Hudson 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
(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 Hudson 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
5
<PAGE>
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
Hudson, and shares of Hudson 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 Fran Damage Schedule, or
otherwise. Purchaser waives any and all rights which it might
have under or in connection with the Fran Damage Schedule and/or
the letter from Sellers which is attached as Exhibit A to the
First Amendment (and
6
<PAGE>
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 Hudson's obligation to close the transactions
contemplated by the P&S Agreement are unconditional, the Deposit
is non refundable, and neither Purchaser nor Hudson 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 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 Downing Company
with respect to the Richmond Property in the form
7
<PAGE>
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 Durham-Duke
Property in the form attached hereto as Exhibit
M; and
(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.
IN WITNESS WHEREOF, the undersigned have duly executed
this Amendment as of the day and year first above written.
8
<PAGE>
SB MOTEL RICHMOND CORP.
By:______________________
Name: John P. Buza
Title: Vice President
SB MOTEL DURHAM-RESEARCH TRIANGLE PARK
CORP.
By:______________________
Name: John P. Buza
Title: Vice President
SB MOTEL CARY CORP.
By:______________________
Name: John P. Buza
Title: Vice President
SB MOTEL STATESVILLE CORP.
By:______________________
Name: John P. Buza
Title: Vice President
SB MOTEL WILMINGTON CORP.
By:______________________
Name: John P. Buza
Title: Vice President
9
<PAGE>
SB MOTEL COLUMBIA CORP.
By:______________________
Name: John P. Buza
Title: Vice President
SB MOTEL CHARLESTON CORP.
By:______________________
Name: John P. Buza
Title: Vice President
SB MOTEL ALBANY CORP.
By:______________________
Name: John P. Buza
Title: Vice President
SB MOTEL VIRGINIA BEACH CORP.
By:______________________
Name: John P. Buza
Title: Vice President
SB MOTEL DURHAM-DUKE CORP.
By:______________________
Name: John P. Buza
Title: Vice President
SB MOTEL RALEIGH CORP.
By:______________________
Name: John P. Buza
Title: Vice President
SB MOTEL CHARLOTTE I-85 CORP.
By:______________________
Name: John P. Buza
Title: Vice President
10
<PAGE>
HUDSON HOTELS PROPERTIES CORP.
By:______________________
Name: E. Anthony Wilson
Title: Chairman and Chief
Executive Officer
HUDSON HOTELS CORPORATION
By:______________________
Name: E. Anthony Wilson
Title: Chairman and Chief
Executive Officer
E. Anthony Wilson is executing this Contract
Amendment No. 2 in his individual capacity
solely to acknowledge and confirm his
covenant set forth in Section 15.3(b) of the
P&S Agreement.
________________________________
E. ANTHONY WILSON
11
<PAGE>
Escrow Agent is executing this Contract
Amendment No. 2 solely to acknowledged its
continued obligations as Escrow Agent
LAWYERS TITLE INSURANCE CORPORATION
By:_______________________________
Name:____________________________
Title:___________________________
12
<PAGE>
SB Motel Corp is executing this Contract
Amendment No. 2 solely to acknowledge and
confirm its representations and warranties
made in Section 3 hereof.
SB MOTEL CORP.
By:______________________
Name: John P. Buza
Title: Vice President
13
<PAGE>
EXHIBIT E
Purchase Price Allocation
SB Motel Albany Corp. $3,151,000
SB Motel Cary Corp. $6,008,000
SB Motel Charleston Corp. $5,938,000
SB Motel Charlotte 1-85 Corp. $3,291,000I
SB Motel Columbia Corp. $5,811,000
SB Motel Durham-Duke 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
14
<PAGE>
Exhibit J
November 27, 1996
HH Properties-I, Inc.
HH Properties-VB, Inc.
One Airport Way, Suite 200
Rochester International Airport
Rochester, NY 14624
Attn: E. Anthony Wilson, Chairman
Re: Agreement of Purchase and Sale, dated September 27, 1996,
among Hudson 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 1-85 Corp., SB Motel
Virginia Beach Corp., SB Motel Columbia Corp., SB Motel
Durham-Duke Corp., SB Motel Wilmington Corp., SB Motel Durham-
Research Triangle Park Corp. (collectively, "Sellers"), and
Hudson Hotels Corp. ("Hudson"), 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. v. Salomon 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, Ben
Franklin, Salomon 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 the United
<PAGE>
E. Anthony Wilson
Hudson 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. v. Salomon 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 Harris Trust Savings Bank, not individually but
solely as trustee for Ameritech Pension Trust ("APT"), Ameritech
Corporation and John A. Edwardson (collectively, "Ameritech") v.
Salomon 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
<PAGE>
E. Anthony Wilson
Hudson Hotels Properties Corp.
November 27, 1996
Page 3
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 "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
<PAGE>
E. Anthony Wilson
Hudson Hotels Properties Corp.
November 27, 1996
Page 4
assume the defense of any Indemnified Claim, then
In-demnitees, or either of them, may assume such defense
but the costs, expenses and reasonable attorneys' fees
incurred shall be paid by Salomon hereunder;
(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 Hudson
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.
<PAGE>
E. Anthony Wilson
Hudson Hotels Properties Corp.
November 27, 1996
Page 5
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:
Salomon Brothers Inc, Seven World Trade Center, 33rd Floor, New
York, New York 10048, Attn: John P. Buza.
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:
<PAGE>
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 P.O. Box 1001, Statesville, North Carolina
28677, NOMURA ASSET CAPITAL CORPORATION, a Delaware corporation
("Lender"), having an address at 2 World Financial Center,
Building B, New York, New York 10281-1198, and HH Properties-- I,
Inc. a New York corporation ("New Tenant"), having an address c/o
Hudson Hotels Corporation, One Airport Way, Suite 2a Rochester
International Airport, Rochester, New York 14624, Attn: E.
Anthony Wilson, 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
1
<PAGE>
("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 extend 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.
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
2
<PAGE>
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 for
Landlord to deliver this Agreement and to perform fully its
obligations hereunder.
1.10 No Offsets. There are no offsets, coun-
terclaims, 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
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<PAGE>
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 grounds 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 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
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<PAGE>
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"), 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 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
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<PAGE>
(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.
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
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<PAGE>
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 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 Mortgagees
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<PAGE>
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 its 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 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
8
<PAGE>
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 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,
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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 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 Joseph B. Heil, Esquire, Dechert Price & Rhoads, 1717 Arch
Street, 4000 Bell Atlantic Tower, Philadelphia, Pennsylvania
19103. 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.
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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. 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 WHEREF, 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 CORPORATION,
a Delaware corporation
By:____________________________
Name:
Title:
Attest:________________________
Name:
Title:
[CORPORATE SEAL]
NEW TENANT:
HH PROPERTIES-I, INC. a
New York Corporation
By:____________________________
Name:
Title:
Attest:________________________
Name:
Title:
[CORPORATE SEAL]
<PAGE>
STATE OF NORTH CAROLINA
COUNTY OF IREDELL
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]
<PAGE>
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 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]
<PAGE>
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]
<PAGE>
EXHIBIT B
GROUND LEASE
<PAGE>
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 and 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
<PAGE>
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 Country 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 HOLD the above-described right and
easement upon 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 Samuel M. Black, as trustee (the "Trustee"), join 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.
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
2
<PAGE>
By: __________________________
________________ President
ATTEST:
- -------------------------
_______________ Secretary
[CORPORATE SEAL]
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, a national
banking association
By: __________________________
________________ President
ATTEST:
- -------------------------
_______________ Secretary
[CORPORATE SEAL]
-------------------------------
Samuel L. Black, Trustee
3
<PAGE>
EXHIBIT M
ESTOPPEL CERTIFICATE
THIS CERTIFICATE is given this ___ day of November,
1996 by DOWNING COMPANY, a __________ corporation having an
office at 2880 East Pike, Box 2309, Zanesville, Ohio 43701
("Downing") to HH PROPERTIES-I, INC., a New York corporation, its
successors and assigns (HHP-I), NOMURA ASSET CAPITAL CORPORATION,
a Delaware 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, 7300 West Broad Street (the "SB Premises"); and
WHEREAS, Downing is the owner of certain premises
adjoining the SB Premises, located south of such Premises along
the easterly line of West Broad Street (the "Downing Premises");
and
WHEREAS, pursuant to a certain Shared Access Easement
Agreement by and between Eugene R. Slayden, Jr. and M. Kay
Slayden 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 Downing
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 hereto, 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 Downing
execute and deliver the within Certificate.
<PAGE>
NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby mutually
acknowledged, Downing hereby represents, warrants, certifies,
covenants and agrees that:
1. The Easement constitutes the valid and binding
obligation of Downing, 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 Downing 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
mortgage title insurance for the benefit of HHP-I and Nomura,
respectively, and that HHP-I, Nomura and Lawyers Title may rely
upon the same.
<PAGE>
IN WITNESS WHEREOF, Downing has duly executed and
delivered this Certificate on the date and year first above
written.
DOWNING COMPANY
By:_______________________
Its:______________________
<PAGE>
STATE OF VIRGINIA
COUNTY OF HENRICO, to-wit:
The foregoing instrument was acknowledged before me
this ____ day of November, 1996, by _________________________ of
Downing Company, a _______________ corporation.
My commission expires:
----------------------------
Notary Public
<PAGE>
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
Northampton Boulevard, U.s. Route 13, in the City of Virginia
Beach, Virginia, having a street address of 5745 Northampton
Boulevard 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
Freedland-Clinkscales & 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 forth 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.
<PAGE>
The 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
shall 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 in a
recognized or established overnight courier services, or
delivered in person, properly addressed as follows:
In the case of notices directed to Northampton:
Northampton Investors
===============================
Attention____________________
Facsimile No.:_________________
In the case of notices directed to the Owner:
HH Properties-VB, Inc.
===============================
Attention:_____________________
Facsimile No._________________
This Consent in no way relieves Northampton, its
successors and assigns, from any restrictions, if any, to which
2
<PAGE>
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.
By:_______________________
Title:____________________
IN WITNESS WHEREOF, Northampton agrees to the terms
and conditions of the foregoing consent.
NORTHAMPTON INVESTORS
By:_______________________
Title:____________________
3
<PAGE>
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 corporation, on behalf of said corporation.
My commission expires: _____________________
----------------------------
Notary Public
<PAGE>
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
commonly known as 2306 Elba Street, Durham, NC, 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 Lease (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 times 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
<PAGE>
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 Mortgagee 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 effect 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 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, 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;
2
<PAGE>
or
(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 Center
Building B
New York, New York 10281-1198
3
<PAGE>
with a copy to: Dechert Price & Rhoads
1717 Arch Street
4000 Bell Atlantic Tower
Philadelphia, PA 19103
Attn: Joseph B. Heil, Esq.
Tenant: Raleigh-Durham MSA Limited Partnership
8725 Higgins Road
Chicago, IL 60631
Landlord: HH Properties-I, Inc.
One Airport Way, Suite 200
Rochester, New York 14624
Attn: E. Anthony Wilson
with a copy to: Boylan, Brown, Code, Fowler, Vigdor &
Wilson, LLP
2400 Chase Square
Rochester, New York 14604
Attn: Kathleen S. Baum, Esq.
8. Limitation of Personal Liability. Notwithstanding anything to
the contrary herein or in the Lease, in the event that
Mortgagees 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 noting
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
4
<PAGE>
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.
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)
5
<PAGE>
LANDLORD:
HH Properties-I, Inc., a New
York corporation
By: ________________________
Name:
Title:
Attest:
- -----------------------
_________Secretary
(Corporate Seal)
6
<PAGE>
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)
- -------------------------
<PAGE>
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 & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Attn: Joseph B. Heil, Esquire
<PAGE>
TENANT ESTOPPEL CERTIFICATE
Dated: _______________, 1996
TO: Nomura Asset Capital Corporation
Together with its successors and assigns
Two World Financial Center
Building B
New York, New York 10281-1198
Attn: Michael Brody
and
HH Properties-I, Inc.
One Airport Way
Suite 200
Rochester, New York 14624
Attn: B. Anthony Wilson
Lease Dated: December 14, 1995
Landlord: HH Properties-I, Inc.
One Airport Way
Suite 200
Rochester, New York 14624
Attn: E. Anthony Wilson
Tenant: Raleigh-Durham MSA Limited Partnership
8725 Higgins Road
Chicago, IL 60631
Premises: 336 square feet of space located on the
roof top of 2306 Elba Street in Durham,
NC
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
9
<PAGE>
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 or 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
renewal, 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.
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
10
<PAGE>
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 address hereof will rely
upon this statement in making a loan to Landlord, secured by a
mortgage lien upon the property of which the Premises is a part.
Very truly yours,
Raleigh-Durham MSA Limited
Partnership (Seal)
By: ____________________________
Name:
Title:
Attest:
- -------------------------
_______ Secretary
11
<PAGE>
HH Properties-I, Inc., a
New York Corporation
One Airport Way, Suite 200
Rochester, New York 14624
and
Nomura Asset Capital Corporation and
its successors and assigns
Two World Financial Center
Building B, 21st Floor
New York, New York 10281-1198
Re: Declaration of Covenants and Easements recorded in
Book 3108, Page 819, Wake County Registry (the
"Easement")
Ladies and Gentlemen:
The undersigned Marriott Residence Inn USA
("Marriott") is the owner of Tract 3 as shown in Book of Maps
1983, Pages 378 and 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
<PAGE>
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 mortgage 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:___________________
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HH Properties-I, Inc., a
New York Corporation
One Airport Way, Suite 200
Rochester, New York 14624
and
Nomura Asset Capital Corporation and
its successors and assigns
Two World Financial Center
Building B, 21st Floor
New York, New York 10281-1198
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 Denny's Inc. ("Denny's") is the owner
of Tract 1 as shown in Book of Maps 1983, Page 379, Wake Country
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 its terms and conditions and remain in full force
and effect. Attached hereto are accurate and complete copies of
the Easement and the same have not been modified or amended in
any manner.
2. The Easement has 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,
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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 mortgage 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.
Denny's Inc.
By:_____________________ (seal)
Date:___________________
4
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EXHIBIT 5
CONTRACT AMENDMENT N0. 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 Durham-Duke Corp., SB Motel
Raleigh Corp., and SB Motel Charlotte I-85 Corp., (collectively,
"Sellers"), Hudson Hotels Properties Corp. ("Purchaser") and
Hudson Hotels Corporation ("Hudson").
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, Hudson, 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, Hudson, 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,
<PAGE>
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. HUDSON 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, Hudson 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 Hudson ("Equity
Offering") and an opportunity to make the first offer
to underwrite such offering. Provided that Salomon
Brothers Inc shall submit a written proposal to Hudson
with respect to such underwriting within 20 days after
written notice from Hudson 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
Hudson's judgment to those available from an
alternative underwriter, Hudson 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 Hudson after giving such due
consideration wishes to accept an offer from an
alternative underwriter (the "Alternative
Underwriter") in connection with any Equity Offering,
Hudson 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 as forth herein). Provided that
within the Right of First Refusal Period Salomon
Brothers Inc shall submit a written proposal to Hudson
with respect to such
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<PAGE>
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"), Hudson shall
accept the Matching Offer of Salomon Brothers Inc to
be the principal underwriter. If Salomon Brothers Inc
does not provide Hudson with a Matching Offer during
the Right of First Refusal Period, Hudson 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 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, Hudson shall not
have entered into such underwriting commitment
agreement with the Alternative Underwriter, Hudson
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.
Hudson 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 Hudson shall not
include any type of mortgage, line of credit, bond or
debenture financing.
15.2 Hudson hereby covenants with Sellers that
from and after the Closing, any public announcements
or disclosures made by Hudson 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 Hudson by SBMC, Hudson
shall refrain from making
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<PAGE>
such public disclosures or announcements.
15.3 (a) Hudson hereby covenants with SBMC that,
in the event a Closing takes place hereunder, Hudson
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. Hudson 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, Hudson 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 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
Hudson, including the sale of some or all of the
Shares in a public offering or, if requested by SBMC,
subject to receipt by Hudson of such information
(including information relating to purchasers) as
Hudson 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 Hudson 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 Hudson
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 Hudson
undertakes to effect a registration after the
4
<PAGE>
conclusion of such transaction to permit such shares
to be freely tradeable by the purchasers thereof.
Hudson 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 Hudson's best efforts, Hudson
fails to keep the Shelf Registration effective, Hudson
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, Hudson 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 (6O) days following the
beginning of the Registration Period, Hudson and E.
Anthony Wilson covenant that E. Anthony Wilson acting
in his individual capacity shall not sell any shares
of Hudson Common Stock other than under and pursuant
to Rule 144 of the Securities Act. E. Anthony Wilson
has executed this Agreement below in his individual
capacity to confirm his agreement to such covenant.
15.4 If, at any time from and after the Closing
Date and until commencement of the Registration
Period, Hudson 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
Hudson, Hudson shall give SBMC notice of 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
5
<PAGE>
Hudson no later than 15 days after Hudson's notice is
given, setting forth the number or amount of Shares
which SBMC requests to be included in the registration
statement, and Hudson 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) Hudson 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) Hudson
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, Hudson 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 Hudson's principal
financial officer, stating (a) Hudson's name, address
and telephone number (including area code), (b)
Hudson's Internal Revenue Service identification
number, (c) Hudson's SEC file number, (d) the number
of shares of Hudson's common stock and the number of
shares of any preferred stock of Hudson outstanding as
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<PAGE>
shown by the most recent report or statement published
by Hudson, and (e) whether Hudson 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 Hudson is not required to file reports
in compliance with either Section 13 or Section 15(d)
of the Exchange Act, Hudson will, at its expense,
forthwith upon the written request of SBMC, make
available adequate current public information with
respect to Hudson 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, Hudson shall enter into a customary
underwriting agreement providing for customary
indemnities for the underwriters and the selling
security holders. Hudson shall pay all costs and
expenses of whatsoever nature which arise from or
relate to the registration of sale of the Shares as
aforesaid, except that the seller or 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, Hudson 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.
15.7 (a) Hudson 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 Hudson's Board of
Directors, designated by SBMC, who shall be
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<PAGE>
invited to attend all meetings of the Board of
Directors and shall be compensated in the same manner
as are non-employee directors of Hudson. Such observer
shall be indemnified by Hudson 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
obligation) to have on the board of directors of
Hudson (the "Board") one director (such director and
any other person made a director of the Board pursuant
to this Section 15.8, "SBMC Nominee"), and Hudson
shall promptly cause the SBMC Nominee to become a
member of the Board. If necessary to effectuate the
placement of the SBMC Nominee on the Board, Hudson
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, Hudson will support the
nomination of, and Hudson's 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 Hudson 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 Hudson at which directors
are to be elected, Hudson shall use its reasonable
efforts to solicit from the shareholders of Hudson
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
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<PAGE>
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 SHMC
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 15 shall survive the Closing until SBMC no
longer owns any of the Shares."
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:______________________________
Name: John P. Buza
Title: Vice President
SB MOTEL DURHAM-RESEARCH TRIANGLE PARK
CORP.
By:______________________________
Name: John P. Buza
Title: Vice President
SB MOTEL CARY CORP.
By:______________________________
Name: John P. Buza
Title: Vice President
SB MOTEL STATESVILLE CORP.
By:______________________________
Name: John P. Buza
Title: Vice President
SB MOTEL WILMINGTON CORP.
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By:______________________________
Name: John P. Buza
Title: Vice President
SB MOTEL COLUMBIA CORP.
By:______________________________
Name: John P. Buza
Title: Vice President
SB MOTEL CHARLESTON CORP.
By:______________________________
Name: John P. Buza
Title: Vice President
SB MOTEL ALBANY CORP.
By:______________________________
Name: John P. Buza
Title: Vice President
SB MOTEL VIRGINIA BEACH CORP.
By:______________________________
Name: John P. Buza
Title: Vice President
SB MOTEL DURHAM-DUKE CORP.
By:______________________________
Name: John P. Buza
Title: Vice President
SB MOTEL RALEIGH CORP.
By:______________________________
Name: John P. Buza
Title: Vice President
SB MOTEL CHARLOTTE I - 85 CORP.
By:______________________________
Name John P. Buza
Title: Vice President
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PURCHASER: HUDSON HOTELS PROPERTIES CORP.
By:______________________________
Name: E. Anthony Wilson
Title: Chairman and Chief Executive
Officer
HUDSON: HUDSON HOTELS CORPORATION
By:______________________________
Name: E. Anthony Wilson
Title: Chairman and Chief Executive
Officer
ESCROW AGENT: LAWYERS TITLE INSURANCE CORPORATION
(Solely as Escrow Agent)
By:__________________________________
Name:
Title:
E. Anthony Wilson 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.
-----------------------------------------
E. ANTHONY WILSON
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