EXHIBIT D3
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HEADS OF AGREEMENT
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This Heads of Agreement (this "HOA") is entered into as of the 20th
day of September, 2000 (the "Effective Date") by and between Choice Hotels
International, Inc. ("Choice") and Sunburst Hospitality Corporation ("Sunburst")
(collectively, the "Parties"), with respect to the following:
WHEREAS, Sunburst is engaged in the buying, developing and operating
of hotel properties;
WHEREAS, Choice is engaged in franchising and managing hotels and in
providing various services for its franchises to strengthen particular hotel
brands, including the operation of a national reservation system for Choice's
brands and the conducting of advertising and marketing activities on behalf of
franchises of Choice's brands;
WHEREAS, prior to October 15, 1997, Sunburst was the common parent of
a consolidated group that included as one of its subsidiaries Choice;
WHEREAS, effective October 15, 1997, Sunburst distributed all of the
outstanding common stock of Choice pro rata to Sunburst's shareholders (the
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"Distribution");
WHEREAS, in connection with such Distribution, Sunburst and Choice
entered into a Strategic Alliance Agreement in part to establish a relationship
whereby Sunburst would develop and acquire certain hotels to be franchised by
Choice and the Parties would cooperate with respect to matters of mutual
interest;
WHEREAS, on October 15, 1997, Sunburst issued to Choice a Subordinated
Note due October 15, 2002 in the principal amount of $115,000,000 and containing
the terms set forth therein (the "Term Note");
WHEREAS, Choice and Sunburst entered into an Omnibus Agreement (the
"First Omnibus Amendment Agreement") dated December 28, 1998, to, among other
things, amend the terms of the Strategic Alliance Agreement and the Term Note,
and entered into a Second Omnibus Amendment Agreement (the "Second Omnibus
Amendment Agreement") dated February 29, 2000, to, among other things, further
amend the Strategic Alliance Agreement and the Term Note as amended by the First
Omnibus Amendment Agreement;
WHEREAS, under the terms of the Term Note (as amended) a "Change of
Control" (as defined therein) of Sunburst constitutes an Event of Default and
Sunburst currently desires to enter into a merger with an entity controlled by
certain Sunburst affiliates and members of Sunburst management (the "MBO") the
consummation of which would constitute a Change of Control of Sunburst under the
Term Note; and
WHEREAS, in order to permit Sunburst to consummate the MBO, and in
contemplation of the MBO occurring, the Parties desire to enter into the
transaction set forth herein;
NOW, THEREFORE, Choice and Sunburst agree as follows:
ARTICLE ONE
AMENDED AND RESTATED AGREEMENTS
1.1 Strategic Alliance Agreement. On the Closing Date, subject to
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the conditions set forth herein, the Parties shall enter into the Amended and
Restated Strategic Alliance Agreement, substantially in the form attached hereto
as Exhibit A.
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1.2 Omnibus Amendment to Franchising Agreements. On the Closing
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Date, subject to the conditions set forth herein, the Parties shall enter into
the Amended and Restated Omnibus Amendment to Franchising Agreements,
substantially in the form attached hereto as Exhibit B.
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1.3 Indenture. On the Closing Date, subject to the conditions set
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forth herein, Sunburst shall enter into an indenture (the "Indenture") as
contemplated by the "Description of Senior Subordinated Discount Notes" attached
hereto as Exhibit C, if Notes are issued pursuant to Section 2.1.
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ARTICLE TWO
TERM NOTE
2.1 Exchange. Choice hereby agrees, subject to the satisfaction of
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the conditions set forth herein, on the Closing Date, to surrender to Sunburst
for cancellation the Term Note upon receipt of and in exchange for (i) the
issuance by Sunburst to Choice under the Indenture of Senior Subordinated
Discount Notes due 2007 (the "Notes") with an aggregate principal amount at
maturity of seventy million eight hundred and thirty-one thousand dollars
($70,831,000) and representing an aggregate accreted value on the date of
issuance of sixty million dollars ($60,000,000); provided, however, that, (a) in
lieu of issuing the Notes, Sunburst may elect to pay to Choice on the Closing
Date by wire transfer of immediately available funds an additional amount of
cash in the amount of $50,000,000 or (b) Sunburst may elect to issue less than
sixty million dollars ($60,000,000) accreted value of Notes and correspondingly
pay an amount in cash equal to the product of (I) sixty million dollars
($60,000,000) less the accreted value of the Notes to be issued and (II) 0.8333,
(ii) the payment by Sunburst to Choice by wire transfer of immediately available
funds of an amount equal to $ million ($ ) and (iii) the
payment by Sunburst to Choice by wire transfer of immediately available funds of
an amount of accrued but unpaid interest on the principal balance of the Term
Note from and including June 30, 2000 and through but excluding the Closing
Date.
2.2 Registration Rights. The Parties acknowledge that Choice
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reserves the right to sell the Notes in whole or in part at any time prior to
the maturity date for the Notes. Accordingly, if Notes are issued pursuant to
Section 2.1. Sunburst agrees to enter into a registration rights agreement on
the Closing Date with terms consistent with the registration rights provisions
set forth in the "Description of Senior Subordinated Notes" attached hereto as
Exhibit C. Sunburst agrees to, and agrees use all commercially reasonable
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efforts to cause its affiliates and advisors to, take any and all actions
necessary in the reasonable judgment of Choice and its advisors, in order to
enable Choice to sell the Notes in one or more sales under a shelf registration
under
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the Securities Act of 1933 or one private placement exempt from the registration
requirements thereof (which may take the form of a 144A private placement with a
subsequent registered exchange offer) not inconsistent with the terms of the
Registration Rights Agreement but which shall include all actions of an issuer
of securities in an offering under Rule 144A under the Securities Act.
2.3 Rating of the Notes. Sunburst shall use all commercially
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reasonable best efforts to cause the Notes to be rated by Standard & Poor's and
Moody's (or, if one of such rating agencies shall not rate the Notes, by Fitch
as an alternate rating agency) prior to the Closing Date, if Notes are issued
pursuant to Section 2.1. Notwithstanding the foregoing, if the Notes shall not
have been rated by such two rating agencies on or prior to the Closing Date,
Sunburst shall pay to Choice, as liquidated damages, the sum of nine hundred
thousand dollars ($900,000) promptly.
2.4 Sunburst's agreement to market the Notes, including obtaining a
rating and any due diligence that may be required by prospective investors, is
subject to reimbursement of Sunburst's time and expenses by Choice.
ARTICLE THREE
OTHER AGREEMENTS
3.1 Hotel Site. On or prior to the Closing Date, Sunburst shall
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convey to Choice all title in fee simple to the parcel of land in Mount Laurel,
New Jersey described on Schedule 3.1 hereto (the "Parcel"). The Parcel shall be
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conveyed to Choice free and clear of all encumbrances, except for the
encumbrances set forth on Schedule 3.1 hereto ("Permitted Encumbrances").
3.2 Representations and Warranties. As an inducement to enter into
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this HOA, Sunburst represents and warrants to Choice as follows:
(a) As of the Closing, Sunburst or its subsidiary will have the
right, power and authority to sell and convey the Parcel to Choice and,
other than this HOA, Sunburst has not entered into any agreement granting
to any person any option, right of first refusal or similar right with
respect to the right, title and interests in the Parcel;
(b) (i) There is no litigation or governmental, administrative or
arbitration proceedings or investigations pending or, to Sunburst's
knowledge, threatened against Sunburst or its subsidiaries (solely as such
affects the Parcel) or the Parcel, (ii) there are no unsatisfied judgments,
arbitration awards or judicial orders against Sunburst or its subsidiaries
(solely as such affects the Parcel) or the Parcel and (iii) there are no
pending or, to Sunburst's knowledge, threatened complaints, charges,
petitions or claims against Sunburst or its subsidiaries (solely as such
affects the Parcel) or the Parcel;
(c) Sunburst has not received any written notice from any
governmental authority with respect to any actual or threatened taking of
the Parcel or any portion thereof by the exercise of the right of
condemnation or eminent domain;
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(d) Sunburst, to the best of its knowledge, is in material compliance
with each, and is not in material violation of any, law, ordinance or
governmental rule or regulation (including, without limitation, any and all
applicable Environmental Laws (as hereinafter defined), and building and
zoning ordinances) to which Sunburst's business (solely as it affects the
Parcel) or the Parcel is subject; Sunburst has not failed to obtain any
license, permit, certificate or other governmental authorization or
inspection necessary to the ownership or use of the Parcel or the conduct
of Sunburst's business (solely as it affects the Parcel); and Sunburst has
not received any written communication that alleges that Sunburst is not in
compliance with any Environmental Laws or other law, ordinance or
governmental rule or regulation, it being understood that for the purposes
of this Agreement, the term "Environmental Law" shall mean all applicable
laws and regulations of any governmental authority applicable to the Parcel
and relating to (i) pollution, (ii) the protection of employee health or
(iii) the environment (including ambient air, surface water, groundwater,
land surface, or subsurface strata), including laws and regulations
relating to emissions, discharges, releases or threatened releases of any
chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum and petroleum products;
(e) Attached hereto as Exhibit D is the most recently prepared
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environmental survey (Phase I or otherwise) of the Parcel (including all
amendments and supplements thereto) (the "Environmental Survey"). To the
best of Sunburst's knowledge, the Environmental Survey is true and accurate
in all material respects as of the date hereof; and
(f) Attached hereto as Exhibit E is the most recently prepared survey
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of the Parcel (including all amendments and supplement thereto) (the "Land
Survey"). To the best of Sunburst's knowledge, the Land Survey is true and
accurate in all material respects as of the date hereof.
(g) The information attached hereto as Exhibit F is accurate in all
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material respects and fairly reflects the transactions contemplated in the
Recapitalization Agreement provided to Choice on September 20, 2000.
(h) The description of the transactions contemplated as part of the
recapitalization of Sunburst pursuant to the merger between Sunburst and
Nova Finance Company LLC and the related transactions thereto provided to
Choice and its advisors prior to the date hereof do not vary, in any
material respect, from the description of the transactions set forth in the
Recapitalization Agreement provided to Choice on September 20, 2000.
3.3 Survival and Indemnity. (a) The truth, accuracy and
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completeness of each of the representations and warranties of Sunburst herein
set forth shall constitute a condition precedent to the obligations of Sunburst
and Choice, respectively, hereunder. Such representations, warranties and
covenants herein set forth shall survive the Closing for the period of the
applicable statute of limitations. Sunburst agrees to indemnify, defend and
hold harmless Choice and any of its affiliates from any claim, damage, demand,
liability, loss or cost (including costs of investigation and defense and
reasonable attorneys' fees and costs) or diminution of value, whether or not
involving a third party claim (collectively, "Damages"), which results from (i)
any material breach of or inaccuracy in the respective representations,
warranties and covenants of
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Sunburst set forth above; or (ii) from any injuries to person or property that
occur or arise out of the Parcel prior to Closing.
(b) Choice agrees to indemnify, defend and hold harmless Sunburst and
any of its affiliates from any Damages relating to the Parcel resulting solely
from facts or circumstances occurring from and after the Closing.
ARTICLE FOUR
CONDITIONS TO CLOSING
4.1 Conditions to Obligations of the Parties. The Parties'
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obligations to execute the Amended and Restated Strategic Alliance Agreement and
the Amended and Restated Omnibus Amendment to Franchising Agreements and to
enter into the transactions contemplated hereby (the "New Documents") are
subject to the fulfillment to the Parties' reasonable satisfaction, prior to or
at the Closing, of the following conditions:
(a) No Government or Other Proceedings or Litigation. There shall
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be no injunction or court order restraining consummation of the
transactions contemplated hereunder and there shall be no pending or
threatened action or proceeding by or before a court or governmental body
seeking to restrain or invalidate all or any portion of the transactions
contemplated hereunder, and there shall not have been adopted any law or
regulation making all or any portion of the transactions contemplated
hereunder illegal.
(b) Governmental Approvals. Any governmental approval required under
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any law or regulation applicable to the transactions contemplated hereunder
shall have been obtained.
(c) MBO. All conditions to the closing of the Merger contained in
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the Recapitalization Agreement of even date herewith (other than the
satisfaction of the other conditions to Closing hereunder) between Sunburst
and Nova Finance Company LLC shall have been satisfied.
4.2 Choice's obligation to execute the New Documents and to enter
into the other transaction contemplated hereby is subject to the fulfillment to
Choice's reasonable satisfaction, prior to or at the Closing, of the following
additional conditions:
(a) Sunburst has delivered to Choice free and clear title to the
Parcel, subject only to Permitted Encumbrances.
(b) The covenants and representations and warranties of Sunburst in
this HOA shall be correct when made and on the Closing Date.
(c) The transactions contemplated in the copy of the Recapitalization
Agreement provided to Choice on September 20, 2000 shall be consummated
substantially as set forth therein without material modification, waiver or
amendments to the terms thereof.
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ARTICLE FIVE
CLOSING
5.1 The execution of the New Documents and the consummation of the
other transaction contemplated hereby (the "Closing") will take place at Cahill
Gordon & Reindel, 80 Pine Street, New York, New York 10005, at 10:00 a.m. on a
date mutually agreed upon following the satisfaction of all conditions herein
(the "Closing Date").
At the Closing the deliveries set forth in Sections 5.2 and 5.3 will
be deemed to occur substantially contemporaneously.
5.2 Sunburst shall, at the Closing, deliver to Choice:
(a) the cash payments contemplated by Sections 2.1(ii) and (iii) and,
if applicable, Section 2.1(i) by wire transfer of immediately available
funds to an account specified in writing by Choice;
(b) if Notes are to be issued pursuant to Section 2.1, the Notes as
contemplated by Section 2.1(i);
(c) if Notes are to be issued pursuant to Section 2.1, an executed
copy of the Indenture;
(d) if Notes are to be issued pursuant to Section 2.1, an executed
copy of the Registration Rights Agreement;
(e) executed copies of the Amended and Restated Strategic Alliance
Agreement and the Amended and Restated Omnibus Amendment to Franchising
Agreements; and
(f) the following documents with respect to the conveyance of the
Parcel:
(1) A Special Warranty Deed executed by Sunburst conveying such
Parcel to Choice, subject only to Permitted Encumbrances and title
exceptions, along with transfer tax forms or affidavits as may be required
for recordation of such Deed in the appropriate jurisdiction;
(2) An assignment agreement executed by Sunburst assigning to
Choice all of Sunburst's rights and obligations under any contracts or
other intangibles relating to the Parcel, together with copies of
documentation relating thereto;
(3) A Title Policy in such form as is reasonably acceptable to
Choice, the cost of which will be shared equally by Sunburst and Choice;
(4) Such affidavits and other documents as may be reasonably
requested by the title insurer to issue the Title Policy in accordance with
the terms of the title commitment, as marked by Choice;
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(5) An affidavit executed by Sunburst confirming that Sunburst is
not a foreign person within the purview of 26 U.S.C. (S) 1445 and the
regulations issued thereunder;
(6) Such resolutions, certificates of good standing and incumbency
certificates and other evidence of authority with respect to Sunburst as
may be reasonably requested by Choice or the title insurer; and
(7) A certificate of the chief executive officer or chief financial
officer of Sunburst confirming the continued accuracy as of the Closing of
the representations and warranties of Sunburst set forth in Section 3.2
above.
5.3 Choice shall, at the Closing, deliver to Sunburst:
(a) the Term Note marked "cancelled"; and
(b) executed copies of the Amended and Restated Strategic Alliance
Agreement and the Amended and Restated Omnibus Amendment to Franchising
Agreements.
5.4 In addition, the Parties shall deliver and execute all other
documents the Parties may reasonably require.
ARTICLE SIX
TERMINATION PROVISIONS
6.1 This HOA will terminate upon the earliest of the following:
(a) Written agreement by the Parties to terminate this HOA; or
(b) In the event of a breach of this HOA by either Party and upon
written notice to the offending Party of said breach; provided, however, that
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the notifying Party may not terminate this HOA if the offending Party has cured
the breach within thirty (30) days; or
(c) On February 28, 2001, if the Closing, as contemplated herein, has
not occurred by that date.
ARTICLE SEVEN
MISCELLANEOUS
7.1 Modification. This HOA may only be amended, modified or
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supplemented in a written agreement signed by both Parties.
7.2 Waiver. No term or condition of this HOA shall be deemed to have
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been waived, nor shall there be any estoppel against the enforcement of any
provision hereof, except by written instrument of the Party charged with such
waiver or estoppel.
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7.3 Governing Law. This HOA shall be construed in accordance with
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the laws of the State of Maryland without giving effect to the principles of
conflict of laws.
7.4 Headings. The headings of the sections of this HOA are for
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convenience only and shall not affect the construction of this HOA.
7.5 Notices. All notices and other communications hereunder shall be
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in writing and shall be delivered by hand or mailed by registered or certified
mail (return receipt requested) to the Parties at the following addresses (or at
such other addresses for a Party as shall be specified by like notice) and shall
be deemed given on the date on which such notice is received:
To Sunburst:
Sunburst Hospitality Corporation
10770 Columbia Pike
Silver Spring, Maryland 20901
Attention: General Counsel
To Choice:
Choice Hotels International, Inc.
10750 Columbia Pike
Silver Spring, Maryland 20901
Attention: General Counsel
7.6 Assignment. Neither Party shall sell, assign, pledge or
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otherwise transfer its interest in this HOA or any part thereof without the
prior written consent of the other Party, except to an entity succeeding to
substantially all of the business and operations of such Party. The
transferring Party shall remain liable for liabilities and obligations existing
at the time of such transfer. Subject to the foregoing, this HOA shall bind and
inure to the benefit of the Parties' respective successors and permitted
assigns.
7.7 Counterparts. This HOA may be executed in two counterparts, each
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of which shall be deemed an original, but which together shall constitute one
and the same instrument.
7.8 No Joint Venture or Agency. This HOA is not intended to create a
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joint venture, partnership or any other similar arrangement between the Parties,
and neither Party shall be authorized to act as an agent of the other Party,
except as expressly provided herein. Notwithstanding the foregoing, each Party
shall be free to designate the other as its agent for appropriate purposes.
7.9 Severability. If any provision of this HOA shall to any extent
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be invalid or unenforceable, the remainder of this HOA shall not be affected
thereby, and each provision shall be valid and enforceable to the fullest extent
permitted by law.
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7.10 Entire Agreement. This HOA contains the entire agreement
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between the Parties hereto. There are no representations, inducements,
promises, arrangements, agreements or undertakings, oral or written, between the
Parties other than those set forth herein respecting the matters addressed in
this HOA. In entering into this HOA, each of the Parties agrees that it did
not rely on any promises, representations or agreements not expressly contained
herein.
7.11 Consent to Jurisdiction. The Parties irrevocably submit to the
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exclusive jurisdiction of (a) the Courts of the State of Maryland in Montgomery
County, and (b) the United States District Court for the State of Maryland for
the purposes of any suit, action or other proceeding arising out of this HOA.
Each party hereto hereby irrevocably designates, appoints and empowers
Corporation Services Company, 1013 Centre Road, Wilmington, DE 19805 as its true
and lawful agent and attorney-in-fact in its name, place and stead to receive on
its behalf service of process in any action, suit or proceeding with respect to
any matters as to which it has submitted to jurisdiction as set forth in the
immediately preceding sentence.
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IN WITNESS THEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
CHOICE HOTELS INTERNATIONAL, INC.
By:
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Name:
Title:
SUNBURST HOSPITALITY CORPORATION
By:
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Name:
Title:
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Exhibit A
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Exhibit B
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Exhibit C
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Exhibit D
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Exhibit E
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Exhibit F
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Schedule 3.1
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EXHIBIT A
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AMENDED AND RESTATED STRATEGIC ALLIANCE AGREEMENT
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This Amended and Restated Strategic Alliance Agreement (this
"Agreement") is entered into as of the _____ day of ______, 2000 (the "Effective
Date") by and between Choice Hotels International, Inc., a Delaware Corporation
formerly known as "Choice Hotels Franchising, Inc." ("Franchising"), and
Sunburst Hospitality Corporation, a Delaware Corporation formerly known as
"Choice Hotels International, Inc." ("Realco") (collectively, the "Parties"),
and amends and restates the original Strategic Alliance Agreement (as amended by
the First Omnibus Amendment Agreement and the Second Omnibus Amendment Agreement
(each as defined below)).
WHEREAS, Realco is engaged in the buying, developing and operating of
hotel properties;
WHEREAS, Franchising is engaged in franchising and managing hotels and
in providing various services for its franchisees to strengthen particular hotel
brands, including the operation of a national reservations system for
Franchising's brands and the conducting of advertising and marketing activities
on behalf of franchisees of Franchising's brands;
WHEREAS, prior to October 15, 1997, Realco was the common parent of a
consolidated group that included as one of its subsidiaries Franchising;
WHEREAS, effective October 15, 1997, the Parties entered into a
Distribution Agreement, pursuant to which Realco distributed all of the
outstanding common stock of Franchising pro rata to Realco's shareholders (the
"Distribution");
WHEREAS, at the time of the Distribution, the Parties determined that
it was mutually beneficial to Realco and Franchising to establish a relationship
whereby Realco would develop or acquire certain hotels to be franchised by
Franchising and the Parties would cooperate with respect to matters of mutual
interest;
WHEREAS, to implement the foregoing and other arrangements between the
Parties, Realco and Franchising entered into that certain Strategic Alliance
Agreement dated as of October 15, 1997 (the "Original Agreement");
WHEREAS, Realco and Franchising entered into an Omnibus Amendment
Agreement (the "First Omnibus Amendment Agreement") dated December 28, 1998, to,
among other things, amend the terms of the Original Agreement, and entered into
a Second Omnibus Amendment Agreement (the "Second Omnibus Amendment Agreement")
dated February 29, 2000, to, among other things, further amend the Original
Agreement as amended by the Omnibus Amendment Agreement (the Original Agreement
as so amended and further amended, the "Amended Strategic Alliance Agreement");
and
WHEREAS, Franchising and Realco desire to further amend the Amended
Strategic Alliance Agreement and to restate the Amended Strategic Alliance
Agreement (as so amended) in a single agreement;
NOW, THEREFORE, Franchising and Realco agree as follows:
1. Definitions
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1.1 Terms defined in the Distribution Agreement shall have the same
meanings when used in this Agreement.
2. Term
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2.1 This Agreement shall go into effect on the date of the Distribution
(the "Effective Date") and shall continue in force until October 15, 2002 (the
"Expiration Date"), except for Section 4.2, which shall survive until October
15, 2003, and Section 7.1 of this Agreement, which shall survive so long as any
franchising agreements between Realco and Franchising are in effect. This
Agreement may be renewed upon the mutual consent of the Parties.
3. Franchising of Realco Hotels; PIP Matters
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3.1 Until the Expiration Date, Realco shall give Franchising written
notice at least fourteen days prior to executing a franchise application with a
third party with respect to the franchising of a hotel or lodging property.
Such written notice shall include a summary term sheet of the proposed
arrangement with the third party. Franchising shall have the opportunity to
present Realco with a plan to brand the hotel or lodging property with one of
its brands, provided that Realco shall have no obligation to enter into an
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agreement with Franchising to use any of its brands on the hotel or lodging
property.
3.2 In the event any Franchising-branded Realco hotel is sold during the
term of the Agreement, the property improvement plan ("PIP") for any such hotel
imposed by Franchising as a condition for relicensing will be essentially
limited to items necessary to pass Franchising's Quality Assurance Review
("QAR"). Accordingly, passing hotels will be subject to a minimal or no PIP,
and failing hotels will be subject to correcting only those items that caused
the QAR failure.
4. Development
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4.1 Realco and Franchising have completed a program under which Realco has
developed the twenty-one MainStay Suite Hotels listed on Appendix I attached
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hereto and which are franchised by Franchising (the "MainStay Quota"). For
purposes of this Section 4.1, the following shall be included in the MainStay
Quota, notwithstanding Realco's transfer of such hotels prior to the Expiration
Date:
(a) The three MainStay Suites properties transferred pursuant to the
Put Call Agreement between Realco and Franchising;
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(b) The two MainStay Suites properties identified in Appendix II
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attached hereto; and
(c) Any MainStay Suite property sold, transferred or conveyed by
Realco if such property is relicensed by the new owner or transferee as a
MainStay Suites property under market terms acceptable to Franchising.
4.2 Realco asserts that if it completes the construction of any new hotel
properties on or prior to October 15, 2003, the first four (or such lesser
number as are constructed) of such newly constructed hotel properties will be
branded with a Franchising brand.
5. New Product/Concept Testing
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5.1 Realco and Franchising desire to continue their relationship under
which certain new products/concepts are tested for Franchising at hotels owned
by Realco. The Parties agree to negotiate in good faith on a case by case basis
with respect to the terms of such participation by Realco in new product/concept
testing. In the event Franchising desires to test or research any new
product/concept in Realco hotels, Franchising shall deliver to Realco a written
description of the new product/concept and plans for its testing or research.
The Parties shall then evaluate appropriate compensation for Realco to receive,
which compensation shall include all direct and indirect costs associated with
the project and an opportunity cost factor, such that the capital invested by
Realco will receive a return on investment equivalent to Realco's incremental
cost of capital.
5.2 In the event Franchising franchises a new brand or concept,
Franchising agrees that no other franchisee shall receive more favorable terms
or conditions than those offered to Realco.
6. Realco Preferred Vendor Programs
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6.1 Except as set forth in this Section 6, Realco intends to make direct
purchases from third parties for products and services respecting its hotels.
Notwithstanding the foregoing, Realco agrees that Franchising may negotiate with
third party vendors of hotel services and products with respect to the provision
of such services and products to Realco. Once an opportunity to make a purchase
on behalf of Realco is identified by Franchising, Franchising will promptly
consult with Realco to ensure that the economic terms and services to be
provided are equal to or better than those available to Realco, and that
entering into such an agreement would not be inconsistent with any then existing
agreements to which Realco is a party. Realco shall then promptly advise
Franchising in writing whether it grants Franchising the authority to negotiate
the relevant purchase for execution by Realco.
6.2 No agreement negotiated by Franchising on behalf of Realco shall
contain a price commitment for a period greater than one year. In addition,
Realco will be entitled to receive the benefits of any other provisions
negotiated by Franchising on behalf of its other franchisees with such vendors.
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7. Dispute and Main Stay Brand Issues Resolution
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7.1 Arbitration. Notwithstanding anything contained in this Agreement to
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the contrary, any claim arising out of or related to this Agreement which has
not been resolved by mutual agreement of the Parties after a written notice of
the claim by the complaining Party to the other Party and a forty-five (45) day
negotiation period in which the Parties try to resolve the claim, shall be
finally settled by arbitration. Such arbitration shall be conducted in
Bethesda, Maryland in accordance with the Commercial Rules of the American
Arbitration Association then in effect, as modified or supplemented herein, or
as the Parties mutually agree otherwise. Notwithstanding the rules of the
arbitral body, the Parties hereto agree (a) that any arbitration shall be
presided over by a single arbitrator, who shall have been admitted to the
practice of law, and be in good standing or on retirement status in any of the
fifty United States or the District of Columbia and have experience in hotel
franchise matters, (b) that the arbitrator shall base his decision on the facts
as presented into evidence, and (c) that the arbitrator shall prepare a written
memorandum of decision setting forth the findings of fact and conclusions of
law. The arbitrator shall be selected by the Parties. If they cannot agree on
such selection within a thirty (30) day period, they shall ask the American
Arbitration Association to appoint an arbitrator. The decision of the
arbitrator shall be final, and judgment may be entered upon it in accordance
with the applicable law in any court having jurisdiction. Any claim for relief
made pursuant to this Agreement shall be made within one (1) year from the date
upon which the claim arose. All costs of the arbitration shall be borne by the
Party determined to be the losing Party by the arbitrator. For purposes of
determining the prevailing and losing Party, the arbitrator may consider offers
of settlement by either Party, or both of them. The Circuit Court of Montgomery
County, Maryland shall have exclusive jurisdiction to enforce this arbitration
provision, for injunctive relief in and of arbitration and for enforcement of
any arbitration award.
8. Modification
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8.1 This Agreement may only be amended, modified or supplemented in a
written agreement signed by both Parties.
9. Waiver
------
9.1 No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
hereof, except by written instrument of the Party charged with such waiver or
estoppel.
10. Governing Law
-------------
10.1 This Agreement shall be construed in accordance with the laws of the
State of Maryland without giving effect to the principles of conflict of laws.
-4-
11. Headings
--------
11.1 The headings of the sections of this Agreement are for convenience
only and shall not affect the construction of this Agreement.
12. Notices
-------
12.1 All notices and other communications hereunder shall be in writing
and shall be delivered by hand or mailed by registered or certified mail (return
receipt requested) to the Parties at the following addresses (or at such other
addresses for a Party as shall be specified by like notice) and shall be deemed
given on the date on which such notice is received:
To Realco:
Sunburst Hospitality Corporation
10770 Columbia Pike
Silver Spring, Maryland 20901
Attention: General Counsel
To Franchising:
Choice Hotels International, Inc.
10750 Columbia Pike
Silver Spring, Maryland 20901
Attention: General Counsel
13. Assignment
----------
13.1 Neither Party shall sell, assign, pledge or otherwise transfer its
interest in this Agreement or any part thereof without the prior written consent
of the other Party, except to an entity succeeding to substantially all of the
business and operations of such Party. The transferring Party shall remain
liable for liabilities and obligations existing at the time of such transfer.
Subject to the foregoing, this Agreement shall bind and inure to the benefit of
the Parties' respective successors and permitted assigns.
14. Counterparts
------------
14.1 This Agreement may be executed in two counterparts, each of which
shall be deemed an original, but which together shall constitute one and the
same instrument.
15. No Joint Venture or Agency
--------------------------
15.1 This Agreement is not intended to create a joint venture, partnership
or any other similar arrangement between the Parties, and neither Party shall be
authorized to act as an agent of the other Party, except as expressly provided
herein. Notwithstanding the foregoing, each Party shall be free to designate
the other as its agent for appropriate purposes.
-5-
16. Severability
------------
16.1 If any provision of this Agreement shall to any extent be invalid or
unenforceable, the remainder of this Agreement shall not be affected thereby,
and each provision shall be valid and enforceable to the fullest extent
permitted by law.
17. Entire Agreement
----------------
17.1 This Agreement contains the entire Agreement between the Parties
hereto with respect to the subject matter hereof. There are no representations,
inducements, promises, arrangements, agreements or undertakings, oral or
written, between the Parties other than those set forth herein respecting the
matters addressed in this Agreement. In entering this Agreement, each of the
Parties agrees that it did not rely on any promises, representations or
agreements not expressly contained herein. The Parties hereto acknowledge and
agree that this Agreement supersedes and replaces the Amended Strategic Alliance
Agreement in its entirety; provided, however, that the provisions of Section 3.1
-------- -------
of the First Omnibus Agreement and Section 3.1 of the Second Omnibus Agreement
shall not be affected hereby.
18. Consent to Jurisdiction
-----------------------
18.1 Subject to Section 7.1 hereof, the parties irrevocably submit to the
exclusive jurisdiction of (a) the Courts of the State of Maryland in Montgomery
County, and (b) the United States District Court for the State of Maryland for
the purposes of any suit, action or other proceeding arising out of this
Agreement. Each Party hereby irrevocably designates, appoints and empowers
Corporation Services Company, 1013 Centre Road, Wilmington, DE 19805 as its true
and lawful agent and attorney-in-fact in its name, place, and stead to receive
on its behalf service of process in any action, suit, or proceeding with respect
to any matters as to which it has submitted to jurisdiction as set forth in the
immediately preceding sentence.
-6-
IN WITNESS THEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
CHOICE HOTELS INTERNATIONAL, INC.
By:
------------------------------------
Name:
Title:
SUNBURST HOSPITALITY CORPORATION
By:
------------------------------------
Name:
Title:
-7-
APPENDIX I
Prop. # Location Opening Date
1 850 Plano, TX 10/21/96
2 854 Warwick, RI 9/17/97
3 857 Blue Ash, OH 11/24/97
4 856 Louisville, KY 1/19/98
5 861 Indianapolis, IN 1/19/98
6 860 Greenville, SC 1/23/98
7 853 Kansas City, MO 1/30/98
8 855 Brentwood, TN 3/19/98
9 859 Lake Mary, FL 3/25/98
10 851 Denver Tech, CO 4/20/98
11 858 Jacksonville, FL 5/25/98
12 863 Pittsburgh, PA 7/27/98
13 862 Fishkill, NY 8/5/98
14 852 Miami Springs, FL 12/28/98
15 864 Tempe, AZ 2/22/99
16 867 Peabody, MA 4/26/99
17 865 Annapolis, MD 6/24/99
18 869 North Charleston, SC 9/3/99
19 870 Malvern, PA 10/7/99
20 868 Raleigh, NC 10/22/99
21 874 Secaucus, NJ 3/3/00
APPENDIX II
-----------
HOTELS PERMITTED TO BE RE-FLAGGED
(LIMIT TWO)
Blue Ash, Ohio
Louisville, Kentucky
Indianapolis, Indiana
Kansas City, Missouri
Jacksonville, Florida
North Charleston, South Carolina
Raleigh, North Carolina
Lake Mary, Florida
Denver Tech, Colorado
EXHIBIT B
---------
AMENDED AND RESTATED OMNIBUS AMENDMENT TO FRANCHISING AGREEMENTS
----------------------------------------------------------------
This Amended and Restated Omnibus Amendment to Franchising Agreements
between Choice Hotels International, Inc. ("Choice" or, as sometimes used
herein, "Franchising") and Sunburst Hospitality Corporation ("Sunburst" or, as
sometimes used herein, "Realco") (this "Agreement") is made this 20th day of
September, 2000 by and between Choice and Sunburst (the "Parties").
WHEREAS, through the date hereof, Choice and Sunburst have entered
into the hotel or lodging property franchise agreements listed on Schedule A
----------
attached hereto (each, an "Existing Franchise Agreement" and together the
"Existing Franchise Agreements");
WHEREAS, Choice and Sunburst have amended the Existing Franchise
Agreements pursuant to amendments added to that certain Strategic Alliance
Agreement dated October 15, 1997 between the Parties (the "Strategic Alliance
Agreement") pursuant to certain provisions of that certain Omnibus Amendment
Agreement between the Parties dated as of December 28, 1998 (the "First Omnibus
Amendment Agreement") and amendments added to the Strategic Alliance Agreement
and to the Existing Franchise Agreements in each case pursuant to that certain
Second Omnibus Amendment Agreement between the Parties dated February 28, 2000
(the "Second Omnibus Amendment Agreement");
WHEREAS, pursuant to that certain Heads of Agreement dated as of
[ ] 2000, Sunburst shall substantially contemporaneously with the
execution of this Agreement on the date hereof, subject to the satisfaction of
certain conditions contained in the Heads of Agreement, issue to Choice a Senior
Subordinated Note due 2007, in the principal amount at maturity of $70,831,000
and with an accreted value on such date of $60,000,000; and
WHEREAS, Choice and Sunburst desire to restate the amendments to the
Existing Franchising Agreements previously contained in the Strategic Alliance
Agreement (pursuant to the First Omnibus Amendment Agreement and the Second
Omnibus Amendment Agreement) to further amend the Existing Franchise Agreements;
NOW, THEREFORE, Choice and Sunburst agree as follows:
1. Definitions.
-----------
1.1 Any capitalized term used within this Agreement and not defined within
this Agreement will have the meaning ascribed to such term in the Strategic
Alliance Agreement.
2. Liquidated Damages Provision and Other Amendments.
-------------------------------------------------
2.1 Liquidated Damages Provision.
----------------------------
(a) Any and all franchising agreements entered into prior to, on or
after December 28, 1998, by and between Franchising and Realco (or any of their
respective predecessors or affiliates), except any franchising agreements
related to (i) Mainstay Suites and Sleep Inns or (ii) any other hotels owned by
Realco that carried a Franchising brand which is not sold by Realco within three
years from the date such hotel was reflagged with a different non-Franchising
brand (the "Reflagged Hotels"), are hereby amended such that any references to
liquidated damages are deleted and Franchising agrees that it waives any claim
it may have against Realco for lost future profits arising from such franchising
agreements.
(b) Provided that Realco is not in default under the $115,000,000
Subordinated Note dated October 15, 1997 (or any replacement or restructuring of
such Note) and provided, further, that, at the time of any such default, Choice
remains the holder of such Note, Section 10.d.2 of the respective franchising
agreements entered into prior to, on or after December 28, 1998 by and between
Franchising and Realco related to MainStay Suite Hotels and Sleep Inns or any
Reflagged Hotel is hereby amended by include the following:
"Any liquidated damages to be paid pursuant to this section
will not exceed a maximum of $100,000."
(c) Notwithstanding the terms of any and all franchising agreements
entered into prior to, on or after December 28, 1998 by and between Franchising
and Realco (or any of their respective predecessors or affiliates) related to
the twenty-one MainStay Suite Hotels subject to the MainStay Quota, Realco
agrees that it shall not reflag any such MainStay Suite Hotel, through a sale or
otherwise, or seek termination of any such franchising agreement or fail to
enter into a franchising agreement for any such hotels or allow any other brand
to be flagged to any such hotel prior to October 15, 2003; provided, however,
-------- -------
Realco may prior to October 15, 2003: (i) reflag, or permit the reflagging of,
up to two of the properties so identified on Appendix I attached hereto; and
----------
(ii) sell, transfer or convey any such MainStay Suites hotel if such property is
relicensed by the new owner or transferee as a MainStay Suites under market
terms acceptable to Franchising. Upon an event specified in clause (i) or (ii)
of the preceding sentence, Franchising shall terminate the respective franchise
agreements and waive any claim for damages against Realco caused by such
reflagging, sale, transfer or termination including the obligation to pay
liquidated damages. After October 15, 2003, Realco may reflag, or permit the
reflagging of, any MainStay Suite Hotels and terminate any such franchising
agreement and Franchising shall waive any claim against Realco for damages
caused by such reflagging or termination, including liquidated damages, if (x)
Realco gives thirty days prior written notice to Franchising and (y) Realco pays
Franchising $100,000 as a termination
-2-
fee for each MainStay Suites Hotel, other than the two properties referred to in
clause (i) above, that is to be reflagged or for which the franchising agreement
is to be terminated. Franchising and Realco agree that irreparable damage would
occur in the event any of the provisions of this Section 2.1(c) were not
performed in accordance with the terms hereof and that Franchising's remedy at
law for any breach of Realco's obligations hereunder would be inadequate. Realco
agrees and consents that temporary and permanent injunctive relief may be
granted in any proceeding which may be brought to enforce any provision hereof
without the necessity of proof of actual damage.
(d) Franchising and Realco acknowledge that the reference in Sections
2.1(a) and (b) above to the liquidated damages provision applicable to Sleep Inn
franchise agreements is intended as a termination fee such that Realco has the
right at any time to terminate any such Sleep Inn franchise agreements upon
payment to Franchising of $100,000 per agreement and Franchising shall waive any
claim against Realco for damages caused by such termination, including
liquidated damages.
(e) Franchising and Realco acknowledge that pursuant to Sections
2.1(a) and (b) above, if Realco reflags a hotel or lodging property that is
neither a Sleep Inn nor MainStay Suite Hotel and that hotel or lodging property
is not sold by Realco within three years from the date it was flagged with a
non-Franchising brand, then on such third anniversary Realco shall pay
Franchising $100,000 in liquidated damages for each such reflagged hotel or
lodging property and Franchising shall waive any claim against Realco for
damages caused by such reflagging, including liquidated damages.
2.2 Other Amendments to Franchising Agreements. Notwithstanding any
------------------------------------------
other terms in any franchising agreements entered into prior to, on or after
December 28, 1998, by and between Franchising and Realco (or any of their
respective predecessors or affiliates), the following terms shall apply from and
after such date to the relevant franchising agreements:
(a) Realco shall pay to Franchising in cash an application fee of
$20,000 upon execution of a franchise agreement from and after December 28,
1998.
(b) No royalty, marketing or reservation fees shall be payable for a
period of two years with respect to the first ten such agreements entered
into by Realco after December 28, 1998 and at the end of such period, the
initial fee schedule will commence; and such ten agreements shall contain a
provision permitting termination by either party only on the tenth or
fifteenth anniversary of the date of the contract.
(c) Franchising agrees that if Realco sells any property that is the
subject of an existing franchising agreement, (i) if that property is not
past due on any fees or failing
-3-
a quality assurance review then Franchising will enter into a new franchise
agreement on customary market terms with the buyer (without addendum or
property improvement plan) and (ii) if that property is not past due on any
fees but is failing a quality assurance review, Franchising will enter into
a franchising agreement on customary market terms with a property
improvement plan containing only those items necessary to pass such quality
assurance review.
3. Franchise Fee Credits. Section 4 of each Existing Franchising
---------------------
Agreement listed on Appendix II attached hereto [MainStay Suites] is amended
-----------
effective as of the date later to occur of (a) its effective date and (b)
February 29, 2000, to add new subsections as follows:
(h) As of February 29, 2000, Franchising shall establish an account to
serve as a mechanism for administering the Shortfall Balance, as defined in
and pursuant to this Section 4. The initial amount credited to the
Shortfall Balance on February 29, 2000, shall be $2,142,887 (the "Shortfall
Amount"), which represents the amount by which an agreed upon target
Cumulative EBITDA for the MainStay Suites hotels subject to the MainStay
Quota (excluding the Put Call Properties) for the period from October 1,
1996 through December 31, 1999 exceeds the actual Cumulative EBITDA for
such period.
(i) For each year beginning January 1, 2001 until the Shortfall Freeze
Date (as defined below), the Shortfall Balance shall be adjusted (an
"Adjustment") by 50% of the amount, if any, by which the Target Cumulative
EBITDA (as set forth on Appendix III attached to the Amended and Restated
------------
Omnibus Amendment to Franchising Agreements dated [ ], 2000) for the
preceding year exceeds the actual Cumulative EBITDA for the MainStay Suites
Hotels subject to the MainStay Quota (exclusive of the Put Call Properties)
for such year as finally determined pursuant to clause (j) below. Each
year, on or prior to February 15 of such year, Realco shall determine the
actual Cumulative EBITDA for the preceding year in a manner consistent with
the calculation of the Target Cumulative EBITDA and whether an Adjustment
is warranted and shall deliver written notice thereof to Franchising
together with the monthly operating statements for each applicable hotel.
From and after the earlier of October 15, 2003 and the first year in which
no Adjustment is required pursuant to this clause (i) (the "Shortfall
Freeze Date"), no further Adjustments shall be determined pursuant to this
paragraph and the Shortfall Balance shall thereafter be zero.
(j) The Shortfall Balance, if any, shall be applied by Realco as a
credit against royalty, reservation and marketing fees ("Fees") payable to
Franchising as follows:
-4-
(1) First, to Fees payable pursuant to the franchise agreements
related to the MainStay Suites Hotels subject to the MainStay Quota
for each month prior to the tenth anniversary of the date of each such
franchise agreement. The Fee credit shall be applied no later than the
fifteenth day of each month against Fees payable as of the last day of
the preceding month; and
(2) Second, to Fees payable pursuant to franchise agreements for
MainStay Suite Hotels other than those referred to in (i)(1) above or
for any brand developed by Franchising after the date hereof. The Fee
credit shall be applied no later than the fifteenth day of each month
against Fees payable as of the last day of the preceding month.
Prior to the Shortfall Freeze Date, any remainder of the Shortfall Balance
shall carry forward until used. From and after the Shortfall Freeze Date,
the Shortfall Balance shall be zero.
(k) Franchising or its representatives shall have the right to review
and audit the books and records of Realco for the purposes of determining
the Shortfall Amount and the Fees payable in any particular month. If
Franchising agrees with the Shortfall Amount determined by Realco, then
that amount shall be deemed finally determined. In the event Franchising
disagrees with the Shortfall Amount or the Fees payable as determined by
Realco, then Franchising shall so notify Realco in writing within 10 days
of receipt of notice from Realco of the Shortfall Amount. If Franchising
and Realco are unable to agree in good faith by the tenth day of any month,
then Franchising shall, within 10 days from its delivery of the notice to
Realco, retain a firm of independent accountants to determine the Shortfall
Amount and/or the Fees payable. The accountant shall deliver its
determination no later than the last day of such month. The cost of such
accountants shall be borne by Franchising unless the accountant's
determination of the Shortfall Amount and/or Fees payable deviates by 5% or
more from the amount determined by Realco, in which case Realco shall bear
the cost. If Franchising and Realco agree with the accountants
determination of the Shortfall Amount and/or the Fees payable, then that
amount shall be deemed finally determined. If Franchising or Realco
disagree with the accountants determination, then the parties shall settle
the disagreement and the Shortfall Amount and/or the Fees payable shall be
finally determined in accordance with the dispute resolution mechanism set
forth in the Strategic Alliance Agreement, as amended. Realco agrees that
it shall cooperate with Franchising and the accountant and provide them
reasonable access to its books records and employees in connection with
their review of the Shortfall Amount and/or the Fees payable.
-5-
4. Elimination of Right to First Refusal. Notwithstanding anything
-------------------------------------
contained in any Existing Franchising Agreement entered into by and between
Choice and Sunburst (or any of their respective predecessors or affiliates), the
provision regarding the right of first refusal contained in Section ____ of each
such Existing Franchising Agreement is deleted in its entirety effective the
date later to occur of (a) its effective date and (b) February 29, 2000.
5. New Franchising Agreements. If at any time after the date hereof,
--------------------------
Sunburst or any of its affiliates enter into a new franchising agreement with
Choice or any of its affiliates with respect to any of its hotel or lodging
properties, including, without limitation, as a result of reflagging, the
parties shall enter in a franchise agreement substantially in the form of
Appendix IV attached hereto with respect to such property, providing for payment
- -----------
of fees as set forth in Schedule 1 thereto.
6. Dispute and MainStay Brand Issues Resolution.
--------------------------------------------
6.1 Arbitration. Notwithstanding anything contained in this Agreement to
-----------
the contrary, any claim arising out of or related to this Agreement or any
franchise agreement between the Parties or their affiliates which has not been
resolved by mutual agreement of the Parties after a written notice of the claim
by the complaining Party to the other Party and a forty-five (45) day
negotiation period in which the Parties try to resolve the claim, shall be
finally settled by arbitration. Such arbitration shall be conducted in
Bethesda, Maryland in accordance with the Commercial Rules of the American
Arbitration Association then in effect, as modified or supplemented herein, or
as the Parties mutually agree otherwise. Notwithstanding the rules of the
arbitral body, the Parties hereto agree (a) that any arbitration shall be
presided over by a single arbitrator, who shall have been admitted to the
practice of law, and be in good standing or on retirement status in any of the
fifty United States or the District of Columbia and have experience in hotel
franchise matters, (b) that the arbitrator shall base his decision on the facts
as presented into evidence, and (c) that the arbitrator shall prepare a written
memorandum of decision setting forth the findings of fact and conclusions of
law. The arbitrator shall be selected by the Parties. If they cannot agree on
such selection within a thirty (30) day period, they shall ask the American
Arbitration Association to appoint an arbitrator. The decision of the
arbitrator shall be final, and judgment may be entered upon it in accordance
with the applicable law in any court having jurisdiction. Any claim for relief
made pursuant to this Agreement shall be made within one (1) year from the date
upon which the claim arose. All costs of the arbitration shall be borne by the
Party determined to be the losing Party by the arbitrator. For purposes of
determining the prevailing and losing Party, the arbitrator may consider offers
of settlement by either Party, or both of them. The Circuit Court of Montgomery
County, Maryland shall have exclusive jurisdiction to enforce this arbitration
provision, for injunctive relief in and of arbitration and for enforcement of
any arbitration award.
-6-
7. Miscellaneous Provisions.
------------------------
7.1 Agreements Remain in Effect. Any franchising agreement entered into
---------------------------
by and between Choice and Sunburst referred to in this Agreement shall remain
fully effective and is changed only as specifically provided herein and shall
bind the Parties to each in all respects as originally contemplated.
7.2 Conflicts. In the event of a conflict between the terms of this
---------
Agreement and any franchising agreements entered into by and between Choice and
Sunburst referred to in this Agreement, the terms and provisions of this
Agreement shall control.
7.3 Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which taken together shall constitute one instrument.
7.4 Board Approval. This Agreement has been approved by the Board of
--------------
Directors of both Choice and Sunburst.
-7-
IN WITNESS WHEREOF, intending to be legally bound hereby, the Parties
hereto have executed this Agreement as of the day and year first written above.
CHOICE HOTELS INTERNATIONAL, INC.
By:
-----------------------------------
Name:
Title:
SUNBURST HOSPITALITY CORPORATION
By:
-----------------------------------
Name:
Title:
-8-
Schedule A
----------
- ------------------------------------------------------------------------------------------
Clarion Hotel Clarion Hotel
3101 Airport Blvd. 612 Cathedral Street
Mobile, AL 36606 Baltimore, MD 21201
334/476-6400 410/727-7101
- ------------------------------------------------------------------------------------------
MainStay Suites Clarion Inn Comfort Inn N.W.
2165 W. 15th Street 5301 N.W. 36th 10 Wooded Way
Tempe, AZ 85281 Miami Springs, FL 33166 Pikesville, MD 21208
602/557-8880 305/871-1000 410/484-7700
- ------------------------------------------------------------------------------------------
Clarion on the Lake Comfort Inn & Suites Quality Suites Shady Grove
4813 Central Avenue 5301 N.W. 36th 3 Research Court
(SR 7 So.) Miami Springs, FL 33166 Rockville, MD 20850
Hot Springs, AR 71902 305/871-6000 301/840-0200
501/525-1391
- ------------------------------------------------------------------------------------------
Quality Hotel - Maingate Sleep Inn Miami Airport Sleep Inn
616 Convention Way 105 Fairway Drive 2 Research Court
Anaheim, CA 92802 Miami Springs, FL 33166 Rockville, MD 20850
714/750-3131 305/871-7553 301/948-8000
- ------------------------------------------------------------------------------------------
Quality Hotel Airport MainStay Suites Comfort Inn
5249 W. Century Blvd. 101 Fairway Drive 90 Main Mall Road
Los Angeles, CA 90045 Miami Springs, FL 33166 Portland, ME 04106
310/645-2200 305/870-0448 207/775-0409
- ------------------------------------------------------------------------------------------
Comfort Inn by the Bay Comfort Inn Quality Inn
2775 Van Ness Avenue 830 Lee Road 40455 Ann Arbor Road
San Francisco, CA 94109 Orlando, FL 32810 Plymouth, MI 48170
415/928-5000 407/629-4000 313/455-8100
- ------------------------------------------------------------------------------------------
Sleep-Denver Int'l Airport Comfort Inn MainStay Suites
15900 E. 40th Ave./Gateway Pk 1901 Palm Beach Lake Blvd. 9701 North Shannon Drive
Aurora, CO 80011 West Palm Beach, FL 33409 Kansas City, MO 64153
303/373-1616 561/689-6100 816/891-0111
- ------------------------------------------------------------------------------------------
MainStay Suites Quality Inn & Suites Sleep Inn
9253 E. Costill Avenue 9090 Wesleyan Road 7611 NW 97th Terrace
Greenwood Village, CO 80112 Indianapolis, IN 46268 Kansas City, MO 64153
303/858-1669 317/875-7676 816/891-0111
- ------------------------------------------------------------------------------------------
Sleep - Denver Tech MainStay Suites Clarion Hotel
9257 E. Costilla Avenue 8520 Northwest Blvd. 3333 South Glenstone Ave.
Greenwood Village, CO 80112 Indianapolis, IN 46278 Springfield, MO 65804
303/662-9950 317/334-7829 417/883-6550
- ------------------------------------------------------------------------------------------
Quality Suites Comfort Inn Westport
1050 E. Newport Center Dr. 12031 Lackland Road
Deerfield Beach, FL 33442 St. Louis, MO 63146
954/570-8888 314/878-1400
- ------------------------------------------------------------------------------------------
Comfort Suites MainStay Suites Comfort Inn
1040 E. Newport Center Dr. 1650 Alliant Drive 5822 Westpark Drive
Deerfield Beach, FL 33442 Louisville, KY 40299 Charlotte, NC 28217
954/570-8887 502/495-0944 704/525-2626
- ------------------------------------------------------------------------------------------
Comfort Inn Deerfield Beach East Comfort Inn University Clarion Hotel
50 S.E. 20th Avenue 2445 S. Acadian 321 West Woodlawn Road
Deerfield Beach, FL 33441 Baton Rouge, LA 70808 Charlotte, NC 28217
954/428-0650 225/927-5790 704-523-1400
- ------------------------------------------------------------------------------------------
Sleep Inn Sleep Inn
10322 Plaza Americana Dr. 8325 North Tryon Street
Baton Rouge, LA 70816 Charlotte, NC 28262
225/926-8488 704/549-4544
- ------------------------------------------------------------------------------------------
MainStay Suites Comfort Inn
4693 Salisbury Road 50 Dayton Street
Jacksonville, FL 32256 Danvers, MA 01923
904/296-0661 508/777-1700
- ------------------------------------------------------------------------------------------
Quality Inn Southpoint Comfort Suites
4660 Salisbury Road 106 Bank Road
Jacksonville, FL 32256 Haverhill, MA 01832
904/281-0900 508/374-7755
- ------------------------------------------------------------------------------------------
MainStay Suites MainStay Suites MainStay Suites
1040 Greenwood Blvd. 200 Jubilee Drive 2601 Appliance Court
Lake Mary, FL 32746 Peabody, MA 01960 Raleigh, NC 27604
407/829-2332 978/531-6632 919/807-9970
- ------------------------------------------------------------------------------------------
Comfort Inn MainStay Suites Quality Suites
6261 Collins Avenue 120 Admiral Cochrane Drive 4400 Capital Blvd.
Miami Beach, FL 33140 Annapolis, MD 21401 Raleigh, NC 27604
305/868-1200 410/571-6600 919/876-2211
- -------------------------------------------------------------------------------------------
Sleep Inn
2617 Appliance Court
Raleigh, NC 27604
919/755-6005
- ---------------------------------------------------
Comfort Inn Sleep Inn
2300 Yale Blvd. SE 750 Six Flags Drive
Albuquerque, NM 87106 Arlington, TX 76011
505/243-2244 817/649-1010
- ----------------------------------------------------
Comfort Inn Sleep Inn
8315 4th Avenue 15675 JFK Blvd.
Brooklyn, NY 11209 Houston, TX 77032
718/238-3737 281/442-7770
- ----------------------------------------------------
MainStay Suites MainStay Suites
25 Merritt Blvd. 4709 West Plano Pkwy.
Fishkill, NY 12524 Plano, TX 75093
914/897-2800 972/596-9966
- ----------------------------------------------------
MainStay Suites Sleep Inn
4630 Creek Road 4801 W. Plano Pkwy.
Blue Ash, OH 45242 Plano, TX 75093
513/985-9992 972/867-1111
- ---------------------------------------------------
Comfort Inn Clarion Hotel
5345 Broadmoor NW 1981 N. Central Expwy.
Canton, OH 44709 Richardson, TX 75080
330/492-1331 972/644-4000
- ---------------------------------------------------
Comfort Inn Sleep Inn
17550 Rosbough Drive 1990 I-35N Frontage Rd.
Middleburg Hts, OH 44130 Round Rock, TX 78681
216/234-3131 512/310-1111
- ---------------------------------------------------
Clarion Hotel Sleep Inn
7007 N. High Street 8318 IH 10 W.
Worthington, OH 43085 San Antonio, TX 78230
614/436-0700 210/344-5400
- ---------------------------------------------------
Comfort Inn Quality Inn Midvalley
1200 Mae Street 4465 S. Century Drive
Hummelstown, PA 17036 Salt Lake, UT 84123
717/566-2050 801/268-2533
- ---------------------------------------------------
MainStay Suites Quality Hotel
8 East Swedesford Road 1200 N. Courthouse Road
Malvern, PA 19355 Arlington, VA 22201
610/695-9200 703/524-4000
- ---------------------------------------------------
Quality Inn & Suites
1809 West Mercury Blvd.
Hampton, VA 23666
757/838-5011
- ---------------------------------------------------
MainStay Suites Quality Inn
268 Metro Center Blvd. 8008 West Broad Street
Warwick, RI 02886 Richmond, VA 23294
401/732-6667 804/346-0000
- ---------------------------------------------------
Clarion Hotel
2727 Ferndale Drive, NW
Roanoke, VA 24017
540/362-4500
- ---------------------------------------------------
MainStay Suites Comfort Inn Tysons
5045 N. Arco Lane 1587 Springhill Road
N. Charleston, SC 29418 Vienna, VA 22182
843/770-3440 703/448-8020
- ---------------------------------------------------
Clarion Hotel
4453 Bonney Road
Virginia Beach, VA 23462
757/473-1700
- ---------------------------------------------------
Comfort Inn
2 Tangelwood Drive
Hilton Head, SC 29928
803/842-6662
- ---------------------------------------------------
MainStay Suites
One Plaza Drive
Secaucus, New Jersey 07094
201/553-9700
- ---------------------------------------------------
APPENDIX I
----------
HOTELS PERMITTED TO BE RE-FLAGGED
(LIMIT TWO)
Blue Ash, Ohio
Louisville, Kentucky
Indianapolis, Indiana
Kansas City, Missouri
Jacksonville, Florida
North Charleston, South Carolina
Raleigh, North Carolina
Lake Mary, Florida
Denver Tech, Colorado
APPENDIX II
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Prop. # Location Opening Date
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1 850 Plano, TX 10/21/96
2 854 Warwick, RI 9/17/97
3 857 Blue Ash, OH 11/24/97
4 856 Louisville, KY 1/19/98
5 861 Indianapolis, IN 1/19/98
6 860 Greenville, SC 1/23/98
7 853 Kansas City, MO 1/30/98
8 855 Brentwood, TN 3/19/98
9 859 Lake Mary, FL 3/25/98
10 851 Denver Tech, CO 4/20/98
11 858 Jacksonville, FL 5/25/98
12 863 Pittsburgh, PA 7/27/98
13 862 Fishkill, NY 8/5/98
14 852 Miami Springs, FL 12/28/98
15 864 Tempe, AZ 2/22/99
16 867 Peabody, MA 4/26/99
17 865 Annapolis, MD 6/24/99
18 869 North Charleston, SC 9/3/99
19 870 Malvern, PA 10/7/99
20 868 Raleigh, NC 10/22/99
21 874 Secaucus, NJ 3/3/00
EXHIBIT C
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[Description of Documents to come]