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 Xxxxxx-Xxxx Corp., SB Motel
Raleigh Corp., and SB Motel Charlotte I-85 Corp., (collectively,
"Sellers"), Xxxxxx Hotels Properties Corp. ("Purchaser") and
Xxxxxx Hotels Corporation ("Xxxxxx").
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, Xxxxxx, 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, Xxxxxx, Sellers and Purchaser hereby
agree that the Agreement is hereby amended as follows:
1. The first sentence of Section 12.4 of the Agreement
is hereby deleted in its entirety and replaced with the
following:
"Except as provided in Section 12.5, each of the
representations and warranties contained in Sections
12.1 and 12.3 (collectively, the "Base Reps") shall
survive the Closing until the first anniversary of the
Closing Date, provided further that, upon a sale,
assignment or other transfer of any of the Premises by
Purchaser, the representations and warranties set
forth in Section 12.3 shall not survive with respect
to the portion of the Premises being transferred
thereunder, if sooner."
2. Purchaser acknowledges and agrees that Sellers (as
such term and all other terms which are capitalized but not
defined herein are defined in the Agreement) have designated SB
Motel Corp. as the payee of the Note pursuant to Section 5.4(a)
of the Agreement and as the transferee and holder of the
certificates representing the Shares. SB Motel Corp. shall be
entitled to all of the rights and benefits of Sellers under the
Agreement which relate to the Note and/or the Shares, including,
without limitation, all rights and benefits provided for in
Section 15 of the Agreement and any and all rights under other
covenants, representations or warranties in the Agreement or
related documents relating to the Note or the Shares.
Accordingly, but without limiting the generality of the
foregoing, Section 15 of the Agreement is hereby deleted in its
entirety and the following substituted therefor:
"Section 15. XXXXXX COVENANTS.
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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, Xxxxxx 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 Xxxxxx ("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 Xxxxxx
with respect to such underwriting within 20 days after
written notice from Xxxxxx 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
Xxxxxx'x judgment to those available from an
alternative underwriter, Xxxxxx 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 Xxxxxx after giving such due
consideration wishes to accept an offer from an
alternative underwriter (the "Alternative
Underwriter") in connection with any Equity Offering,
Xxxxxx 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 Xxxxxx
with respect to such
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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"), Xxxxxx shall
accept the Matching Offer of Salomon Brothers Inc to
be the principal underwriter. If Salomon Brothers Inc
does not provide Xxxxxx with a Matching Offer during
the Right of First Refusal Period, Xxxxxx 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, Xxxxxx shall not
have entered into such underwriting commitment
agreement with the Alternative Underwriter, Xxxxxx
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.
Xxxxxx 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 Xxxxxx shall not
include any type of mortgage, line of credit, bond or
debenture financing.
15.2 Xxxxxx hereby covenants with Sellers that
from and after the Closing, any public announcements
or disclosures made by Xxxxxx 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 Xxxxxx by SBMC, Xxxxxx
shall refrain from making
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such public disclosures or announcements.
15.3 (a) Xxxxxx hereby covenants with SBMC that,
in the event a Closing takes place hereunder, Xxxxxx
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. Xxxxxx 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, Xxxxxx 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
Xxxxxx, including the sale of some or all of the
Shares in a public offering or, if requested by SBMC,
subject to receipt by Xxxxxx of such information
(including information relating to purchasers) as
Xxxxxx 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 Xxxxxx 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 Xxxxxx
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 Xxxxxx
undertakes to effect a registration after the
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conclusion of such transaction to permit such shares
to be freely tradeable by the purchasers thereof.
Xxxxxx 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 Xxxxxx'x best efforts, Xxxxxx
fails to keep the Shelf Registration effective, Xxxxxx
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, Xxxxxx 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, Xxxxxx and E.
Xxxxxxx Xxxxxx covenant that E. Xxxxxxx Xxxxxx acting
in his individual capacity shall not sell any shares
of Xxxxxx Common Stock other than under and pursuant
to Rule 144 of the Securities Act. E. Xxxxxxx Xxxxxx
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, Xxxxxx 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
Xxxxxx, Xxxxxx 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
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Xxxxxx no later than 15 days after Xxxxxx'x notice is
given, setting forth the number or amount of Shares
which SBMC requests to be included in the registration
statement, and Xxxxxx 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) Xxxxxx 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) Xxxxxx
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, Xxxxxx 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 Xxxxxx'x principal
financial officer, stating (a) Xxxxxx'x name, address
and telephone number (including area code), (b)
Xxxxxx'x Internal Revenue Service identification
number, (c) Xxxxxx'x SEC file number, (d) the number
of shares of Xxxxxx'x common stock and the number of
shares of any preferred stock of Xxxxxx outstanding as
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shown by the most recent report or statement published
by Xxxxxx, and (e) whether Xxxxxx 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 Xxxxxx is not required to file reports
in compliance with either Section 13 or Section 15(d)
of the Exchange Act, Xxxxxx will, at its expense,
forthwith upon the written request of SBMC, make
available adequate current public information with
respect to Xxxxxx 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, Xxxxxx shall enter into a customary
underwriting agreement providing for customary
indemnities for the underwriters and the selling
security holders. Xxxxxx 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, Xxxxxx 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) Xxxxxx 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 Xxxxxx'x Board of
Directors, designated by SBMC, who shall be
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invited to attend all meetings of the Board of
Directors and shall be compensated in the same manner
as are non-employee directors of Xxxxxx. Such observer
shall be indemnified by Xxxxxx 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
Xxxxxx (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 Xxxxxx
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, Xxxxxx
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, Xxxxxx will support the
nomination of, and Xxxxxx'x 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 Xxxxxx 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 Xxxxxx at which directors
are to be elected, Xxxxxx shall use its reasonable
efforts to solicit from the shareholders of Xxxxxx
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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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: Xxxx X. Xxxx
Title: Vice President
SB MOTEL DURHAM-RESEARCH TRIANGLE PARK
CORP.
By:______________________________
Name: Xxxx X. Xxxx
Title: Vice President
SB MOTEL CARY CORP.
By:______________________________
Name: Xxxx X. Xxxx
Title: Vice President
SB MOTEL STATESVILLE CORP.
By:______________________________
Name: Xxxx X. Xxxx
Title: Vice President
SB MOTEL WILMINGTON CORP.
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By:______________________________
Name: Xxxx X. Xxxx
Title: Vice President
SB MOTEL COLUMBIA CORP.
By:______________________________
Name: Xxxx X. Xxxx
Title: Vice President
SB MOTEL CHARLESTON CORP.
By:______________________________
Name: Xxxx X. Xxxx
Title: Vice President
SB MOTEL ALBANY CORP.
By:______________________________
Name: Xxxx X. Xxxx
Title: Vice President
SB MOTEL VIRGINIA BEACH CORP.
By:______________________________
Name: Xxxx X. Xxxx
Title: Vice President
SB MOTEL XXXXXX-XXXX CORP.
By:______________________________
Name: Xxxx X. Xxxx
Title: Vice President
SB MOTEL RALEIGH CORP.
By:______________________________
Name: Xxxx X. Xxxx
Title: Vice President
SB MOTEL CHARLOTTE I - 85 CORP.
By:______________________________
Name Xxxx X. Xxxx
Title: Vice President
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PURCHASER: XXXXXX HOTELS PROPERTIES CORP.
By:______________________________
Name: E. Xxxxxxx Xxxxxx
Title: Chairman and Chief Executive
Officer
XXXXXX: XXXXXX HOTELS CORPORATION
By:______________________________
Name: E. Xxxxxxx Xxxxxx
Title: Chairman and Chief Executive
Officer
ESCROW AGENT: LAWYERS TITLE INSURANCE CORPORATION
(Solely as Escrow Agent)
By:__________________________________
Name:
Title:
E. Xxxxxxx Xxxxxx 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. XXXXXXX XXXXXX
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