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HomeMy WebLinkAbout99-03609 ---7) r i 1 SUN 14 '99 12:11 FR BUCHANAN INGERSOLL Arthur L. Pressman, Id. No. 10124 Constantine T. Fournaris, Id. No. 63902 Buchanan Ingersoll Professional Corporation Eleven Penn Center 1835 Market Street,14th Floor Philadelphia, PA 19103 Tel. No. (215) 66S-3910 Fa: No. (215) 665-8760 Attorneys for Plaintiff Travelodge Hotels, Ina TO 17172406573 P.02 COURT OF COMMON PLEAS COUNTY OF CUMBERLAND COUNTY, PA TRAVELODGE HOTELS, INC., : CIVIL CASE NO. Plaintiff, 36, C? VS. ALL AMERICAN PLAZAS, INC., a Pennsylvania corporation Defendant. . NOTICE You Sava Fern medpl tout. 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YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. CmsberLnd County Bar A,aoeiution Tbo Ub" Avenue CartWe.FA 17W3 Tole- ('717) 2493166 or 1(806) 990.9108 LLEYE ESTA DEMANDA A UN AEOGADO INDMIATEMENTE, SI NO TIENE ABOGADO O 51 NO TIENE EL D1NERO SUFICIENTE DE PAGAR TAL SERVICIO, VAYA EN PERSONA0 LLAMB POR TRI"ONO A LA OFICINA BUPA D1RECCION SEENCUENfRAESCRITA ABAJO PARA AVERIGUAR DONDE SE PUEDE CONSEGUIR ASISTENCTALEGAL Cemb4lmd Coomy BarAaodation Two Llbety Avenue C olde. PA 17013 Te1c. (717) 2493166 or 1(800) M9106 Arthur L. Pressman, Id. No. 10124 Constantine T. Fournaris, Id. No. 63902 Buchanan Ingersoll Professional Corporation Eleven Penn Center 1535 Market Street, 14th Floor Philadelphia, PA 19103 Tel. No. (215) 665-3910 Fax No.(215)665-5760 Attorneys for Plaintiff Travelodge Hotels, Inc. COURT OF COMMON PLEAS COUNTY OF CUMBERLAND COUNTY, PA TRAVELODGE HOTELS, INC., Plaintiff, VS. ALL AMERICAN PLAZAS, INC., a Pennsylvania corporation CIVIL CASE NO. Defendant. . CIVIL ACTION COMPLAINT FOR BREACH OF CONTRACT Plaintiff, Travelodge Hotels, Inc. ("THI"), alleges as follows: GENERAL ALLEGATIONS Plaintiff, THI, is a corporation organized and existing under the laws of the State of Delaware with its principal place of business in Parsippany, New Jersey. 2. Defendant All American Plazas, Inc. ("All American"), on information and belief, is a corporation organized and existing under the laws of the State of Pennsylvania. with its principal place of business at 1181 Harrisburg Pike, Carlisle, Pennsylvania. THI has the exclusive right to sublicense the use of various trade names and service marks (which are on the principal register of the United States Patent and Trademark Office), logos and derivations thereof (the "Thriftlodge Marks"), as well as the distinctive Thriftlodge® System, which provides hotel services to the public under the Thriftlodge name and-certain services to -its licensees, including a centralized reservation system, advertising, publicity and training services. THI or its predecessors have continuously used each of the Thriftlodge Marks since the date of their registration and those marks are in full force and effect. The Aereements Between The Parties 4. On or about March 29, 1995, Forte Hotels, Inc., a California corporation which is not a party to this action and which is the predecessor-in-interest to THI, entered into a license agreement (the "License Agreement") with All American for the operation of a 46-room guest lodging facility located at 1179 Harrisburg Pike, Route 11, Carlisle, Pennsylvania, Site No. 9712 (the "Facility"). A true copy of the License Agreement is attached hereto as Exhibit "A." THI is the successor-in-interest to the rights of Forte Hotels, Inc. under the License Agreement. 6. Pursuant to Paragraph No. 2(a) of the License Agreement, All American was obligated to operate a Thriftlodge guest lodging facility for a ten (10) year tern. -2- 7. Pursuant to Paragraph No. 6 of the License Agreement, All American was required to operate the Facility in compliance with THI's "System" and "System Standards" as defined in the License Agreement, including THI's quality assurance ("QA") requirements. 8. Pursuant to Paragraph No. 4 of the License Agreement, All American was required to submit to THI, at least five (5) days after the end of each calendar month, a statement showing the number of rooms rented and the Gross Room Revenue obtained with respect to the motor hotel during such month. Pursuant to Paragraph No. 3(c) of the License Agreement, Gross Room Revenue includes all receipts derived from the renting, use, or occupancy of guest rooms and meeting rooms in the motor hotel, excluding sales tax or other taxes which may be required by law to be collected from guests. 10. Pursuant to Paragraph No. 3 and Rider "A" of the License Agreement, All American was required at least five (5) days after the end of each calendar month, to make monthly payments to THI, based on a certain percentage of Gross Room Revenue, for royalties and for a marketing fund used to promote motels and motor hotels operating under THI's various trade names and service marks (collectively, "Monthly Payments"). 11. Pursuant to Paragraph No. 2(b) of the License Agreement, TM was entitled to terminate the License Agreement, if All American, violated an obligation under the License Agreement, and that violation continued thirty (30) days after THI provided All American with written notice thereof. -3- 12. Pursuant to Paragraph No. 2(b) of the License Agreement, All American agreed that, in the event of a termination of the License Agreement, All American would pay liquidated damages to THI in accordance with a formula specified in the License Agreement. 13. Paragraph No. 2(b)(iii) of the License Agreement defines liquidated damages in the event of termination as two (2) times the payments due from All American during the last twelve (12) months that All American was a part of the Thriftlodge System, whether or not paid by All American, or Forty-Five Thousand Dollars ($45,000), whichever was greater. 14. Pursuant to Paragraph No. 20 of the License Agreement, in an action brought under the terms of the License Agreement, THI and All American agreed that the Court shall determine the prevailing party's reasonable attomeys' fees and award it to the prevailing party. Defendant's Defaults and Termination 15. Beginning in 1997, All American repeatedly failed to operate the Facility in accordance with THI's System Standards, in breach of its obligations under the License Agreement. 16. On March 27, 1997, THI conducted a QA inspection of the Facility. By letter dated April 15, 1997, a true copy of which is attached hereto as Exhibit "B," THI advised All American that (a) the Facility received a failing score in the QA inspection and, as a result, All American was in default of its obligations under the License Agreement, (b) pursuant to the -4- License Agreement, it had thirty (30) days within which to cure the QA default, and (c) if the default was not cured and another failing score was achieved, the License Agreement might be subject to termination. 17. THI alleges, on information and belief, that All American did not timely cure the QA default. By letters dated August 13, 1997, January 30, 1998, and June 26, 1998, true and correct copies of which are attached hereto and incorporated herein as Exhibits "C," "D," and "E" respectively, THI advised All American that the Facility received failing QA scores in its second, third and fourth consecutive QA inspections. 18. By letter dated July 20, 1998, a true copy of which is attached as Exhibit "F," TIE terminated the License Agreement because of All American's failure to cure the QA defaults. THI advised All American that it was required to pay THI at least Forty-Five Thousand Dollars ($45,000) in liquidated damages, as calculated, pursuant to Paragraph No. 2(b) of the License Agreement. FIRST CAUSE OF ACTION Breach of Contract -- Liquidated Damages Against All American 19. THI repeats and makes a part hereof each and every allegation contained in Paragraphs 1 through 24 of this Complaint. 20. On July 20, 1998, THI terminated the License Agreement. -5- 21. Paragraph No. 2(b) of the License Agreement provides that, in the event of termination of the License Agreement by action of the Licensee, All American shall pay liquidated damages to THI on the effective date of termination. 22. As a result of the termination of the License Agreement, All American is obligated to pay THI liquidated damages in the amount of Forty-Five Thousand Dollars ($45,000) or two (2) times the amount of Monthly Payments due from All American during the last twelve (12) months, and that All American was a part of the Travelodge System, in liquidated damages, whichever is greater as calculated pursuant to Paragraph No. 2(b) of the License Agreement. 23. Notwithstanding THI's demand for payment, All American has failed to pay TM the liquidated damages as required in Paragraph No. 2(b) of the License Agreement. 24. THI has been damaged by All American's failure to pay liquidated damages. 25. TM is entitled to its attorneys' fees for having to proceed with this action to collect monies owed under the License Agreement, pursuant to Paragraph No. 20 of the License Agreement. -6- WHEREFORE, THI demands judgment in its favor for and against All American in the amount of all liquidated damages due and owing under the License Agreement, less any credit due, attorneys' fees, and pre judgment and post judgment interest as the law allows. L'llUV-- Arthur L. Pressman Constantine T. Fournaris Buchanan Ingersoll Professional Corporation Eleven Penn Center 1835 Market Street, 14th Floor Philadelphia, PA 19103 Tele. No. (215) 665-3910 Fax No. (215) 665-8760 Dated: June 14, 1999 -7- VERIFICATION STATE OF NEW JERSEY ss: COUNTY OF MORRIS C. Wayne Miller, of full age, being duly swom according to law, upon his oath, deposes and says: I am Vice President, Franchise Administration, of Travelodge Hotels, Inc., which is Plaintiff in this action. I have read the foregoing Complaint and all of the allegations contained therein. Except as to allegations alleged upon information and belief, which allegations I believe to be true, all the allegations in the Complaint are true based on my personal knowledge, the records of Travelodge Hotels, Inc. or information availabl hrough employees of Travelodge Hotels, Inc. l!? C. WAYNE MILLER SXVORN TO BEFORE ME this, L day of J, I99y NOTARY PUBLIC SUE ANN B. GROSSMAN NOTARY PUBLIC OF NEW JERSEY My Commission Expires Jan. 21, 2002 -9- Exhibit A •or-Te a TAATennn Property LICENSE AGREEMENT 1971 FRIENDSHIP DRIVE, FORTE HOTELS INC, , CALIFORNIA 97020 TH 3 AGREEMENT entered into of at E1 Cajon, California, this 19 9-5-, by and between FORTE HOTELS, INC., a day Californ a corporation, hereinafter referred to as "LICENSOR," and ALi, eves..... ....?. hereinafter referred to a° "LICENSEE," who is the owner, lessee, and/or operator of the specific promises described as follows: WITNESSETH: end has prrovided, asnetworkdeveloped of e motor hotels implemented and e related plan for services pofvhighg, quality and of distinguishing characteristics (hereinafter referred to an the "System"), including (but not limited to) the following: (1) The right to use the- registered service marks and trademarks, " states Patent THRIFTLODGE", which hoe been registered or applied for in the United ce and countries, use0Of;which is nsothe lelyappropriate exclusively granted trademark offices in other y granted by LICENSOR; wor servic or in(a)ssociat ondwith thee comark or trademark lor schemes, buildingldes gns,"inseither igniaelona n@, used an withgaenationwideeservicegof motor part of all the System, in association high quality, distinctive motor hotel eerviCal symbolizing standardized, and furnishingstand, appliances characteristics. any equipment other? distinguishing characteristics; (4) Methods of operation, referrals and reservation procedures and national advertising and publicity service; and (S) Standardized, uniform motor hotels services providing lodging, d other hotel services Hof na distinctivennature, inaaccordanceautomobiles, withfair and and ethical policies and practices and with the highest standards of efficiency, courtesy, hospitality and cleanliness; and WHEREAS, LICENSEE wishes to be a part of the System and to be licensed to provide motor hotel services of the same distinctive nature and high quality as has been established and to use the same trademarks, service marks, color patterns and schemes, signs, designs and other distinguishing characteristics of the System as have been established and are provided by LICENSOR. It is the intention of the parties that the motor hotel which 1s the subject of the license granted under this Agreement, together with motels and motor hotels now or hereafter operated by LICENSOR and/or joint Page 1 ventur*., of which LICENSOR and/or affiliates ¦re a party, and those operated or to be operated by other licensees, will form parts of the 1lcenseeeTh: directly :!dotted portion to this Agreement and of other the System. LICENSEE, fected by the business Conduct of all licensees in thin Agreement, including the paymenttooofiall r•es, sise s matter ot mutuel e of importance and consequence to LICENSEE, to licensees. LICENSOR and to all other THE TBRIFTLODOE System is comprised of the LICENSOR, ITS LICENSEES, ITS CUSTOMER9, ITS ERS. It in POTENTIAL CUSTOMERS AND ITS VENDORS AND SUPPLI the role of LICENSOR to administer the License Agreement and in so doing weigh the needs of the entire TNRIITLODGE system, in it and all of the licensees . LICENSOR has a paramount duty to protect the THRIPTL40DOE trademark for the ultimate benefit of the THRIFTLOOOE franchise system, NOW, THEREFORE, IT IS MUTUALLY COVENANTED AND AGREED AS FOLLOWS: 1. LICENSOR grants to LICENSEE, subject to the terms and conditions hereof, a nonexclusive license to use the System and the registered trademarks and service marks, "THRIFTL,0DGE" for and in connection with LICENSEE*S aforesaid motor hotel, the location of which is described above, Said motor hotel shall be operated under the name zM EZIQQ E ,except as otherwise required hereunder imr.Tare . 2, a. This Agreement and License shall bs in effect for a term c years. ommencing on the date hereof and continuing for a period of jam( (10) the compliance with allGxPfiratIOn Of this LICENSORI9 then current st tsandards end8has paid allin fees then due, LICENSOR and LICENSEE may enter into a new License Agre ement. Renewal is not automatic, and requires the express consent of parties. LICENSOR may charge LICENSEE the than current transfer fee in lieu of an initial payment. b. Notwithstanding the foregoing, this Agreement may be terminated during the term hereof if LICENSEE shalli i.) violate any covenant, condition or obligation herein contained, or contained in any other agreement between the parties hereto or their affiliated companies, and such violation continues after the expiration of thirty (70) days after written notice of default from LICENSOR stating the facts of such breach: or become Li.) make an assignment for the benefit of creditors or le a dj udicatodinsolvaebankrnt; in olvent, orefile d in .bankruptcy, or be any reorganisation, arrangement, composition, readjustment, ustment, liquidation, dissolution, under any present or future law or regulation or seek or acquiesce in the appointment of any trustee, receiver or liquidator for any Substantial part of the properties of LICENSEEt or if, within sixty (60) after daor anisat on carran assent oco any procasding against LICENS33 seeking any dissolution orssimilar relief unrlanon, reedjuateont, liquilatLan, regulation, such proceeding shall not havve been disatlmsedtlor if, within sixty (60) days after the appointment With Fil the consent or acquiescence of LICENSEE of any trustee, receiver or liquidator of any substantial part of the proportion of LICENSEE, much appointeent shell not have been vacatedi or III.) following substantial destruction by fire or other cause, not rebuild and open for business to public within a period not exceeding twelve (12) months, in accordance with the original plans or such other plans and specifications as shall be approved by LICENSOR in writing. mayisaAgreet its nti and LLiicense ten and notice rights land9EE, termi allvaccrued hamountsrdue onnthe effective late pay to d and all damages suffered by LICENSOR as a 'result of such termination. Both parties agree that if LICENSEE violates any covenant, condition or Page 2 wnw, /'yi?f'fi'. T• obligaL,on contained herein, LICENSOR shall be entitled to compensation for the detriment incurred, but that it is extremely difficult and impractical to ascertain the extent of the detriment.' To avoid thin , parties ogres to liquidated damages as follower problem, the LICENSEE shall pay he LICENSOR two tines the amount of the payments due from LICENSEE during the last twelve (12) months the LICENSEE was part of the THRIFTLODGE System pursuant to Paragraphs 3.b. and 3.c. below (whether or not paid by LICENSEE) or Forty-Five Thousand Dollars ($45,000), whichever is greater. If the LICENSEE has not been a part of the TRRIFTLODGE System for at lest twelve (12) months, the parties agree that liquidated damages shall be the average of monthly payments due from LICENSEE pursuant to paragraphs 3b. end 3c. below (whether or not paid by LICENSEE) times twenty four (24), or Forty Five Thousand Dollars (g45,000), whichever is greater. 3. In consideration of the extremely valuable rights granted to LICENSEE hereunder, LICENSEE shall make payments to LICENSOR as follows: a. An initial license fee (hereinafter the "initial license lee") of ilars (815,000), which has been fully earned, and is, therefore non-refundable, plus any applicable taxes. b. In addition, LICENSEE shall, within five (5) days after the end of each calendar month during the term of this Agreement, commencing with the calendar month in which operations begin at the motor hotel, pay to LICENSOR an amount equal to four percent (4_) of the Gross Room Revenue. This royalty fee is in consideration of LICENSEES use of LICENSORS trademarks and service marks, and is fully earned each day such trademarks and service marks are used by LICENSEE, and is not subject to any counterclaims franchise or setoffs of any nature. If c=mnv additional tee of an 000. Tra° e, RIDER "A" ATTACKED. INITIALSt .? n C. LICENSEE egress that a ` v (as that tars is defined herein) of the motorehotel shall bee Room Revenue paid to the Licensor Marketing Fund for national advertising each of motels and motor hotels operating under Licanscres Trademarks andoaotion Service Marks. The Percentage of Oros Rooa Revenue to be paid hereunder, currently lour percent (0), Shall be sat by the Board of Directors of commencing one first and ths month following the month in which effective the Board of Directors so set the said percentage. LICENSEE, may receive bills from LICENSOR for its proportionate share of the cost of the referral ral reservation and directory service, for travel agents' or airline commissions for LICENSEEIS property, and for other services provided to the LICENSEE and LICENSEE shall time?t. pa ,uch.bills. RICER "A" ATTACKED. INITIALS! _ d. All past due ecco incurred pursuant to this section shall one the unpaidtbalanceapernmoonth,aoor the one r hate of interest( permit) of law in the jurisdiction where the motor hotel is located, whichevertind by lower, and LICENSEE authorises LICENSOR to deduct any sums LICENSEE is in arrears to LICENSOR from any muss payable by LICENSOR to LICENSEEt e, it is anticipated that the LICENSOR May enter into certain contractual obligations on behalf of LICENSEE including, but not limited to, agreements in connection with the sites for, erection or maintenance of one or more billboard type advertising signs. LICENSOR may expand funds at its discretion to beat support the TRRIFTLODGE system. To induce LICENSOR to enter into such contractual arrangements, LICENSEE doesi hereby agree to pay all costs and expenses, and to hold the.LICENSOR harmless from all costs and liability, incurred in connection' therewith. LICENSOR will only enter into such property specific agqrresmehts with LICENSEES approval. LICENSOR does not guarantee any minimum nbmber of quests from the referral reservation and directory service. f. The term "Gros, Room Revenue" as used herein shell include all ipts,derived from the renting, use or occupancy of quest rooms and meeting roo in the motor which may be required cares taxes or. other taxes by few to be collected from quests. Page 3 r. ;fir - - - -..? ? CU •. a. On, or before five (S) days after the and of each calendar month, LICENSEE shall submit to LICENSOR a statement on special forms provided to LICENSEE by LICENSOR showing the number of rooms rented and the Gross Room Revenue obtained with respect to the motor hotel during such month, and each such statement shall be certified by LICENSEE to be true and accurate and shell be accompanied by the payments set forth in Paragraphs 7.b. and 1.C. above; b. LICENSEE shall keep on the premises of the motor hotel true and accurate oohs, records for e period of at leest and accounts relating to Gross ROOM Revenues two (2) years, and LICENSOR, its agents or representatives, shell be allowed to examine and audit and make copies of entries in said books, records and accounts et all reasonable times. If LICENSOR, or its agents or representatives QlsOOVer a discrepancy in ter L LICENSEE ICENSEE shalltreimburseOLILTUBOR foraall costs fine rrpercent In (Sr), then the audit, including travel, meals, and lodging for then uditor,rtorminq such following the cLICENSER shall provide LICENSOR, within sixty (60) days including an unaudited Balance Sheet and Profit andtLo s SSttaatement, for such fiscal year, copies of occupancy tax forms submitted to governmental agencies and at other times such reports as LICENSOR may require on forms to be prescribed by LICENSOR, all to be true and correct and prepared in conformity with generally accepted accounting principles on a basis consistent with that of the prior year. LICENSEES with motor hotels of 100 rooms or more suet also provide LICENSOR with a revenue audit prepared by an independent certified public accountant for each fiscal year. Such audit will be provided to LICENSOR within sixty (60) days of the close of LICENSEE'S fiscal year. 6• a. LICENSEE acknowledges LICENSOR's exclusive right and title to use and to license others to use the registered service mark and trademark. LICENSEE agrees not to use or imitate the said System or service mark and trademark except under written license from LICENSOR? b. The License heroin o "THRI," other service mark and trademark subsniquuentlyuadoppted ??ICE• O and any nonexclusive and is applicable only to the specific motor Lhotel described hersint c. Exclusive title and rights to use and to license others to use any other service marks and trademarks subsequently adopted by LICENSOR for the System or any part thereof or addition thereto shall be the exclusive property or LICENSOR? her si qn design of ^T1RtIAFT oocgomeywhichtadvertiu LICENSEEQStmotoorr hotel shallnd firstlbe approved by LICENSOR in writing in all respects'including size, copy, color and materials, which approval Shall, not be unreasonably withheldt l uses LICENSEE, an "R"ninla circlefshthe reistered all be affixedaadjacennttlto such•mark: • in Canada the following legend included at least once in connection withand such uset "Marks used under license", , f. LICENSEE shall not use the name "THRIrrLODGE•" as a part of its partnership, joint venture, corporate or other business names and 9. Upon any termination of this-Agreement this instrument forthwith constitutes an assignment to LICENSOR of all- Of.!LICENSEE1S rights in and to said service mark and trademark, "TH IrTLODGE•":together with the ood will ea d motor hotels are concerned, and 1LI?8EEelwilliimmediatelyldiscontinue all use of said registered service mark tand`trademark and-,shall immediately obliterate the word "THRIrrLODGR0," from LICENSEEOS signa'and from any and all places and materials whatsoever. If LICENSEE shall fail to obliterate any such words within fifteen (13)•days after written demand, then LICENSOR by its duly authorized agents may enter upon the premises of LICENSEE to Page 1 nn... v accomp..eh said results without being guilty of trespass or any other tort, end may make or caue• to be made such changes at the expense of LICENSEE, which LICENSEE agrees to pay on demand.. LICENSOR and LICENSEE further agree that it would be impractical or extremely difficult-to fix the actual damage sustained by LICENSOR for LICENSEEtS use of the service mark and trademark wTHRIFTLODOEe" and LICENSEE agrees therefore to pay to LICENSOR % liquidated damages Five Hundred Dollars ($500) a day for each day's u great and nauthorised use thereof. LICENSEE also agrees that LICENSOR will suffer after the termination irreparable ijury the service mark xand, trademark "THRIFTLODOEe" and that injunctive relief will be the only fair, adequate and complete remedy available to LICENSOR. Accordingly, LICENSEE hereby consents to the entry of an injunction in favor of LICENSOR, permanently enjoining further use of said service mark and trademark subsequent to any such termination of this Agreement. 6. LICENSEE agrees SEE RIDER 00" ATTACHED. INITIALS; -? a. To maintain a high moral standard and atmosphere at LICENSEE'S THRIFTLODOE; b. To comply with all local, State and Federal laws, ordinances, rules and regulations pertaining thereto; to maintain its premises and accommodations in s clean, safe and orderly manners C? To provide efficient, courteous and high quality THRIFTLODOE System service to the publio; d. To furnish motor hotel same quality, type and distinguishing c and maintained by LICENSOR in the Syste operated by LICENSEE under this Agreame good will among the public for THRIFTU as a whole and so that TRRIFTLODOE LICE Bald System shall be benofitted, and th courteous, high quality service on a at and all marketing manuals as are curren hereafter be implemented for use in the cos and conveniences of the 3teristics as are established the and that the motor hotel all help to create and build System motels and motor hotels ?lie?rured and each uniform, mefficient, diced basis; to comply with any sod in the system, or which may am by LICENSOR! e. To conduct its motor hotel business and advertise the same by use of such symbols as may be established from time to time by LICENSOR and none other; to diligently promote and make every reasonable effort to steadily increase said business by selling and providing accommodations and related services at its motor hotel to all persons who inquire for them and by printed advertisements and highway signs a reasonable distance from the location of the motor hotel; f. To refrain from using any items of merchandise, equipment, stationery, supplies, furnishings or utensils bearing the service mark or trademark, "TNRIFTLODOEew in connection with the operation of the motor hotel unless the same shall have boon first submitted to and approved in writing by LICENSOR, which approval shall not be'unreasonably withheld; accordance To se and andtregquuiremmeentsbeetablishedryGOriae in by LICENSORJ h. To repair and point (color scheme to be approved by LICENSOR) the exterior and interior of the motor hotel buildings and ures at timestto reasonable times or upon e of the buildinnyq,structuresaand surrounding promises in a clean, orderly and sanitary condition satisfactory to LICENSOR; accommodation 1. To permit inspection at all reasonable times of representatives n to related assure fulli compliance facilities with n this Agreaeentt LICENSOR Page 6 wnn. L ? service and To comply with the standards of hosting, management, food Department opreIaration,sand t housekeeping established by the Operations operations manual published by LICEMBOR'(as Procedures Metforth in the receipt of a Copy of which is acknowledged. rNoivariatioonttromtheeeme), standards and procedures is permitted without the prior written consent of LICENSOR. The THRIPTL40DGE operations manual shall remain the mole property of LICENSOR and shall be returned to LICENSOR in the event of the termination of this Agreement; e prational policy decisions determined by the rapreek. To bide bcfththe System and he co-owners and licensees of the System. However, inethetevent cof iany of the conflict between said operational Policy decisions and provisions of the THRIFTLODOE operations manual, the latter shall control. LICENSEE shall cooperate with LICENSOR, the Licensor Marketing Fund and the owners and managers of other THRIFTLODOEe motels and motor hotels with regard to common problems and policiest turniehing1. fixtures To obtain supplies, the approval of LICENSOR for all furniture, to use in its motor hotels to purchase or leave equipment torpfromses anyone designated by LICENSOR, all furniture, furnishings, fixtures, s hotel. not be obliated upplies, uLICENSEEtensilshalls equipment which ittoproposes to use in its motor items from LICENSOR or its designee if LICENSEEhdesireor of slto • any se said lease the same from third Persons provided, however, said items hmust be at least aqqual in quality and strength to those specified by LICENSOR for the System in its specifications in respect Lhsreoft M. To give consideration to rental rates to be charged for motor hotel rooms to be rented to the public that LICENSOR, on the basis of its experience in respect to relevant factors including services offered, location and area, may from time to time recommend to the and that the public and the System will best be served and protected, particularly against excessive charges; cause the responsible forTthe managementrand operation will e hotel tbusiness contemplated by this Agreement to attend the LICENSOR training program to become familiar with the System. The coat for attending the orientation school shall be borne by LICENEEEt 0• To participate in all LICENSOR network promotions and discounts, seniorg, but not limited to, VNA, FIT, group coupons, industry citizens, airline discounts, travel agent discounts, family plane, Frequentchildren'Traveles-free progress, Business Break progress and p• To comply with LICENSOR standards for guest suppUse; 4• To participate in LICENSOR's international referral system for guests?* groups. and muting planners; r. To comply with LICENSOR standards for reservation services and equipment including, but not limited to, airline surcharges and general sales agents fees. a• To attend the annual. TMRIF WDOEe Conference, area meetings and special LICENSOR meetings! - com including,tbut of limitedito,atravelveyle tacommiirricm and procedures policies, travel agent and group promot ons and trade showmmp tour Pportt U. To participate in LICENSOR progress that recognize individuals or companies responsible for booking quests into THRIFTLODOEet and Page 6 ...arts ••,r .- C ? V. To Comply With LICENSOR employee standards for uniform appearance, and treatment of quests. LICENSOR shall have no authorit to hire, fire, or control LICENSEE'S employees, y 7. LICENSOR expressly reserves the right to reasonably revise, amend end change from time to time the System or any part thereof. Such System, ea to changed, revised or amended, shall for all purposes be deemed to be the System referred to in this Agreement. Any and all improvements in the System developed by LICENSOR or by LICENSEE shall be and become the sole and absolute property of LICENSOR end become part of the LICENSOR business knowledge, and LICENSEE shall have no right to use such improvements or business knowledge except in accordance with this Agreement. Information and data disclosed by LICENSEE in respect to its motor hotel operations and business shall not be confidential. a. During the term of this Agreement, LICENSEE will not discontinue the operation of the motor hotel under the service mark and trademark "THRIFTLODOEs," nor sell, transfer, assign, lease or sublet, nor offer to sell, transfer, assign, lease or sublet any interest in the names the coo?ndducct dOin connection thhotel erewith,aor inrthe buildin ¦ S? the business furnishings used in connection therewith, or any interestginpLICENSEE without the prior written consent of LICENSOR, which consent shall not be unreasonably withheld. In approving of the proposed transferee, LICENSOR shall take into consideration, among other factors, the financial condition of the proposed transferee, the proposed transferee's previous business xperience, and the general integrity and reputation of the proposed e transf e. If LICENSEE, at any time during the term hereof, shall r subleas the motor hotel, eceive a bona fide offer acceptable to LICENSEE to purchase, lease or writingp setting forth the Lfulleterns of ep chpoffer,a orm LICENSOR in and LICENSOR may, within thirty (00) days alter receipt of such written notice, at its option, elect, by giving written notice to LICENSEE, to purchase, lease or sublease the motor hotel on the same terms and conditions contained in said offer. Until the end of said thirty (70) day option period, LICENSEE shall not accept any third-party bona fide offer; to in Subparagraph Sta. above, LICENSOR has ailed to 0elect to exerciserred said option, LICENSEE may transfer, sell, lease,or sublease the motor hotel on tens no more favorable than those submitted to LICENSOR in writing, subject to LICENSOR's approval of the prospective purchaser or lessee, as hereinafter provided. LICENSOR shall have sixty (60) days from and after the expiration of the aforementioned thirty (30) day period to approve or disapprove of the prospective successor in writing. In the event the prospective successor in not acceptable, LICENSOR shall notify the LICENSEE of this fact in writing. In such event, LICENSEE shall not be permitted to transfer its interest in this Agreement and in the License granted hereby to any other party without first obtainin LICENSORS approval. .In the atotrimmediatelyansfer a1, LICENSOR shall have C. In the t the rosp succ LICENSOR, such acceptancenshall be coedcti ueseor is acceptable to prospective successor agrees to enter into the then cuurrenttstandard form of License Agreement being offered by LICENSOR to prospective licensees with the royalty provision stated in such form of agreement, but the requirement of initial franchise fee or its equivalent shall be waived by LICENSOR. d. Upon any the successor or successors ntoeLICENSEE, an aacointerest in the motor ndition of;their rightoe 1, the continued enjoyment of the benefits Of this Agreement, end to reimburse LICENSOR for its expenses in respect to reviewing the qualifications of the prospective transferee, will be required at T;@Ir=DOE LICENSOR'$ option, to pay to LICENSOR a nonrefundable license transfer fee of Ten Thousand Dollars ($10,000). page 7 eu.". G o 9. LICENSOR shall have the privilege, if LICENSEE deaarea to sell, lease, sublease or otherwise transfer its rights to the motor hotel described in this Agreement, to participate with real estate brokers in the listing of the said property and in maid tranoaction and to receive usual reeaonable brokerage commissions, fees and costs relating thereto, if LICENSOR procures a buyer or less. 10. LICENSEE warrants that its execution of this AGREEMENT and use of the marks "MIDTLODGE"" as provided herein, are not a breach of any person, firm orcovenant other on, firm or company. that LICENSEEIS execution of If this Agreement or use of the marks, "TNRIlTLOOGEs" is a breach of any such agreement or covenant than LICENSEE will, at its cost and expense, defend such against claim and pay, indemnify and save LICENSOR harmless from all liability and damages including costs and attorney#s tees which LICENSOR may incur or sustain in defending against any such claims asserted by such other person, firm or company. 11. If sublease or otherNwrittentcontract from therOwne promisee under a lease, prior to the execution thereof, obtain LICENSORIS written,a Iroval ehsuc, lease, sublease or other contract, and such instrument shall contain theh express covenant that throughout its term the premises shall be used Solely and exclusively as and for a motor hotel under all of the terms and conditions of this Agreement, and that no assignment, transfer, change, modification or other amendment of such instrument shall be entered into between the owner and LICENSEE without the express consent in writing of provision,whowever,?Bshallnbelsubnot jecctt to the right of LICENSOR This scancel this Agreement, as set forth in subparagraph S.b. of this Agreement, If LICENSEE occupies said premises under a lease, sublease or other'contract with the owner as aforesaid, it is agreed that LICENSEE will cause an "Owner's Consent" to the foregoing, in a form prescribed by LICENSOR,'to be executed and acknowledged by the owner of said premises within fifteen (15) days after the day hereof, and if such Ownerfs Consent shall not be obtains LICENSOR shall have the option to terminate this Agreement, 12. LICENSOR agrees: e. To make available consultation with LICENSGR•S officials and staff on matters relating hereto; b. To make LICENSOR may have with available, :poi LICENSEE'S request, information that respect to supplies, includln qu pment, furniture, furnish-inge and LICENSEE'S motor hotelicas thereof, necessary or convenient to operating C. To assist LICENSEE in installing methods of motor hotel operations found by LICENSOR to be Bound and effective, and to provide the management and operation LICENSOR methods to personnel responsible for parsons), selected of the motor hotel (not to exceed three place an LICENSOR may designate, and Such LIorientation CENSER shall nbelrespo sibledfor then trains wages, board, room and transportation expenses during the orlantetion period: d. To travelin motor hot is operatingencourage sefrom LICCENSORborooperatede motels and ventures in which LICENSOR or its affiliates are a party; by joint a. To furnish to LICENSEE lease terms or prices on signs, ce Si coma whichnare then,beinglm denavailable to otherelicensee* of LICENSOR.a kind reed that lease hase the fo from LICENSOR:Chowwever LICENSOR shallrhaveothe right of priorrapprov items egoing any such items to be leased or purchased by LICENSEE, which a roval l of not be unreasonably withheld: and PPoval shell page a nnn. f. To make available to LICENSEE, at LICENSEE'S request and at a price to be agreed upon, any or all of the following: (S). Formulation and implementation of an accounting control systeal (SS). Complete motor hotel accounting service, including preparation or balance shoots, profit and loss statements, depreciation and other schedules and income tax datal and (iii). Advertising and promotional programs for use at local level. 17. No additional construction or substantial alteration shall be made with respect to the motor hotel, unless working drawings and specifications and color schemes are first approved in writing by LICENSOR, which approval shall not be unreasonably withheld. Upon completion of an addition, LICENSEE agrees to pay to LICENSOR Three Hundred Dollars ($300) per room for each additional rental room added. 14. During the term of this Agreement, LICENSEE shall procure, carry and pay for windstorm, fire and extended coverage insurance. The proceeds of any such insurance, in the event of damage or destruction, shall be used to repair or restore the buildings as nearly as possible to their original condition and value. 15. LICENSEE agrees to indemnify and hold harmless LICENSOR, its officers, agents and employees from loss, Cost, damage, expense and liability, including attorneyts fees and court costs, by reason of damage or loss, including personal injury, of whatsoever nature or kind', arising in connection with the business of the motor hotel or out o!, or as p result of, any negligent or intentional act or failure to act on the part of LICENSEE, Its agents, employees, tenants or sub-tenants. LICENSEE agrees to place with an insurance company rated A- or higher by Beet's Key Rating Guide and reasonably approved by LICENSOR and keep in effect during this Agreement, insurance for the benefit of LICENSOR (as well as for LICENSEE) covering public liability, on a broad form basis with limits not less then Five Million Dollars ($5,000,000) combined single limits for bodily injury and property damage and include personal injury, products, liquor legal liability and non-owned automobile coverage. LICENSOR is to be named as an additional insured and in case of modification or cancellation of the contract, LICENSOR is to be given 30 days notice. Insurance provisions are to be approved by LICENSOR. In addition, LICENSEE agrees to provide proper Worker's Compensation insurance covering all of its employees. LICENSEE further agrees to deliver to LICENSOR the certificates naming THRIPTL40DGR LICENSOR as an additional insured and to promptly pay all premiums on said policies as and when the same become due. 16. This Agreement contains the entire agreement of the parties, and no representation, inducement, promise or agreement, oral or otherwise, not embodied herein, shall be of any force or effect. No failure of LICENSOR to exercise any power hereunder, or to insist upon strict compliance by LICENSEE and any obligation hereunder, and no custom or practice at variance with the terms hereof shall constitute a waiver of LICENSORIS right to demand exact compliance with the terms hereof. Waiver by LICENSOR of any default by LICENSEE shall not affect or impair LICENSORIS rights in respect to any subsequent default of the sue or a different kind, or any delay or omission of LICENSOR to exercise any right arising from any default shell affect or impair LICENSOR', rights to the same or any future default. Neither this Agreement nor any provision hereof may be changed, waived discharged or terminated orally, but only by an instrument in writing. 17. LICENSEE is an independent Contractor, and LICENSOR and LICENSEE are not and shall not be considered as joint venturers, partners, employees or agents of each other, and neither shall have the power to bind or obligate the other, except as set forth in this Agreement. LICENSEE shall hold itself out to the public, and all those with whom it does business, as Page 9 nnw. ?- O bslnq ands pendently owns: end operated, and to prominently display notice of its Independent status on all printed material sssoolated with the eubject pproperty, LICENSOR and LICENSEE have enters: into this agreement for the ursuit of that it has profit and professional fulfillment. Each represents el uon subetentisl experience in its prospective business and will not business. the expertise of the other in the operation of its respective 19. LICENSEE hereby acknowledges that the License grsnted by thi• Agreement 1• nonexolueive en: that LICENSOR say own or operate, alone or in conjunction with others through s joint venture or othetrotse, motels or motor hatslsi end further msy lioenppseee others, on the same or dlftsreni orrmotor Aoteletwithiorthseneertvioinitte 17DtIlTLODOEe end/or other motels Y o! the subject motor hotel. debtsllncurred w?Rt}?s=rode[ttoetheasotorohotalgndo6uoinooo oryrelatedy d rom such sLICENSEE agrees toClndsunlffyy and hold agrees in writing to pa such from su debts, including reasonable attorney iel .°DG ao?nSOR harmless t In any suit or action brought under thertys terhmsall of be this fixed by the e reason onable attorney,¦ fee of the prevailing pa Agreement, court Party indSuchleuit taxed as Part of the costs in fever of the prevailing on. 21. Any action to enforce this Agreement shall be filed in and shall be governed by and construed in accordance with the law of the state of California. The parties waive and will waive all right to ury trial of any dispute either arising from the LICENSOR/LICENSEE relationship, or with respect to this Agreement. County, CaThheoplac of performance fort is contract shall be In San Diego 1 of this Agreement . LICENSEE and submit the StatementspreequuiredrbyuParegrbaph 4 ofaPh this Agreement to LICENSOR at its principal place of bus ness in E1 Cajon, California. number2. Allnterms and words u are in thi :Agreement, regardless of the m inclde asculine,?yfeminineuoreneuter, 09 the pluralhall, sany ense other thye^Agre menttor any paragraph or Clause herein may require, as if such words had been fully and properly written in the appropriate number and gander. 22, This Agreement may be executed in any number of counterparts, each of which when so executed end delivered shall be deemed an original, but such counterparts together shall constitute but one and the seas instrument. 24. held anynpart of or any lesion, be Asolared or an If this remaining portion, which remaining portion shall hremain inyforcenand effect Agre ellminatedi andeitnishher byndeclared the intteentionaofd the parties hereto that they would have executed the remaining portion of this Agreement herein anywithreasoout be hereafter declasuch red invalid !'ts or portion which may, for other 25. All notices partaininq to thls.Agreement by one party to the shall be sent LICENSOR, addressed b y registered or Certified malls If to-THRXFTL4DDQg to it at 1973 FriO 92020, and if to LICENSEE addressed to-it„xt Drive, 81 Cajon, California r!imr,.a..? AA 1701 parties shsil des! nets or at such other address ae either of the Service of any notice mods writtenlnotice to the other from time to ties. or reliable in the manner herein provided shall be Conclusively deemeedacomplette on the day of actual delivery as shown by the addresses's registry or certification receipt, or at the expiration of the second day alter the _ Page 10 inn, - O date of sailing, whichever is earlier in time. 26. All rights under this Agreement shall inure to the benefit of the successors and assigns of LICENSOR. This Agreement is not intended to otheriperson or entity shall ebelentitled tto the named parties any rights hereunder hereto by and of so-called 'third party beneficiary rights' or otherwise. 27. In the event LICENSEE or any successor of LICENSEE herein is a corporation, partnership, joint venture or other entity other than named individuals doing business under their own names, it agrees as follows: . at the of Agreement,aor if oafs ccessor,asOa conditionmof obtaining LICENSORS approval of such transfer, a stockholder' agreement executed by all of its stockholders stating that no such stockholder will sell, assign or.transfer any of his stock to any person or company other than his immediate family or persons who also are stockholders, without the written consent of LICENSOR, which consent will not be unreasonably withheldr b. no unissued stock will be to anrson company other thentits stockholders without theswritten consent of or LICENSOR, which consent will not be unreasonably withheld, and that it will furnish LICENSOR, at the time of execution of this Agreement, or, if a successor, as a condition of obtaining LICENSOR's approval of such transfer, a resolution of its Board of Directors which has been ratified by the stockholders to such effect: C. To furnish to LICENS Agreement, the name of a designated LICENSEE in connection with all ant designated individual will be canal to act for LICENSEE in all matters, responsible for any action taken by provided, however, that the designs to tine by notice in writing to LIC the previously designated individua. by the individual named in such not. notice by LICENSORt and t, at the time of execution of this ,ndividual to act as representative of O Pertaining to this Agreement, which iveLY Presumed to have full authority nd in no event shall LICENSOR bi uch individual on behalf of'LICENSEEt d individual say be changed from time SOR and, in the event of such notice, shall be deemed to have been replaced e as of the date of receipt of such That i the Subparegrsphs a.,b.orc. above, o or in Violation the event Of stothe ck pis sold,1eassigned, transferred or issued in violation of said stockholder's agreement or resolution, LICENSOR shall have the option and right, after giving LICENSEE thirty (20) days written notice in which to cure said violations, to forthwith cancel and terminate this Agreement, and thereupon the rights and obligations hereunder shall cease, but such termination shall not affect the obligations hereunder of LICENSEE to take action or abstain from taking action after the termination hereof as provided elsewhere in this Agreement, nor shall it affect the responsibility of LICENSEE for damages or suss due as provided in Paragraph 2.a. above. 28. LICENSOR nay accept any check or Payment in any amount without prejudice to LICENSOR's right to recover the balance of the amount due or chackrsue any other right or remedy. No endorsement or statement on any elsewhere Payment coor in any nstitute orletter be construaccompanying annaccordchock orrsatyy isfaction. 29. The expiration or termination of this Agreement shall be without prejudice to any rights of LICENSOR against LICENSEE and such expiration or L than ICENSOR existing relieve of expiration or termination iaoroterminate expirationgoritermlmtionn ofEthis cAgreeement. LICENSEE survive the is obligated to return, at no expense to the LICENSOR, any and all copies of the operations manual, other manuals and any other communications media and material provided for LICENSEE'S use without additional charge in connection with the operation of the Franchised business. Page 11 w,.e in Consideration of the foregoing License R tc enter in said Agreement with LICENSI tter referred to as ^OUARANTOR,^ hel ran!awr# LICENSOR that LICINSaa will Pert IN WITNESS WHEREOF, the undersigned have ¦et their hands and seals as of the day and year first above written. FORTE HOTELS, INC. Al AMM PLAZAS a California corporation' HC by - BLIDI a. NITTiTIPpf? PRES IT , by " E L CENSOR" _ "LZCEN9EE^ induce of said Agrees Covenant, cond LICENSEE under (b) the f that LICE LICENSEE. and all e of hereby waives to require LM of the asrcuring the term if, each and every to be Performed by 93PP%'urther agrees that this quaran RM, renewals, amendments or other sodl! guarantee shall inure to the benefit of executors, administrators, successors and /?140 0 ince and, Ind agrees Idently of .tend to any of said am a. aITSTIFaat ^OUARANTOR" Page 13 L o mmz 2PAvnmz POM "A" ONUY0tUM 2.b i i.e)t 0 The CWX"ctitq tams Ord Omftti=m Ofy POrm9nqtn b wd 7o nohdtfftwld rq, th@ mmvttay loantrllibuti oLm lc! team ?d ?Pttft , thl , Inc. (PM) and the emMly tdrldtiM flab (Mtt@tiM) Shell be = Ftm the lint wrd be tt?S lust amivsrsarY ffi 2 ambdimL PYan the SSend amlvvwmoiy to ttr tasawd wtyt ami ausry 33% 3% -5t 3.50 sect comidacation is amly givm with the =4 tVtWdnq that yicamM will Std R •to "Vim as tasS?d; slaadsnlS Std appwft ell SPwilicmtiori !or such Exhibit B t1 DMOM April 15, 1997 l Mr. Glen Mitstifer Thriftlodge 1179 Harrisburg Pike (Rte. 11) Carlisle, PA 17013 q-v- q7tcR - ,R3 a5-Q/ Re: NOTICE TO CURE - Default under License Agreement (-License Agreement") dated Match 29,1995 for the Operation of 3iaveiodEeBys['gg/Tl` -Unit-) Dear Mr. Mitstifer. This letter is notice from Travelodge Hotels, Inc. ("Travelodge-) that All American Plms. Inc. (-Licensee-) is in defauh of its obligation to operate and maintain the Unit in scomdatim with applicable Systeta Standards under the License Agmement. The Unit received a quality assurance inspection score of 209-P. and a failure in the housekeeping portion of the impecdon due to the loss of 50 poims, at its inspection on March 27, 1997. This demonmates failure to comply with applicable Standards. A copy of the quality assurance inspection report is mlosed. Please review this report carefitlly bees- it identifies the operations, rmirttrnmoe and capital rooms (brrnrntt'e, fnttures, appinesit and Physical plant) that require immediate correction, improvement, repair or tephteemeut to restore compliance with Standards. Pursuant to the terms of the Lieenee Agreement, Licensee has thirty (30) days from the dose of this notice to cure the quality assurance default to Travelodge°s sadsfudom The Unit will be reinspected shortly alter the expiration of the thirty (30) day sue period. If another failing score is achieved, the Unit may be immediately removed from the Ttavelodge Reseftdon System and Travelodge may then terminatethe License to operate the Unit under the Travelodge system without further written notice. If Licensee reasonably believes that the default cannot be cured within the thirty (30) day cue period. Licensee may execute the enclosed Quality Assurance Improvement Agreement ("h» provement Agmemem"), which if accepted by Travelodge will give Licensee additional time to cure the default (up to 120 days from the date of this letter) in retum for achieving a minimum score of 425 rather than 370. Licensee must act diligently to cure the default. If Licensee chooses to eater into this Improvement Agreement it must execute the enclosed document and atrdch, as Exhibit "A", a detailed plan (the "Plan") of the repairs and renovations to be dote and the dates by which they are to be completed. The executed Improvement 6 SM+n Way ftSR1Nrly. NJ 07054 = 426.9700 Fa (201) 3595345 Mr. Glen Mitsdfer April 15, 1997 Page TWO Agreemem with the Plan attached most be submitted to Travelodge prior to the expiration of the Original tbiny (30) day core period. TrAvelodge determines that the Plan and the asaOCiated Completion dates are satis5ctory, it Will ==w the- determines that die ? Agreement a? return a copy to Liowx. If Travelodge unns5ctorybecause it is either i lent to achieve the 425 score mNiceme it or the length of time to complm the Lsb is too long, it will revise the Plan sad rearm it to Lioemee with a new Improvement Agreement for aecadon and return within seven m days. If the revised Plea and time schedule are rejected or ignored by L3ceasee, the Lice¢se will be terminated if the unit fails reiaspectioa. Iioemce is advised that ffi the event of a Lioease aamimaon, its obligation as comply with the Post-mminahoapmvisiOa4 imposed by the License Apura m ad Fraaebise open *g Mamui shall remain in full fora and effect. Travelodge will insist upon strict obligations performa>re of such . Please ¢omact William Crossett, Director of Quality Assurance at (701) 95248509, as soon as possible MWM7 9 this default. We urge Lioema to act promptly std effecdvel Unit intO compliance with the Standards as soon as possible. Y to bring the Sincerely, 'a?.uy??o,,,, M. Monique ga. Franchise Administration cc: Robert ZapleW Bill Crossett Larry Byrne 1 DATE SENT To FA A- 1 -y'] DATE RECENEO SY FA I ? ?I ?;! QUALITY ASSURANCE FAILURE (?( . GII :H FIRST TIME CON MMISCORE FAILURE FIRST TIME HOUSEKEEPING FAILURE Q SECOND TIME comrcroscM FAILURE M SECOND TIME CONDITION FAILURE- IMMEDIATE RES. RESTRICTION Q SECOND TIME CONDITION FAILURE- 5 DAY LETTER Q . SECOND TIME MDUSEEEEPWG FAILURE - 5 DAY LETTER Q MULTIPLE FAILURE RES. RESTRICTED MULTIPLEFAIWRERES.NOTRESTRICTED Q MULTIPLE FAILURE - IMMEDIATE RES. RESTRICTION REOUIRED Q F&B FAILURE CONDITION Q F&B FAILURE - HOURS OF OPERATION Cj CONTINENTALBREWAST FAILURE FAILURE - DO NOT DEFAULT, SPECIAL CIRCUMSTANCES FAILURE TO COMPLETE PUNCHUST AND ACHIEVE PASSING SCORE [=1 REFUSED INSPECTION WORKOUT IN PLACE: YES- NO_ COMMENTS: WORKOUT INCOMPLETENOID 1 ran us m 11oaWpYt SG ?4------ -*J-?Onr ACRA Pan r?M ie•r_? ..?__ M*ftww MPJM OdIG7tfldM / 3tBndMd. LifGllBiP. 7?5?1ab. X1 1 - G" Qnm ftkm& cq 1~J.Q) RMAMonmt n w ?"ift cm &w" Comm 04 ul"m cm "m am c I , 0q. PW Ai M*AkaM P1P3?-.s ev„b; 1? MOW CAI P sp- CM O"Mucommrft Pftkom k ]M hlh.an llo"0 TnWy?I7M W. PaWPaM. tMw ArMIr 01ns • (I01)42S.g0o • iNt(7G1)uP.1J77 UGAPOMAMIM. ftp / TUVfCMMC6IM-ftp2 i• T IIQi A PM H. 3U AIM TM iMrltuw hlllr • ::. ' ? ' ''OOM.I?OD_.wrrrq low ?M .. 1WrsOrMp10s0.?sps q•IW.OnIN o-. 'N . itw N'.117.??'..i? -•,... rya. Ij•. s. .,, ?I?)? .:nt;??;Guesr.RooiNS,:. ' ..-?? H .o . • •.A tC P KOTP t pssisl .. 'RCS : 0 7 Q n, is I?I?.y?WY?s''blrgsOnhllsl?t/?jR: ';•a'- O <, f0 >0 •. +w s?1?rllilOSlyuy4yy.. ',1 ., 3 N > 3 . ------------------- r ' - V'• 5 ?1 yam,. . A-un tr41?14/1MM0411.r.nrv .L:. 12-2 r bftd 0, 4 IOU I'Antim ieffolcom i0w'YiMi'lrjllti[0111iC '? .Gti'•i; :.? 0' 0 / .. 0?*AI%fi? '+ 1 . rMw?7?iworn ?a rwr?Orr?Frr,r+.:::.??:'s. 1'. 'F :' .,!'. `• 1? 1Mw'trsa?.ra0i.r'1 riPaaarrr . a : ?• ig1Y?yUWNYaO..trr /UbaO 1MSS11Ats :it 7. Is .. A IMO. 1148 iM/sa %"**sun 1 0 7.10 ?. r• '? 0 ? 070 q '?w-Me ncwa,?www?raa ••'o '0 12 't2 ?,;?wl r 3eM > ? . rw.U4.0at0irss.?;••.. :. 0 t0 DMI.'i1A •0 7 0 .. ?oloP_?n-ilmr+uovt.?.¦n oraet7al. - tw L..w burs?A.atIL6r..0.... o it'• AM.4.NOw?OW ??? " ,pwvokd t$7 • ' AO?tMIOSatOSSY . %': ''` .4+; ._•Mor1y.7MM ,104 ? .. ? IIIIIIn 1114 T11K6 • ? ?'. '.'?.. -..' .' . i SUMMARY NOTES -[YMbf?O? r?S AIL-LO?.f?Pt 41 ?11ryC A O??Sd tw l .::: 10 .. Exhibit C '.• 3966804 3 16. .1 OF WO VIA OVEaMr_-AT COURrcn All American Plugs. Inc. c/o Thriftlodge 1179 Harrisburg P&e (Route 11) Carlisle. Pennsylvania 17013 Attention: Mr. Glen Mimafer 19fiBi3-1I3 a?.a aa?ar. 06510700 August 13. 1997 w14. afiVem1ICO" as 6.60 ap 17013 RE: N OTICE OF CONTMUINGQUALITYAWURANCEDEFAULT-under License Agreement Franchise dated March 29, 1995 ('Linxme Agreemeot7 for the operation of Travelodge System Unit #9712 located in Carlisle. Peomylvania (the 'Unit') Dear Mr. Mitstifer. As you may already be aware. the Unit 611W is second romeamve Quality Assurance inspection on . Aug" 8, 1997, with a score of 226-F deficiency Points. A copy of the impecaon report is =dosed for your review and idmafies those deficiencies in need of your homedpa0c intteaaon m oeda to remedy rye Unit's fiilure to meet the standards of the Travelodge Howls, Inc. ('Travdodp-). You were notified of the previous failing inspection score in the default letter of April 15. 1997. and unfortunately. the default remains uncured. Accordingly. and as stated m our prior default lever. the above referenced Unit is subject to immediate suspension of reservation services. prior However, in our continued effort to assist you in improving the Unit's quality. a derailed written improvement plan, specifically identifying the 'Wrovemems to be completed along with the estimated eompWon dun, must be received And approved by Travelodge prior to August 209 1997. in order to avoid reservation suspension. Each submitted plan will be reviewed by and should be submitted to Bill Crossett. Director of Quality Assurance, via overnight courier to 339 Jefferson Road. Parsippany. New Jersey 07054 or by fanicul at (201) 428-1377. Mr. Crossett can also be readied at (201) 95248509 to answer any questions you may h ave. If a written improvement plan is not received and approved by Travelodge and the Unit continues to fliLl! to License Agreement Travelodge Quality Assurance Standards by the due specified in the approved plan, the for the unit may be subject to termination without further notice. We look forward w assisting you in our joint endeavor for improved quality and ever-increasing profits. Age. please contact Mr. Crossett ar the munber outlined above regarding this Quality Assurance default. Respectfully. %Ngle?fY)ek,?? er Franchise Administration Pled.. 4:510M _ s? EIP W 4'1 113M m 1-l Dft ONTO Enclosure a s" xq. ftWPaN. NJ mole (ZOt) 42e•eroo FU cc: Robert Zapleal/Russell Moserowitr/larry Byrne/Bill Crossen 53r6 .r. 1 1 ... .. i __.- 55:.1d1? Af i6-.a Or.alRgar:i-F-q? roo.Vr.: ?1'3T . - QUIWTVAssURANCE WWWN? T ANO RAOEMARIC Ad*e": 22 f /Q/^? pl k G EVALUATION REPORT -? PMdudDr*Wft: •(yuURlr. 97/z ?.+NOn. Pamar..r 6avi ?" 24-F ?? N&dpt ?owwww+.aal.Dw1e, Alvh%, / _ __ .. Are V.. Ail t0- ,... - _._.. Vga? 02 .. S - .?„ Cl=m 42 MAIN" %Ww - I Q R . L lr•L Clsanun"s I W i111811M1GS Bows Polm s yr. t.d sysma crrwr. rrI1N161NR 125-11.1 I tpe 0'IP M 116! ACjcr6 RSI IT0 _ Ours mm Rd.n Rol ®Rmn aw"W llq ?pL TMNQ Ra _ Smab OwdmI Rol _ Crpir M _ NA AMR" M u "ft Ro1110 gwop R Sidra 091 Yemow R0i 2r R. swpw IA bard Can PaPw Rol ownMComamns WW/Me rr.ICWAMMJOM"Arrrr Enm"Awmdit " ON~Tnrdreo7 FMkAM&rr Tnveludse llulth, IRe. 0UJOWn Rod-P&WP&N.N"JrYy07064-(701)470-9700-FAX(701)470-1077 TIOAFOftema•pp.1 I Z0 37V. SSG %MmIJfl C96LS69VT9 0:81 L66T/68/88 D owD; GENERAL AREAS Mre?rb: AawlwrC?rc? Wwra ar P7WY011fYM661pIr:OrwiRllprw•h?11RtYW?wW Ywlwr? S al. I I. 1 W urwr..6w+rr... Cam. S1Ow0O s a/wrarrul A MC dDMSw?. ? W?r?wr lyiywrtawnwer Oenyl. 71 b?.c..w.re.,.esR Frwpru.w L" will 11 sl w t c 1 2 6 1 6 DM1 j a S +i + 2 a 00102 4 10 21 D 7 r Ott 7 1f dD2 6 10 Pop TOW k N S K O ? S N N T A A . F D f f ?. to 1 ' ?y r? 4 TLQAVOgklW I0Y6 . Pv 2 o?.1ar GUEST ROOMS A e t r e6aa.ed 4.p.adwNlaaw iaar. G. ca&w- l,C 4ar 0 2 (TIC ?aedlMaMMlrewea: a.aais oar: aar., SWWa+. UO 4 /020 oadea k%%WW%aa.rneaa%w"W%lo.. Caoaa/a" Oirr.ll?otaeleaa act aMUr. r?wrt last 0 [t)12 25 -^..?... °.?^+w aaacwaft%may Q)2 p >a aM w4m"ow&a " "rlye • t2 2a Tdwwaz%VAWo...w.mwwmN ftmow 0 rrra.ar taa.bNa0Y44 aYaMaa?ta?Cla?prrYCaar ? 1 3 a I? OIw./. as et.rr? *+? ?? err ar+rrNaf v ?s o?ro.a OiarYYii0iL0asa?OKIDOYO40YV YLe2nnae0:Y ft~SWrndUm*daUMwryaeada%M%Vftft a %Vm M V.alaaWnawa eaaaauWw •ew.VV.r.awreyrq,e?,,., 1 2 0 euee.aprew. Tyr. Chnaas,ana ua?.y j,IMawbrAawina 0 56b26 sA.a& a : w room roe mm 14wtlagao /en? rare 1raa.afe -rera.wwe -?- Aad&" eaaa Pane elsraaGhla?'rr/ . -?? aaaam TOW 5a Poo noooaae0al0a6 • Papa 3.0o.. 0*4414 re 3NW Papa Tow tS Pros Pop Tow rwP.a+.p.ww a??r 5?-aao•D,7q . jr7- - X96-F arrraara ti?Aaa 995 XOMISfl C96LG69019 Er:01 L661/68/00 OW"11997 16:43 6146997963 QFI@NY 556 PAGE 05 F_F ti SUMMARY NOTES " 3JSd 966 MMIAM [961i69rt9 Cr:81 lLit/N/ii LwNo_ 971x. _ • DATE: 8-P-47 M mMMldfon wBn Uw TnneM6{R u ROplaaelaaM I MM NOn•BO apa ft op mmmu nm f A=M0 netVAhpMlMjwM aparWloa slmyplapwWTM aperyle k mmwBs an a6 lIIIBY 101WAM rlwtJ - _ _ /O T: vvjlt .vr 0 .F/.ids 77=r e..e .;.0- lei 1/0 1 L s. ?o 9 imebdga I%W MC aar ay -r9aaMa a QMy.1(VICIPM NO ism Ur IMr arJw ka0 MwowawM an nea+Y) I@ Mwsw as tint / pww" I apse a am prMiW WINNOW for wswhv aM MM' . ar I noenoa?e7rer?rMaaOPeyM'.Erarradbsa9lrrwkwaapo110e0EwinyroaQMy4fnro Wpwbn Mid M IaW In a T IN" OWE n 1? ?.%fT'{IC? or- ,? Qrl QA MWUWAWW ZG 3Md 99S XW.Mldm F96G669?19 6e:BT L66TABAO "1 1.1110 1 W. Exhibit D Frandw A*nnsftm Ha"" O vwM January 30. 1998 VIA OVERNIGHT AERBORNE EXPRESS Thriftlodge-Carlisle 1179 Harrisburg Pike (Route 11) - Carlisle, PA 17013 Amw Mr. Glen Mitsda Re: Travekdge Franchise System Unit #9712 located in Carlisle, PA (the "Una"). Dear Mr. Mitstifer. Travelodge Franchise Systems. Inc. ("Travelo*-) has been advised that All Americas Places. Inc. ("Franchisee") has failed is third consecutive Quality Assurance lnq)mdm on January 27. 1998 with a score of 191-F. Tbis most recent Quality Assurance Lupecdon indicated that improvements in accordance with the work-out plan have not been completed. Therefore, as of January 30. 1998 reservation service to fie Una has been suspended due to the Unit's cormoubig default stasss and the license to operate the Unit under the Travelodge Franchise System is subject to knmediate termination. Furthermore. Travelodge will cVkm replacing this Unit with another facility in this market. If you have any questions, pI=w feel free to call Bill Crosses to discuss the situation further. Mr. Crossett can be reached at (973) 496-8509. Sincerely. Jodie M. Sannaaaro Manager Franchise Administration cc: Robert Zapleval Russell A. Moserowitz Bill Crossett w MW seMera Cc" 4 cep i41,j94325jP6 S.. Elp 01130/96 W1. 1-'- Chg. 6.50 to 17013 DM ea 065205000 "To 6 Syiwn Way ftmpptroy, Ni =54 (M) 4263100 Fax (201) 359.5345 DATE SENT TO FA '.-T l • a j DA 'e RECEIVED BY FA QUALITY ASSURANCE FAILURE Q FIRSTTIME FAILURE Q CONDITION Q HOUSEKEEPING 0 SECOND TIME FAILURE - S DAY LETTER Q CONDITION Q HOUSEKEEPING Q SECOND TIME CONDITION FAILURE- MAEDIATE RES. RESTRICTION MULTIPLE FAILURE RES. RESTRICTED Q MULTIPLE FAILURE RES. NOT RESTRICTED 0 MULTIPLE FAILURE - MAEDIATE RES. RESTRICTION REQUIRED Q F&S FAILURE CONDITION 0 F&B FAILURE - HOURS OF OPERATION O CONTINENTAL BREAKFAST FAILURE 0 FAILURE - DO NOT DEFAULT, SPECULL CIRCUMSTANCES 0 FAILURE TO COMPLETE PUNCHLIST AND ACHIEVE PASSING SCORE Q REFUSED INSPECTION WORKOUT IN PLACE. YES WORKOUT INCOMPLETEIVOID F-7: dFars?rmt•w.. 7L•I Ihn • . o. r3ol.'..:. a? wae•4IIG /yf . pq CE QUALITY ASSURAN ' EVALUATION REPORT A:Owea: II79' ?B<14l fX/ L'6. 9rret; _ Pmertpsrp?rtw.'.7ifO/G Sear RGI.Y. _ uwn•9 JI Z ?• Na dllmwa??TGrwr ww0er . E• . . ,:+ ,,t.y';. .: Iwo?Mgea icswalnpr wow MY. ' : wr: Q Y12•. : 32 :.:..' :. ore$?Q saw 22&F - • x , _ _ ,r t . ?- e+3?2 Ean ? p ?- . ^.'•:+.: .•. EVAwwtiowEwwawwv •, ... R . p e?eawwwaaNn _ •,,,. ,r_^t ?? ..'GKicIIJ6".'. •sal•CAIU' R.1'M: R ?w7XYtMQr: 'EIIa ISO, 4 C, rt% oamm -s ig w "s- . ,, C.. •f IMoI NEriao?'.? • soorsOein . • b. . f SIP r3 "Pam ,Zy •. ? ? ?... .' .:, Yy0?DE?dAfIC?a{?•h11dE110E ,:.7: . p F ' ? I I _ _ , , .. , ?. . ?? . M?.. 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M{nlyMwOwYlo OwePiolwMwMlYr?lst?tMSil FiMAM14Ml? Y pO7 7' is ' p ?• h7!ePRMF4M1:rMw7plop A MDmm MM YSwpNR.. . e i ?r~i{?ena ?a w'a?rw. ws•?.,?. o ?r.; u Lwaowv.?rfwasMy ?.° la fM Wl?lfMfr:Nw?w.OYyrn4rLrwrr e0.)2 S. 10 ?.:• w4e.mMMifwoiiaf:s, f...r..M.+rw o- xos w fP f'K.ifM, rrn/lv?{rur+.ri.rM{nrr erws..Fa .. 2 (' : ?4wMalrnrY°Ia1w,L.wfJrr T?tM..i..a ryl a.wl.nfAj, P.?1Ff1..f?...OW ,• bRw?C??iPr?rOHl.P?nD?IA?w?W?•??Orwafp„A"7Ln? 1q .. 'r pa" vo?wo TLOAF(yMn510i6: P10FS . .. GUEST Rooms • Y C ? 1 Gensrel M?.rbMean Oser GAIIOLr /56091$8.?7'J 0. 2, D10 • _ Ooa.nYWwwNlra+w:Er?nwOr.w.i/?.a OQ4 t0 z0 I a.l rMMr.Mwc s.e.+r leak 0" War V. C:O-! vt lOeer.DWM" McMee bt VAN Dw i.se4el Ltl ?MYSMS: Cs?eele, ?es. Mrwe ----7p--73 -T is o - WIM Amp-- AMA -4 0lRL4Ql?e?1'+i.?Mwwr.lYe?e.t O?t0et0.kT? ' 0 ur+a.i:fer.aM war?l?. p.Ni ID1225 Affing .6 Uvmftft!vrlh4tb?Wftw- Raft C072 6-10 %' TMeMp!4!!"??wweM1.M11: COS u 25 }; isG4UNRr•MleMl7rnL4,Awllwss.ll?pMi _ N VAC:OeweNAL GMaI OMl TwsMM. .: 0 12.25 , • srrrNaw114?.arr.aw' 0 4 . ro. (a S : • :...... .. ?1.ww a gofbfv-mllm MesMia>?a" 0 S 25 j;: :•. 114 . -?Ow itiRTeq:,MhlM102wLAA1Mp1eY0sOL p02 .6 S: wr.wworsw.TS?asM?AMMr.s.w.' j.:; p•dncwi#u?at?.u.w.u.pswvssaw.?aw . r. o.rus+lrlwu+.wat YIM.OwML0:21w? 1. swswwA;Mds Or?s>wwnserr.MAt, aLS+l1!iyKLMw sTaMrirp.'.?eiar . Ck"Aeam ftWL 11 MWdCMM1YTe1q 1 2 S ' swMISOdYIt1`alyUYeaCIeMrIMwe,Mrwa21MS.1LwwMr111 7 16 j• 1swY: 4Mi1fnM,YlMrl. Lgwlell•Te4 aMrr. 0 7 Is L ?w.lw:wn.;c+ln.???e+ .4+`sti++e?arr• .. o o .1w I ?? -- -spAsw i, s l?MAwL ?b 1• Yw1YUYwe 'wg1eMV.wrewlyMtlw. ?I 2 s 6wdLwqnbm Tebftmw..?Cb wree. SMS DWPVAVS MM UK"UNi Aft "I 0 S g)* AeeMA. L:.wC.wr ILILNews/eMMa I i. _ M014I T0vosew-pwf le• 1w CYVI.G iNMI: • LiS eMSb. sMw..', S 10 AYMIMMM.Oisi! -0 2 is 6 -AM TOTAC'1nl ,OF-W•?MOMAMOV2s A.••: M»rowTSrunM j 11sM ws;l bmrmftw L? fm NLrew!= MMa w? r.o.ww. t'< Ili.eb.Olo 1..M111!sY I?aYMS??.NMMIiI n .AMOM.Tal11 21e PA~ 1T.L??r reid#%M ra ?'f rwu.wr.Mw ',? .. LMSrerrl MswM rew 1LOMipYl0lfOM •1yp 3 .Mw. 02MSS . i 2 bi :/ t i ?s 'j t r ?VS7'.C F, rr `?Ei • Y. F ' ?f• . f1. CY] - -Yt rr .. Ll '' F.r .? 7 ? ,1 • c .a r S 7D ?AI'fAl/1 A .lrIL,1Z :9LO/+ w 17rh7f7Atl Tf ?pl4did/MI/G?.:? ':? 1 lie; T 1/ b?A brJQ'L ?fj aA../r ups .lr.s ?:r>iatiyt?. ?:?33.L1F?-¢ r M1 tiM ?? :T1E+oc?? ouuln.nn. a.... Exhibit E Travdod e, June 26, 1998 VIA AIRBORNE EXPRESS Mr. Glen Mitstifer Thriftiodge - Carlisle 1179 Harrisburg Pike (Rte. 11) Carlisle, PA 17013 Re: CONTINUING QUALITY ASSURANCE DEFAULT - Travelodge Hotels Unit #9712 located in Carlisle, Pennsylvania (the •Unin Dear Mr. Mftstifer. As you may already be aware, the Unit failed its fourth consecutive Quality Assurance Inspection on June 3, 1998 with a score of 196-F. You were notified of the previous falling inspection scores In the default letters of April 15, 1997, August 13, 1997 and January 30. 1998, and unfortunately, the default remains uncured. Furthermrom, reservation service for the Unit has been suspended since August 28, 1998 due to this continuing Quality Assurance DefaulL In the previous letter dated January 30, 1998, you were notified that the Unit was being reviewed for potential termination. You are advised that the License Agreement for the Unit remains subject to termination at any time, without prior notice to you. Per the terns of the License Agreement, if the License Agreement is terminated Licensee will be responsible for payment of liquidated damages. We strongly urge you to contact Elizabeth Hannon, Director of Franchise Services, to discuss this situation. Ms. Hannon can be reached directly at 973/496-8952. Please respond immediately. Sincerely, Patricia- 'M ? Senior Compliance Coordinator Franchise Administration cc: Robert Zapletal Jodie Sannazzaro Bill Crossett Elizabeth Hennon 4 4676217 931 .,r..w. 80400M copy t.* :fi7ic: -f3 OF 06! D= 251 a Mti :'' Cg. 6.30 no !70!3 sow. kh-S-C=0" Deft ON To 339 kDer" HD70 P0. BOX 278 Pus*)W W 051 (973) 428.9700 Fax (973) 428W DATE SENT TO FA*g DATE RECEIVED BY FA L?1 •l 0 QUALITY ASSURANCE FAILURE FIRST TIME FAILURE • Q CONDITION Q - HOUSEKEEPING 0 SECOND TIME FAILURE - 5 DAY LETTER Q CONDITION- Q HOUSEKEEPING Q SECOND TIME CONDITION FAILURE- IMMEDIATE RES. RESTRICTION MULTIPLE FAILURE RES. RESTRICTED Q MULTIPLE FAILURE RES. NOT RESTRICTED Q MULTIPLE FAILURE - IMMEDIATE RES. RESTRICTION REQUIRED Q F&B FAILURE CONDITION F&B FAILURE - HOURS OF OPERATION Q CONTINENTAL BREAKFAST FAILURE Q FAILURE - DO NOT DEFAULT, SPECIAL CIRCUMSTANCES Q FAILURE TO COMPLETE PUNCHLIST AND ACHIEVE PASSING SCORE Q REFUSED INSPECTION WORKOUT IN PLACE YE8 WORKOUT INCOMPLETEIVOID COMMENTS: 97/? • awa3n2m 11:26 72724 M47 THWMAM PAGE al ow lc*Y l?uOalRawc?m/,t/c 0? I7o/ 3 QUALITY AssuRANCE EVALUAT ION REPORT &,Aa .m6w.,.. haaaowginaw: ???•'>`f'//.? IM . 47/ Z ?' ? ` aReaOS ?•? GRwO1MOn Or R r /• ??t ? ? ? y . O. 77Ow I?aen.+7eO?O insl Wawa O.ap Owwr ?...r.'s... ow Az7-- 0 am API -? .. ,,.. Trc. oft cNadloaw/MWnwnonce I @onusPOdnM MNaT DMcrM1CIM />1talWalda LOP GOO= am LOW CM lpl Gad%wARGk" R71 ex ZRaan ywdmpm Mp TniaV Pal _Swer oOlmRO o71 AUX "M om "m - yMy c-w*u am _ M. Am RaW qq zw CP. frdm4 WI .1?, ;Vea? iiwfOS 171 a.R? Can P upan CM 7 o"nal cen"W" ? ? E+wr ow RrwlTa. f?0 aM JOaafon Raw. P T^'Awp Wasik I.c PrMaawq'• N" JM" anM . (Mt) OM.7Ta7. PAX (gal) 4M.12T1 TLWOO aoa,wa • Pme t OVOLi]7? L7: 2i 7272473447 71Rfflila? pwa Q b+l was ~471L ^_____ RG "W W"lOK • ?N4 7 ecieailese 11:76 7172473447 TmtD-nj= ODi1e 6, p GUEST ROOMS A a c 0 2 0 007020 I u Owne•haankl6,alumn?A okommwmkod 0 4 0 C?h 6 1 t 6 0 6 1MwMUY06eee,14Ye, .ft 1?Mfeew. Mew??wY) 1leeeer,116wM MiY Reeeln w.a ow 9 TMMben?.en TLCWOW M,0e6..op 7.14x.0066 Te161 N IMP •? 3_0•?_• V+ ft .a "mom-, wee u row No TOW 77 MIERMIN ..? o.ae7r. 3o y • !f?OWIM 11:26 7172d73447 ^_ M? N a 9;? _ e.o?_ yr SUMMARY NGs ?'? ? • tK/tU/I77? '1;7i 71724M"? 7Nt¢p row PNE as ?ri?: s_oJ_YySUMMARYI?QOIt,? ?..,f,'r(f_,L_ QQ 06/83/1998 11:26 71724:1^'47 IINITNO.: 97/ y DATE: COMMITMENT TO QUALITY IMPROVEMENT flR MMI)ff UtNLKAL In Conpatalon wlth the Trav** QA PAgnswUle I hens WmlMlad =aft impmvemerda Ivl IF soomnph6hed, will Improve the guo exper*m as my lxMWW. The walMC Inwmvonterrs an &% /O 2 3. PAGE 07 PoMb Oaxllgew /a S 4O L 3o 5. JI ?o Cotrams: _ YL L ya j innelodQe HOW Inc has my carnWh erlt b Q(W y. I t eWilm and agree dW On above Msled Imwwmnems are necessary to xttprote ft Must aperlatm I"10 pee pwnml r68parabeny Tor enswhq thin hash Improtvwrw8s arecompIMedaRtesafestoppcnur*y.fWft altheseltttpelem MvAbepmwdeddwftmynewQuapyAssurance Inspedlon which wig result in a 5 Pont bores. d-o3-9S General M aW Dab QA. llepr6lWal 6e QMCTQRL PM6 „1- .11,."o® Exhibit F July 20, 1998 VIA AIRBORNE EXPRESS Mr. Glen Mitstifer 1179 Harrisburg Pike Carlisle, PA 17013 wd rik" S S. ft leoder Re: NOTICE OF TERMINATION of license for Travelodge Hotels, Inc, Unit #9712- ' 83254 located In Carlisle, Pennsylvania (the'Unir) Dear Mr. Milstifer. Travelodge Hotels, Inc. (the 'Company' or 'THIS and All American Plazas, Inc. ('Licensee's entered into a License Agreement dated March 29, 1995 ('License Agreement') pertaining to the operation of the Unit as part of the Travekidge®- system. By letter dated April 15, 1997, THI notified Licensee of IG failure to meet the quality standards the License Agreement requires, after the Unit received a fading quality assurance inspection score of 209-F on March 27, 1997. Representatives of THI re. inspected the Unit on August 8, 1997, January 27, 1998 and June 3, 1998, at which time THI confirmed that Licensee did not cure this quality assurance default. Following these inspections, the Unit received failing scores of 226, 191 and 196. Inasmuch as Licensee continues not to meet minimum system standards, I write to notify Licensee that the License Agreement is hereby terminated effective July 20, 1998. Pursuant to the terms of the license Agreement, licensee must completely de-identify the Unit from its appearance as a Travelodge guest lodging facility within ten days of your receipt of this letter, licensee must discontinue further use of the Travelodge tradename and service marks on or about the Unit, including any forth of advertising to promote the Unit as a Travelodge Hotels, Inc. Unit Licensee must remove all directories, guest comment cards, stationary, matchbooks, do not disturb cards, ash trays and other items that bear the Travelodge name, logo or registered service marks. All billboards, on-premises signs and listings in telephone directories, the Internet, travel guides, hotel indices, and similar guides, in which the Unit is identified as a Travelodge Hotels, Inc. Unit must be changed. Finally, Licensee must return to THI all training documents, operating manuals and like proprietary material. 4245200 234 "1O"" BOOM copy ?. ._.:c^.:•::' &=. =7: wt .. ono. n, :.. M M. c.n 339 Jelk w Rog P0. 8W 278 ftmgip ny NJ 01054 (473) 428 91a1 Fax (473) 4286057 Mr. Mitstifer July 20, 1998 Page Two As a result of Licensee's premature termination of the License Agreement, Licensee is required to pay to THI liquidated damages in the amount of $45,000.00, as provided for in Section 2. paragraph (b) of the license Agreement. [Calculated as the greater of two times the amount of payments due from Licensee during the last twelve (12) months the Licensee was part of the Traveiodge system or $45,000.001 In addition, demand is hereby made for past due Recurring Fees and all additional monies to which the Company is entitled under the License Agreement The monies due and owing to the Company (including any estimates for unreported periods through the termination date and not Including liquidated damages) as of July 20, 1998 are $1,117.04. Payment should be received within 30 days of the receipt of this letter as required under the terms of the License Agreement If Licensee does not complete de4dantification and remit payment as required above, THI will have no alternative but to commence legal action to enforce Licensee's obligations and to collect as monies due, plus damages and other relief pursuant to the Lanham Ad. Should you have any questions or need any assistance with the de-identification of the unit please contact Patricia Murray at (973) 496-5210. incerely? Vice President Franchise Administration cc: Patricia Murray c? f.L U cri C 7, U SHERIFF'S RETURN - REGULAR CASE NO: 1999-03609 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND TRAVELODGE HOTELS INC VS. ALL AMERICAN PLAZAS INC CPL MICHAEL BARRICK , Sheriff or Deputy Sheriff of CUMBERLAND County, Pennsylvania, who being duly sworn according to law, says, the within COMPLAINT was served upon ALL AMERICAN PLAZAS INC the defendant, at 1730:00 HOURS, on the 15th day of June 1999 at 1179 HARRISBURG PIKE ROUTE 11 CARLISLE, PA 17013 CUMBERLAND County, Pennsylvania, by handing to RON CHILCOATE, OPERATIONS MANAGER a true and attested copy of the COMPLAINT and at the same time directing His attention to the contents thereof. Sheriff's Costs: So a Docketing 18.00 Service 3.10 Affidavit .00 Surcharge 8.00 mas ine, ri $2-4.1o BUCHA 06/16 199INGERSOLL PROFESSIONA by epu Sworn and subscribed to before me this iL day of ' 19 99 A.D. ??? 816529 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW TRAVELODGE HOTELS, INC. No. 99-3609 V. JURY TRIAL DEMANDED ALL AMERICAN PLAZAS, INC., a Pennsylvania corporation NOTICE TO PLEAD TO: Arthur L. Pressman, Esquire Buchanan Ingersoll 1 I Penn Center 1835 Market Street 14th Floor Philadelphia, PA 19103 You are hereby notified to file a written response to the enclosed New Matter within 20 days from service hereof or a judgment may be entered against you. Date: l 1 at cl 9 BARLEY, SNYDER, SENFT & COHEN, LLC BY: Kendra D. McGuire, Esq re ?- Stephanie Carfley, Esquire Attorneys for Defendant 126 East King Street Lancaster, PA 17602 (717) 399-1525 Court I.D. No. 50919 Court I.D. No. 79136 816529 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW TRAVELODGE HOTELS, INC. No. 99-3609 V. JURY TRIAL DEMANDED ALL AMERICAN PLAZAS, INC., a Pennsylvania corporation ANSWER AND NEW MATTER TO PLAINTIFF'S COMPLAINT Admitted in part and denied in part. It is admitted that Plaintiff THI is a corporation. After reasonable investigation, Defendant is without sufficient information or knowledge to form a belief as to the truth of the allegations concerning Plaintiffs principal place of business or under whose law the corporation exists. 2. Admitted. 3. Denied as a conclusion of law. Insofar as a further response is necessary, after reasonable investigation, Defendant is without sufficient information or knowledge to form a belief as to the truth of the allegation and therefore the same is denied and strict proof is demanded at time of trial. 4. Admitted in part. It is admitted only that on March 29, 1995, Forte Hotels, Inc. entered into a license agreement with Defendant. The license agreement is in writing and speaks for itself. 5. Upon information and belief, THI has held itself out as a successor in interest to Forte Hotels, Inc. 816529 6. Denied as a conclusion of law. The License Agreement including Paragraph 2(a) is in writing and speaks for itself. 7. Denied as a conclusion of law. The License Agreement including Paragraph 6 is in writing and speaks for itself. 8. Denied as a conclusion of law. The License Agreement including Paragraph 4 is in writing and speaks for itself. 9. Denied as a conclusion of law. The License Agreement including Paragraph 3(c) is in writing and speaks for itself. 10. Denied as a conclusion of law. The License Agreement including Paragraph 3 and Rider (A) is in writing and speaks for itself. It. Denied as a conclusion of law. The License Agreement including Paragraph 2(b) is in writing and speaks for itself. 12. Denied as a conclusion of law. The License Agreement including Paragraph 2(b) is in writing and speaks for itself. 13. Denied as a conclusion of law. The License Agreement including Paragraph 2(b)(iii) is in writing and speaks for itself. 14. Denied as a conclusion of law. The License Agreement including Paragraph 20 is in writing and speaks for itself. 15. Denied as a conclusion of law. It is denied that beginning in 1997, All American repeatedly failed to operate the facility in accordance with THI's system standards. It is further denied that All American breached its obligations under the License Agreement. 16. It is admitted that on March 27, 1997, THI conducted a QA inspection of the facility. The letter of April 15, 1997 is in writing and speaks for itself. 17. Denied. It is denied that All American did not timely cure the QA default. To the contrary, All American did not breach its obligations under the License Agreement. By way of 2 816529 further answer, the letters of August 13, 1997, January 30, 1998 and June 26, 1998 are in writing and speak for themselves. 18. Denied. The letter of July 20, 1998 is in writing and speaks for itself. It is admitted that THI has attempted to terminate the License Agreement. It is denied that All American failed to meet its obligations under the License Agreement. FIRST CAUSE OF ACTION BREACH OF CONTRACT-LIQUIDATED DAMAGES AGAINST ALL AMERICAN 19. All American incorporates herein by reference its answer to Paragraphs I through 24 of this Complaint. 20. It is admitted that on July 20, 1998, THI attempted to terminate the License Agreement. 21. Denied as a conclusion of law. The License Agreement including Paragraph 2(b) is in writing and speaks for itself. 22. Denied as a conclusion of law. It is denied that All American breached its obligations under the License Agreement. 23. It is admitted that All American has failed to pay THI liquidated damages. It is denied that All American is obligated to pay THI liquidated damages. 24. Denied. It is denied that THI has been damaged by All American's failure to pay liquidated damages. To the contrary, THI has not been damaged by All American's refusal to pay liquidated damages. 25. Denied. It is denied that THI is entitled to attorneys fees for proceeding with this action. To the contrary, this allegation is further denied as a conclusion of law. WHEREFORE, All American requests that this Court dismiss THI's Complaint. 816529 NEW MATTER 26. THI breached its obligations under the License Agreement. 27. THI failed to meet its obligations under the Licensing Agreement, including but not limited to, THI's failure to activate the reservations system promised to All American. 28. Employees, agents and/or servants of THI made false representations to All American, which misrepresentations induced All American to enter into the License Agreement. 29. Employees, agents and/or servants of THI repeatedly assured All American that any deficiencies noted in a QA inspection would not be enforced, and All American relied to its detriment on said misrepresentations. 30. Agents, employees and/or servants of THI breached their verbal representations to All American when said agents, employees and/or servants advised All American that it would be the exclusive Travelodge facility in the area. All American relied to its detriment upon said misrepresentations. 31. Prior to terminating the License Agreement with All American, THI entered into another Licensing Agreement with a third party, in violation of its representations to All American. 32. By entering into a License Agreement with a third party, THI has, in fact, suffered no loss. 33. All American did not breach its License Agreement with THI. 34. THI's claim for liquidated damages is inappropriate, illegal and unconscionable. 35. THI's claim for attorneys fees is inappropriate, illegal and unconscionable. 816529 WHEREFORE, Defendant All American asks that judgment be entered in its favor and against THI. Date: - 19 J 9 5 BARLEY, SNYDER, SENFT & COHEN, LLC BY: Kendra D. McGuire, Esquire Stephanie Carfley, Esquire Attorneys for Defendant 126 East King Street Lancaster, PA 17602 (717) 399-1525 Court I.D. No. 50919 Court I.D. No. 79136 81(529 VERIFICATION 1, Stephanie Carfley, as counsel for All American Plazas, Inc., verify that the facts set forth in the foregoing Answer and New Matter are true and correct to the best of my knowledge, information and belief. This Verification is made subject to the penalties of 18 Pa. C.S. §4904, relating to unsworn falsification to authorities. DATE: 9 q Stephanie Carfley 816529 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Answer and New Matter has been served, this LL1tt day of TV t- 1999, by first class mail, postage prepaid, upon the following: Arthur L. Pressman, Esquire Buchanan Ingersoll 11 Penn Center 1835 Market Street 14th Floor Philadelphia, PA 19103 BARLEY, SNYDER, SENFT & COHEN, LLC BY: _ Kendra D. cGuire, Esquire Stephanie Carfley, Esquire Attorneys for Defendant 126 East King Street Lancaster, PA 17602 (717) 399-1525 Court I.D. No. 50919 Court I.D. No. 79136 Y Cr ? ?_ 1-. 4- `_ _ U C=? 11:-- Cv J _ ?:_ ? 1" 1. 11 ( ? -? V • ?J IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW TRAVELODGE HOTELS, INC. V. No. 99-3609 ALL AMERICAN PLAZAS, INC., JURY TRIAL DEMANDED A Pennsylvania Corporation PRAECIPE TO SETTLE. DISCOUINUE AND END TO THE PROTHONOTARY: Please mark the above action as settled, discontinued and ended, without prejudice. By: Arthur L. Pressman (No. 10124) Buchanan Ingersoll Professional Corporation 1835 Market Street, 14th Floor Philadelphia, PA 19103 (215) 665-3910 (215) 665-8760 (facsimile) Attorneys for Plaintiff CERTIFICATE OE SERVICE I hereby certify that on this - day of November, 2000, a true and correct copy of the foregoing Praecipe to Settle, Discontinue and End has been served by first class U.S. Mail, upon the following counsel of record: Kendra D. McGuire, Esquire Barley Snyder Senft & Cohen, Inc. 126 East King Street Lancaster, PA 17602-2893 Arthur L. Pressman 429342-I; PIILI G=ra1 u, ,_? -• ? r- _ _ -'-- ,., . ? ? J !n C-~ ,f f IJ ?1? _. -? ...? .J C,