EXHIBIT 10.40
First Amendment to Purchase and Sale Agreement
between TownePlace Management Corporation and
Residence Inn by Marriott, Inc., as Sellers, and
CNL Hospitality Partners, LP, as Purchaser,
and joined in by Marriott International, Inc.,
relating to the Residence Inn - Mira Mesa
and the Residence Inn - Merrifield
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (the "First
Amendment") is made as of the 30th day of June, 2000, by and between TOWNEPLACE
MANAGEMENT CORPORATION, a Delaware corporation and RESIDENCE INN BY MARRIOTT,
INC., a Delaware corporation (collectively, "Seller"), and CNL HOSPITALITY
PARTNERS, LP, a Delaware limited partnership ("Purchaser") and joined in by
MARRIOTT INTERNATIONAL, INC., a Delaware corporation ("MI").
W I T N E S S E T H :
WHEREAS, the Seller, Purchaser and MI are parties to that certain
Purchase and Sale Agreement (the "Original Agreement") dated November 24, 1999,
for the purchase and sale of three (3) certain properties located respectively
in Mira Mesa, California, Newark, California and Merrifield, Virginia and more
particularly described in the Original Agreement; and
WHEREAS, in connection with the execution of the Original Agreement,
MI, Purchaser and SpringHill SMC Corporation, a Delaware corporation
("SpringHill"), entered into that certain Side-Letter Regarding the Gaithersburg
Property ("Side-Letter") dated November 24, 1999, pursuant to which MI and
SpringHill agreed to enter into a separate agreement for the purchase and sale
of certain property located in Gaithersburg, Maryland (the "Gaithersburg
Property"), on substantially the same terms as contained in the Original
Agreement; and
WHEREAS, SpringHill, MI and Purchaser have entered into,
contemporaneously with the execution of this Amendment, that certain Purchase
and Sale Agreement (the "Gaithersburg Contract") for the purchase and sale of
the Gaithersburg Property; and
WHEREAS, Seller, MI, SpringHill and Purchaser have agreed that a
default by Purchaser under the Gaithersburg Contract shall be a default by
Purchaser under the Original Agreement and that a default by Purchaser under the
Original Agreement shall be a default by Purchaser under the Gaithersburg
Contract; and
WHEREAS, Seller, MI, SpringHill and Purchaser have agreed that a
default by Tenant under any of the Leases (as defined in the Original Agreement)
shall be a default by Tenant under the Lease (as defined in the Gaithersburg
Contract) and that a default by Tenant under the Lease (as defined in the
Gaithersburg Contract) shall be a default by Tenant under all of the Leases (as
defined in the Original Agreement); and
WHEREAS, the Seller, Purchaser and MI desire to amend certain terms and
conditions of the Original Agreement to reflect the foregoing agreements.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, MI, Seller and Purchaser
hereby agree as follows:
1. Recitals. The foregoing recitals are correct and complete and are
hereby incorporated into this First Amendment by this reference.
2. Defined Terms. Capitalized terms used in this First Amendment and
not defined elsewhere herein shall have the meanings set forth in the Original
Agreement.
3. Amendments to Original Agreement. From and after the date hereof the
Original Agreement shall be amended as follows:
(a) Immediately following Section 1.1 of the Original
Agreement, the following new section shall be added:
"1.1A "Aggregate Deposit" shall have the meaning given such
term in Section 10.3."
(b) Immediately following Section 1.29 of the Original
Agreement, the following new sections shall be added:
"1.29A "Gaithersburg Contract" shall mean that certain
Purchase and Sale Agreement to be entered into by and between MI, as
"MI", and SpringHill SMC Corporation, as "Seller," and Purchaser, as
"Purchaser," for the purchase and sale of certain property located in
Gaithersburg, Maryland and more particularly described therein.
1.29B "Gaithersburg Property" shall mean that certain property
located in Gaithersburg, Maryland and more particularly described in
the Gaithersburg Contract."
(c) Section 10 of the Original Agreement shall be deleted in its entirety and,
in lieu thereof, the following shall be substituted:
"SECTION 10. DEFAULT.
10.1 Default by the Seller. If (i) the Seller or MI shall have
made any representation or warranty herein which shall be untrue in any
material respect when made or updated as herein provided, or (ii) if
the Seller or MI shall fail to perform any of the material covenants
and agreements contained herein and such condition or failure continues
for a period of ten (10) days (or such additional period as may be
reasonably required to effectuate a cure of the same) after notice
thereof from the Purchaser, the Purchaser may terminate this Agreement
with respect to the affected Property and Seller shall reimburse to
Purchaser the Purchaser's expenses incurred in respect of such affected
Property, not to exceed $30,000 (and direct Escrow Agent to refund to
Purchaser the portion of the Deposit allocable to the affected Property
as provided in Section 10.3), and/or the Purchaser may pursue any and
all remedies available to it at law or in equity, including, but not
limited to, a suit for specific performance or other equitable relief;
provided, however, that, (x) in no event shall the Seller or MI be
liable for (and Purchaser hereby agrees that it will not commence or
prosecute any action for) consequential or punitive or exemplary
damages and (y) in no event shall the aggregate liability of the Seller
or MI under this Agreement and of MI and "Seller" therein under the
Gaithersburg Contract exceed an amount equal to Three Million One
Hundred Fifty-two Thousand Six Hundred Eighty Dollars ($3,152,680.00)
plus the reasonable attorneys' fees and expenses incurred by Purchaser
in enforcing this Agreement and/or the Gaithersburg Contract against
Seller, "Seller" under the Gaithersburg Contract and/or MI in respect
of such default. It is understood and agreed that for purposes of this
Section 10.1, if a default results from a false representation or
warranty, such default shall be deemed cured if the events, conditions,
acts or omissions giving rise to the falsehood are cured within the
applicable cure period even though, as a technical matter, such
representation or warranty was false as of the date actually made.
10.2 DEFAULT BY THE PURCHASER. IF (I) THE PURCHASER SHALL HAVE
MADE ANY REPRESENTATION OR WARRANTY HEREIN WHICH SHALL BE UNTRUE OR
MISLEADING IN ANY MATERIAL RESPECT, OR (II) IF THE PURCHASER SHALL FAIL
TO PERFORM ANY OF THE COVENANTS AND AGREEMENTS CONTAINED HEREIN AND
SUCH CONDITION OR FAILURE SHALL CONTINUE FOR A PERIOD OF TEN (10) DAYS
(OR SUCH ADDITIONAL PERIOD AS MAY BE REASONABLY REQUIRED TO EFFECTUATE
A CURE OF THE SAME; PROVIDED THAT NO SUCH EXTENSION OF TIME SHALL APPLY
TO PURCHASER'S FAILURE TO PAY THE ALLOCABLE PURCHASE PRICE AT CLOSING
OR OTHERWISE OPERATE TO EXTEND THE CLOSING DATE) AFTER NOTICE THEREOF
FROM THE SELLER, OR (III) THE SELLER BECOMES ENTITLED TO TERMINATE (AND
IN FACT TERMINATES) THE GAITHERSBURG CONTRACT AS A RESULT OF
PURCHASER'S DEFAULT PURSUANT TO SECTION 10.2 OF THE GAITHERSBURG
CONTRACT, THE SELLER MAY, AS ITS SOLE AND EXCLUSIVE REMEDY, AT LAW, OR
IN EQUITY, TERMINATE THIS AGREEMENT WITH RESPECT TO ANY PROPERTY OR
PROPERTIES AS TO WHICH A CLOSING SHALL NOT YET HAVE OCCURRED, WHEREUPON
THE PURCHASER SHALL PAY TO THE SELLER, AS LIQUIDATED DAMAGES AND NOT AS
A PENALTY, FOR AND ON ACCOUNT OF SUCH PROPERTIES (AND THE GAITHERSBURG
PROPERTY IF UNSOLD UNDER THE GAITHERSBURG CONTRACT), THE SUM OF THREE
MILLION ONE HUNDRED FIFTY-TWO THOUSAND SIX HUNDRED EIGHTY DOLLARS
($3,152,680.00) (WHICH SUM IS INCLUSIVE OF THE AMOUNT OF LIQUIDATED
DAMAGES, IF ANY, PAID OR PAYABLE BY PURCHASER PURSUANT TO SECTION 10.02
OF THE GAITHERSBURG CONTRACT, IT BEING THE INTENT AND AGREEMENT OF THE
PARTIES THAT PURCHASER'S AGGREGATE LIABILITY FOR LIQUIDATED DAMAGES
UNDER THIS AGREEMENT AND THE GAITHERSBURG CONTRACT SHALL NOT EXCEED
$3,152,680.00, INCLUDING ANY PORTION OF THE AGGREGATE DEPOSIT APPLIED
THERETO PURSUANT TO SECTION 10.3 HEREOF OR SECTION 10.3 OF THE
GAITHERSBURG CONTRACT), PLUS THE REASONABLE ATTORNEYS' FEES AND
EXPENSES INCURRED BY SELLER IN ENFORCING THIS AGREEMENT AND/OR THE
GAITHERSBURG CONTRACT AGAINST PURCHASER IN RESPECT OF PURCHASER'S
DEFAULT.
--------------------------------- ------------------------------
PURCHASER'S INITIALS SELLER'S INITIALS
--------------------------------- ------------------------------
/s/ CBS /s/ TJG
CNL HOSPITALITY TOWNEPLACE MANAGEMENT
PARTNERS, LP CORPORATION
/s/ TJG
RESIDENCE INN BY MARRIOTT, INC.
/s/ TJG
MARRIOTT INTERNATIONAL, INC.
--------------------------------- ------------------------------
It is understood and agreed that for purposes of this Section
10.2, if a default results from a false representation or warranty,
such default shall be deemed cured if the events, conditions, acts or
omissions giving rise to the falsehood are cured within the applicable
cure period even though, as a technical matter, such representation or
warranty was false as of the date actually made.
10.3 Purchaser's Deposit. In order to secure Purchaser's
performance hereunder, including, without limitation, its obligation to
pay liquidated damages as provided in Section 10.2, Purchaser has
heretofore provided, or will provide immediately upon the execution and
delivery of this Agreement, a Two Million Three Hundred Ninety-One
Thousand Nine Hundred Fifty Dollars ($2,391,950) cash deposit (said
deposit is herein referred to as the "Deposit") to the Escrow Agent.
The Escrow Agent shall hold and disburse the Deposit pursuant to the
terms of the Escrow Agreement entered into among Seller, Purchaser and
Escrow Agent of even date herewith, a true copy of which is attached
hereto as Schedule P (the "Escrow Agreement"). The Deposit together
with the "Deposit" under the Gaithersburg Contract is herein referred
to as the "Aggregate Deposit."
If Purchaser defaults on its obligations hereunder such that
Seller becomes entitled to liquidated damages as provided in Section
10.2, Seller shall be immediately entitled to the entire Aggregate
Deposit to be applied to such liquidated damages. If Purchaser elects
to terminate this Agreement in respect of a Property pursuant to
Sections 2.3, 2.4, 2.5, 2.7 or 8.4, or if Seller elects to terminate
this Agreement pursuant to the provisions of Section 3.5 or 3.6, or if
either party elects to terminate this Agreement pursuant to Section
3.1, Purchaser shall be entitled to the prompt return of the portion of
the Deposit allocable to the affected Property (as provided below) and
the parties shall so direct the Escrow Agent to pay such portion to
Purchaser and thereupon shall have no further obligations hereunder in
respect of such Property except any obligations which expressly survive
a termination of this Agreement. In the event Seller becomes entitled
to the Aggregate Deposit, including the Deposit hereunder, the Escrow
Agent shall promptly disburse the Aggregate Deposit, including the
Deposit, to Seller in the manner provided for in the Escrow Agreement.
The Aggregate Deposit shall be held by Escrow Agent in an
interest-bearing account and Escrow Agent shall be authorized to
deliver the interest accrued thereon from time to time to Purchaser.
Upon the occurrence of Closing in respect of a given Property, the
Escrow Agent shall return to the Purchaser that portion of the Deposit
allocable to the Property being closed upon. For purposes hereof, the
Deposit shall be allocated among the Properties as follows: Residence
Inn, Mira Mesa, California, $771,150; Residence Inn, Merrifield,
Virginia, $940,800; TownePlace Suites, Newark, California, $680,000.
Any portion of the Deposit not applied to liquidated damages and/or
reasonable attorneys' fees and expenses pursuant to Section 10.2., or
previously returned to Purchaser pursuant to the terms hereof will be
returned to Purchaser promptly following the occurrence of the Closing
of all three (3) Properties hereunder."
(d) "Exhibit B" (captioned "Other Leases") of "Schedule C"
(captioned "Lease") of the Original Agreement shall be deleted in its entirety
and, in lieu thereof, the "Exhibit B" attached hereto as Exhibit A shall be
inserted.
(e) "Schedule D" (captioned "Limited Rent Guaranty") of the
Original Agreement shall be deleted in its entirety and, in lieu thereof, the
"Schedule D" attached hereto as Exhibit B shall be inserted.
4. Counterparts. This First Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5. Governing Law. This First Amendment shall be interpreted, construed,
applied and enforced in accordance with the laws of the State of Maryland. To
the maximum extent permitted by applicable law, any action to enforce, arising
out of, or relating in any way to, any of the provisions of this First Amendment
may be brought and prosecuted in such court or courts located in the State of
Maryland as is provided by law; and the parties consent to the jurisdiction of
said court or courts located in the State of Maryland and to service of process
by registered mail, return receipt requested, or by any other manner provided by
law.
6. Section and Other Headings. The headings contained in this First
Amendment are for reference purposes only and shall not in any way affect the
meaning or interpretation of this First Amendment.
7. Entire Agreement. This First Amendment contains and embodies the
entire agreement of the parties hereto, and no representations, inducements, or
agreements, oral or otherwise, not contained in this First Amendment shall be of
any force or effect. This First Amendment may not be modified or changed in
whole or in part in any manner other than by an instrument in writing duly
signed by the parties hereto. Except as modified by this First Amendment, the
terms and provisions of the Original Agreement, which are incorporated herein by
this reference, are hereby reaffirmed and shall be binding upon the parties
hereto.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties have caused this First Amendment to be
executed as a sealed instrument as of the date first above written.
SELLERS:
TOWNEPLACE MANAGEMENT CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
RESIDENCE INN BY MARRIOTT, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
PURCHASER:
CNL HOSPITALITY PARTNERS, LP
By: CNL Hospitality GP Corp.,
a Delaware corporation its general
partner
By: /s/ C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Vice President of Finance and
Administration
MI:
MARRIOTT INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Authorized Signatory
The undersigned, CNL Hospitality Properties, Inc., joins herein for the purpose
of evidencing its consent to the amendment of the Original Agreement pursuant to
this First Amendment and to reaffirm its obligations with respect to the
Guaranty of Landlord's Obligations entered into or to be entered into pursuant
to the terms of the Original Agreement.
CNL HOSPITALITY PROPERTIES, INC.
By: /s/ C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
C. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Vice President of Finance and
Administration
The undersigned, First American Title Insurance Company, joins herein
for the purpose of evidencing its obligations under the Escrow Agreement, as the
same may be amended.
FIRST AMERICAN TITLE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇. Deal
Name: ▇▇▇▇▇ ▇. Deal
Title: Vice President