EXHIBIT 10.2
FIFTH AMENDMENT TO PURCHASE-SALE AND OPTION AGREEMENT
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THIS FIFTH AMENDMENT TO PURCHASE-SALE AND OPTION AGREEMENT (this
"Amendment") is entered into as of this 26th day of February, 1996, by and
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between HMH PROPERTIES, INC., a Delaware corporation (the "Seller"), and
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HOSPITALITY PROPERTIES TRUST, a Maryland real estate investment trust and the
successor by merger to Hospitality Properties, Inc. (the "Purchaser").
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W I T N E S S E T H :
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WHEREAS, pursuant to a Purchase-Sale and Option Agreement, dated as of
February 3, 1995, as amended by letter agreements dated February 28, 1995, April
7, 1995 and May 5, 1995 and by Fourth Amendment to Purchase-Sale and Option
Agreement, dated as of June 19, 1995 (as so amended, the "Purchase Agreement"),
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the Seller and HMH Courtyard Properties, Inc., a Delaware corporation ("HMH
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Courtyard") agreed to sell certain properties and grant certain options to the
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Purchaser, all subject to and upon the terms and conditions set forth in the
Purchase Agreement; and
WHEREAS, HMH Courtyard has been merged into the Seller and the Seller is
the successor in interest to HMH Courtyard by reason of such merger; and
WHEREAS, the Seller and the Purchaser now wish to amend certain terms and
conditions of the Purchase Agreement;
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, the Seller and the Purchaser
hereby agree as follows:
1. Capitalized terms used and not otherwise defined in this Amendment
shall have the meanings ascribed to such terms in the Purchase Agreement. As
used herein, the term "Other Agreement" shall mean that certain Purchase, Sale
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and Exchange Agreement, dated as of the date hereof, by and between the
Purchaser and the Seller.
2. The Purchase Price for the Schedule D Properties shall be One Hundred
Seventy-Six Million Four Hundred Thousand Dollars ($176,400,000).
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3. Payment of the Purchase Price for the Group D Properties shall be made
as follows:
$ 50,000,000 aggregate deposit pursuant to this Agreement and the Other
Agreement.
$158,760,000 the non-contingent balance of the Purchase Price for the
Group D Properties, less any portion of the Deposit plus
interest accrued thereon as provided in the Other Agreement
allocated to the Group D Properties, will be paid at the
closing of the Group D Properties, which will occur
simultaneously with the closing under the Other Agreement.
$ 17,640,000 the Option Retained Funds with respect to the Purchase Price
for the Group D Properties will be paid as provided in the
Purchase Agreement and the Leases.
4. Schedule D of the Purchase Agreement is hereby amended to delete the
reference to "Chicago/Wabash Ave." therefrom, change the total number of units
listed thereon to "2,299" and change the Purchase Price to "$176,400,000".
5. The obligations of the Purchaser to acquire the Group D Properties
shall be subject to the following additional conditions precedent:
(a) The Closing (as defined therein) under the Other Agreement shall occur
simultaneously;
(b) The initial term pursuant to the Leases for the Group D Properties and
pursuant to all existing Leases shall be extended through December 31, 2012;
(c) The Leases with respect to the Group D Properties shall provide and the
existing Leases shall be amended to provide the Tenant with three consecutive
twelve (12) year renewal terms exercisable on two (2) years' notice and
otherwise in accordance with the existing terms and conditions of the existing
Leases;
(d) The Tenant and the Purchaser shall enter into an amendment to the
existing Leases, in form and substance reasonably satisfactory to the Purchaser
and Tenant, with respect to the matters described in paragraphs (b) and (c)
above and also (x) amending Exhibit A to each of the Leases to include all of
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the Properties (y) confirming the obligation of any mortgagee of the landlord
under the Leases to provide copies of notices of default to the Tenant and (z)
confirming that, under any Leases
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with respect to Properties located in California, the landlord's mortgagees
shall be subject to the disbursement obligations of the landlord thereunder in
the event of casualty damage resulting from earthquake;
(e) The initial term of the Management Agreements pursuant to the
Management Agreements for the Group D Properties and pursuant to all existing
Management Agreements shall be extended through December 31, 2012;
(f) The Management Agreements with respect to the Group D Properties and
the existing Management Agreements shall be further amended (x) to provide for
three (3) consecutive twelve (12) year renewal terms, (y) to require the Manager
to obtain and provide to the Purchaser such financial information and other data
as may be required by securities registration and reporting laws, regulations
and rules of the Securities and Exchange Commission applicable to the Purchaser,
including, but not limited to, providing an allocated breakdown of operating
costs of the Properties, permitting the Purchaser to publish such information
and/or incorporate by reference into the Purchaser's public filings the public
information filed by Marriott International, Inc. and generally requiring the
Manager and Marriott International, Inc. to cooperate with the Purchaser in
complying with the requirements of the Securities and Exchange Commission, and
(z) to permit the Purchaser to obtain secured financing with respect to all of
the Courtyard Properties owned by the Purchaser in an amount of up to sixty
percent (60%) of the consolidated Priority Basis of all such Properties (as such
term is defined in the Management Agreements); and
(g) The Manager and the Purchaser shall enter into an amendment to the
Management Agreements, in form and substance reasonably satisfactory to the
Purchaser and the Manager, with respect to the matters described in paragraphs
(e) and (f) above.
6. The obligations of the Seller to sell the Group D Properties shall be
subject to the following additional condition precedents:
(a) The Closing (as defined therein) under the Other Agreement shall occur
simultaneously; and
(b) The Purchaser shall have paid to the Seller the sums described in
paragraph 7 below.
7. At the closing of the Group D Properties, the Purchaser shall pay to
the Seller the sum of Two Million Five Hundred Thousand Dollars ($2,500,000),
whereupon, the First Offer Period shall be extended through December 30, 2010.
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8. (a) In the event, notwithstanding diligent and good faith efforts, the
Seller shall be unable to obtain the approval of the Boards of Directors of the
Seller to the transactions contemplated by this Amendment, this Amendment may be
terminated by the Seller by the giving of written notice thereof to the
Purchaser within five (5) Business Days after the date of this Amendment; it
being expressly understood and agreed that time shall be of the essence with
respect to the giving of such notice. If the Seller shall give such notice to
the Purchaser within the time period hereinabove provided, this Amendment shall
terminate and be of no further force or effect and the Seller shall refund the
Deposit to the Purchaser, together with interest thereon, in accordance with
Section 10.1 of the Other Agreement. If the Seller shall fail to give such
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notice within the time period and in the manner hereinabove provided, the Seller
shall have no further right to terminate this Amendment pursuant to this
section.
(b) In the event, notwithstanding diligent and good faith efforts, the
Purchaser shall be unable to obtain the approval of the Board of Directors of
the Purchaser to the transactions contemplated by this Amendment, this Amendment
may be terminated by the Purchaser by the giving of written notice thereof to
the Seller within five (5) Business Days after the date of this Amendment; it
being expressly understood and agreed that time shall be of the essence with
respect to the giving of such notice. If the Purchaser shall give such notice
to the Seller within the time period hereinabove provided, this Amendment shall
terminate and be of no further force or effect and the Seller shall refund the
Deposit to the Purchaser, together with interest thereon, in accordance with
Section 10.1 of the Other Agreement. If the Purchaser shall fail to give such
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notice within the time period and in the manner hereinabove provided, the
Purchaser shall have no further right to terminate this Amendment pursuant to
this section.
9. The Purchase Agreement is hereby further amended by inserting therein
the following as Section 12 thereof:
SECTION 12. EXCHANGE CONTRACT MATTERS.
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12.1 Exchanges. The Seller desires to effectuate and the Purchaser
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agrees to cooperate in effectuating eight (8) separate tax deferred exchanges of
Exchange Properties for the Exchange Parcels on the terms and conditions set
forth in this Agreement.
12.2 Exchange Property Credit. In connection with the consummation of
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any Exchange Closing, the Purchaser shall direct that all or any portion of the
Allocable Purchase Price of the applicable Exchange Property equal to the
Exchange Value be applied to the acquisition of the applicable Exchange Parcel
or
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held in escrow by the Title Company for such purpose pursuant to Section 12.13
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(each such designated amount, an "Exchange Property Credit"). The Purchaser
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shall be obligated (subject to the terms hereof) to expend cash in an amount not
to exceed the Exchange Property Credit to acquire and convey to the Seller
pursuant to Exchange Contracts such Exchange Parcels as the Seller may
designate. Any Exchange Property Credit shall, from time to time, be reduced by
any payments made in connection with the acquisition of the applicable Exchange
Parcels. The Title Company shall disburse, at the direction of the Purchaser
and the Seller, the unapplied portion of any applicable Exchange Property Credit
as may from time to time be required to pay amounts then due under the
applicable Exchange Contract. Notwithstanding the foregoing, if the Seller
notifies the Purchaser in writing at least five (5) days prior to the Closing
Date or Exchange Closing Date that it has elected not to designate any Exchange
Parcels, the Exchange Value shall be paid to the Seller on such Exchange Closing
Date as herein described.
12.3 Designation of Exchange Parcels.
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(a) The Seller may from time to time after the date of this Agreement but,
in any event, no later than forty-five (45) days after the Closing Date,
designate one or more parcels of real property as Exchange Parcels, which
Exchange Parcels the Purchaser shall acquire and transfer to the Seller, in
exchange for the Exchange Properties, upon the terms and subject to the
conditions of this Agreement. The Seller shall be unconditionally obligated to
accept any Exchange Parcel acquired by the Purchaser pursuant to the terms of
this Agreement.
(b) In the event that the Seller does not designate any Exchange Parcels
on or before the day within forty-five (45) days after the Closing Date, or if
the Exchange Property Credit has not been reduced to zero on or before the Final
Exchange Closing Date, the provisions of Section 12.11 shall apply.
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12.4 Exchange Contracts.
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(a) At the request of the Seller and subject to all of the applicable
terms and conditions of this Agreement, the Purchaser shall, upon 5 days' prior
notice from the Seller, execute and deliver a purchase and sale agreement or an
assignment and assumption agreement of the Seller's interest under any purchase
and sale agreement, in either case, for the acquisition of one or more Exchange
Parcels (any such purchase and sale agreement or assignment thereof, an
"Exchange Contract"), it being expressly understood and agreed, however, that
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the Purchaser's obligation to execute or accept assignment of any Exchange
Contract shall be subject to the conditions that:
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(i) Pursuant to the terms of such Exchange Contract, the closing
thereunder shall be scheduled to occur within one hundred eighty
(180) days after the Closing Date;
(ii) The aggregate amount of payments required to be made under or in
connection with such Exchange Contract, as reasonably estimated by
the Purchaser, shall not exceed the unapplied portion of the
applicable Exchange Property Credit, unless the Seller shall provide
the Purchaser with such assurances regarding the payment of such
amounts by the Seller as the Purchaser shall require;
(iii) The Purchaser shall have no rights or obligations under such
Exchange Contract, monetary or nonmonetary, including, without
limitation, the performance of any due diligence or the giving of
any notices, other than the payment of amounts less than or equal to
the unapplied portion of the applicable Exchange Property Credit;
(iv) Such Exchange Contract shall permit the Purchaser to designate the
Seller as the Purchaser's designee or nominee to receive title to
the Exchange Parcel to be conveyed thereunder (the Seller agreeing
to accept such title); and
(v) The Purchaser shall be under no duty or obligation to find or assist
the Seller in finding or selecting Exchange Parcels suitable for
exchange or negotiating its purchase and the Purchaser shall have no
responsibility for the failure of the purchase of any Exchange
Parcel to be closed or settled by the Exchange Closing Date other
than by reason of the Purchaser's willful failure to perform its
obligations under this Agreement.
(b) It is further expressly understood and agreed that anything herein to
the contrary notwithstanding, the Purchaser shall have no obligation to
participate in any exchange contemplated by this Agreement if such exchange
would or reasonably could (as determined by the Purchaser's legal counsel)
result in (i) the recognition of any gain by the Purchaser, (ii) a tax basis in
any Property lower than the tax basis therein that the Purchaser would have had
such Property been sold to the Purchaser for an amount equal to the Allocable
Purchase Price (subject to adjustment as provided in this Agreement) as
contemplated by this Agreement other than the provisions in this Section 12, or
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(iii) any other federal or state income tax consequences different from those
that would have resulted had
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such Property been sold to the Purchaser for an amount equal to the Allocable
Purchase Price (subject to adjustment as provided in this Agreement) as
contemplated by this Agreement other than the provisions in this Section 12.
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12.5 Conveyance of Exchange Parcels. At the time of any Exchange
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Closing, title to the applicable Exchange Parcel shall be conveyed directly to
the Seller as the nominee and designee of the Purchaser and the Seller shall
accept such title as shall be conveyed thereunder; it being expressly understood
and agreed that the Purchaser makes no representations, warranties or covenants
with respect to such title, the satisfaction of any conditions precedent under
any Exchange Contract or any other matter in regard or pertaining thereto.
12.6 Failure of Exchange Parcels to Close. At any time upon the request
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of the Seller, the Purchaser shall assign any Exchange Contract to the Seller
(without representation or warranty other than that the Purchaser has not
created any liens or encumbrances thereon, such assignment to be made on the
date specified in the Seller's notice (but not less than 3 days after the giving
of such notice). The Purchaser shall have a unilateral right to assign any
Exchange Contracts to the Seller at any time after the date one hundred eighty-
one (181) days after the Closing Date.
12.7 Assignment Upon Exhaustion of Credit. At such time as the
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applicable Exchange Property Credit shall be reduced to zero, the Purchaser
shall assign (unless sooner assigned to the Seller as herein provided) the
Exchange Contract to the Seller (without representation or warranty other than
that the Purchaser has not created any liens or encumbrances thereon). Upon
assignment of an Exchange Contract to the Seller, the Purchaser shall have no
further obligations hereunder with respect to the applicable Exchange Parcels or
Exchange Contract.
12.8 Closing Period. Purchaser shall not be obligated to participate in
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any Exchange Closing prior to the Closing Date or after the date which is one
hundred eighty (180) days after the Closing Date.
12.9 Reductions to Exchange Property Credit. The applicable Exchange
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Value and the Purchase Price payable under this Agreement shall be reduced from
time to time by (a) the aggregate cash consideration paid by the Purchaser under
any Exchange Contract, (b) any costs and expenses incurred by or on behalf of
Purchaser in connection with any Exchange Parcel, (c) the amount of any claim or
indemnity owing to the Purchaser by or at the direction of the Seller pursuant
to this Agreement, (d) the amount of any consideration paid by the Purchaser to
the Seller pursuant to this Agreement and (e) the costs and expenses
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incurred in good faith by or on behalf of the Purchaser in connection with the
proposed acquisition of an Exchange Parcel, whether or not an Exchange Contract
is executed in connection therewith and whether or not the proposed transaction
is consummated.
12.10 Increases to Exchange Property Credit. Regardless of the actual
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interest earned thereon, there shall be credited to the Exchange Property Credit
an amount equal to the interest which would be earned on the amount of such
credit outstanding from time to time if it had been deposited with the Title
Company earning interest equivalent to the Federal Reserve Bank Discount Rate.
12.11 Final Exchange Closing Date. On a Final Exchange Closing Date, the
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Title Company shall pay to the Seller an amount equal to the then remaining
balance of the Exchange Property Credit, if any, less any payments, if any, then
due and unpaid by the Seller to the Purchaser pursuant to this Agreement. Upon
such payment, and upon payment of any other sums then due by any party to
another party pursuant to this Agreement, such Exchange Contract shall be
finally closed and no party shall have any further rights or obligations
pursuant thereto, except as otherwise provided herein. Any excess balance in
the escrow account then held by Escrow Agent shall be returned to Purchaser.
12.12 Indemnification. The Seller acknowledges that the Purchaser is
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agreeing to enter into each Exchange Contract and to acquire Exchange Parcels
solely as an accommodation to the Seller and that it is not intended that the
Purchaser will incur any costs or liabilities with respect to the Exchange
Parcels or any Exchange Contract in carrying out its obligations pursuant to
this Agreement. Accordingly, the Seller hereby agrees to indemnify, defend and
hold the Purchaser and its successors and assigns harmless from, against and in
respect of, and shall on demand reimburse the Purchaser and its successors and
assigns for, any and all loss, liability, damage or expense arising out of or in
any way connected with the exchanges contemplated by this Section 12, any
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Exchange Contract or the Exchange Parcels. The provisions of this Section 12.12
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shall survive the Closing and the Exchange Closings.
12.13 Escrow Provision. The Title Company shall establish eight (8)
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separate interest-bearing escrow accounts, one for each Exchange Parcels. The
Exchange Property Credit shall be held by the Title Company, in trust, in
accordance with the following terms and conditions:
(a) The Title Company, shall not be liable to any party for holding the
Exchange Property Credit in escrow in accordance with the provisions of this
Section 12.13 in the event of any
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contested claims by either party relating to any Exchange Contract.
(b) The Title Company shall deliver the Exchange Property Credit, and any
interest earned thereon, to the Purchaser or the Seller, as the case may be,
upon the following conditions:
(i) To the Purchaser, any amount remaining in the escrow account on
the Final Exchange Closing Date in excess of the remaining
Exchange Property Credit balance.
(ii) To the Seller, upon receipt of a written notice from the Seller
stating that the Seller is entitled under this Agreement to the
Exchange Property Credit and demanding payment of the same;
provided, however, that the Title Company will not honor such
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demand until not less than ten (10) days after the date on
which the Title Company shall have given such notice to the
Purchaser of such demand, nor thereafter if, prior to or during
such ten (10) day period, the Title Company shall have received
written notice of objection from the Purchaser.
(iii) To the Purchaser, upon receipt of a written notice from the
Purchaser stating that the Purchaser is entitled under this
Agreement to the return of the Exchange Property Credit and
demanding return of the same; provided, however, that the Title
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Company will not honor such demand until not less than ten (10)
days after the date on which the Title Company shall have given
notice to the Seller of such demand, nor thereafter if prior to
or during such ten (10) day period, the Title Company shall
have received written notice of objection from the Seller.
(c) Any notice to the Title Company shall be sufficient only if received
by the Title Company within the applicable time periods set forth herein. All
mailings and notices to and from the Title Company shall be sent as provided in
Section 11.5.
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(d) If the Title Company shall receive a written demand for the Exchange
Property Credit or written notice of objection to the return of the Exchange
Property Credit or if there is any disagreement or dispute shall arise between
or among any of the parties hereto and/or any other persons resulting in adverse
claims and demands being made for the Exchange Property Credit, whether or not
litigation has been instituted, the Title Company shall continue to hold the
Exchange Property Credit subject to
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such adverse claims and the Title Company shall not be or become liable in any
way or to any person for its refusal to comply with such claims or demand and
(i) in the event of any joint direction from the Seller and the Purchaser, the
Title Company shall then disburse the Exchange Property Credit in accordance
with said direction, (ii) in the event the Title Company shall receive a written
notice advising that a litigation over entitlement to the Exchange Property
Credit has been commenced, the Title Company may deposit the Exchange Property
Credit with the clerk of the court in which said litigation is pending or (iii)
the Title Company may (but shall not be required to) take such affirmative steps
as it may, at its option, elect in order to substitute another impartial party
satisfactory to the Seller and the Purchaser to hold the Exchange Property
Credit subject to such adverse claims including the commencement of an action
for interpleader in a court of competent jurisdiction, the cost thereof to be
borne by whichever of the Seller and the Purchaser is the losing party and,
thereupon, the Title Company shall be released of and from all liability
hereunder. The Seller and the Purchaser jointly and severally agree to
reimburse the Title Company for any and all expenses incurred in the discharge
of its duties under this Article, including, without limitation, attorneys'
fees. Nothing herein, however, shall affect the liability of a defaulting party
to another party for reimbursement of any amount paid to the Title Company under
this Section 12.13(d).
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(e) It is expressly understood that the Title Company acts hereunder as an
accommodation to the Seller and the Purchaser and as a depository only and is
not responsible or liable in any manner whatever for the sufficiency,
correctness, genuineness or validity of any instrument deposited with it, or for
the form or execution of such instruments or for the identity, authority or
right of any person executing or depositing the same, or for the terms and
conditions of any instrument pursuant to which the Title Company or the parties
may act.
(f) The Title Company shall not have any duties or responsibilities except
those set forth in this Section and shall not incur any liability in acting upon
any signature, notice, request, waiver, consent, receipt or other paper or
document believed by the Title Company to be genuine and the Title Company may
assume that any person purporting to give it any notice on behalf of any party
in accordance with the provisions hereof has been duly authorized to do so.
(g) The Title Company may act or refrain from acting in respect of any
matter referred to herein in full reliance upon and by and with the advice of
counsel which may be selected by it and shall be fully protected in so acting or
refraining from acting upon the advice of such counsel.
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(h) The Title Company shall not be responsible for any act or failure to
act on its part except in the case of its own willful default or gross
negligence. The Title Company shall be automatically released from all
responsibility and liability under this Agreement upon the Title Company's
delivery or deposit of the Exchange Property Credit in accordance with the
provisions of this Agreement.
(i) The Seller and the Purchaser agree that if either shall deliver to the
Title Company a written demand for the Exchange Property Credit, the party
making such demand shall, promptly after delivering such demand to the Title
Company, deliver a copy of such demand to the other party, together with a
statement of the facts and circumstances underlying the demand; provided,
however, that nothing in this part shall have any effect whatsoever upon the
Title Company's rights, duties and obligations under the preceding parts of this
Section 12.
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Definitions. As used in this Section 12, the following terms shall have
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the meanings set forth below.
(a) "Exchange Closing" shall mean the consummation of the transactions
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contemplated by and Exchange Contract.
(b) "Exchange Closing Date" shall mean the date on which any Exchange
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Closing shall occur.
(c) "Exchange Properties" shall mean the following Properties:
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Williamsburg
Miami Lakes
Quad Cities
Newport Middletown
Pittsburgh Airport
Jacksonville/Mayo
Syracuse
Willow Grove
(d) "Exchange Parcels" shall have mean the parcels of real estate to be
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designated by the Seller.
(e) "Exchange Value" shall mean, with respect to any Exchange Property,
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the Allocable Purchase Price of such Property.
(f) "Exchange Contract" shall have the meaning given such term in Section
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12.4(a).
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(g) "Final Exchange Closing Date" shall mean, with respect to any Exchange
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Closing, the first Business Day following the Exchange Closing Date; provided,
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however, that in no event shall
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the Final Exchange Closing Date occur later than one hundred eighty (180) days
after the Closing Date unless the parties agree otherwise; provided, further,
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however, that, in the event that the Seller does not designate any Exchange
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Parcel on or before the day which is forty-five (45) days after the Closing
Date, the Final Exchange Closing Date shall be the fifth Business Day following
the expiration of such forty-five (45) day period unless the parties otherwise
agree.
10. As amended hereby, the Purchase Agreement is ratified and confirmed
and declared to be in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment under
seal as of the date above first written.
SELLER:
HMH PROPERTIES, INC.
By: /s/ X.X. Xxxxx
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Its: Vice President
By: X.X. Xxxxxx
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Its: Assistant Secretary
HOSPITALITY PROPERTIES TRUST
By: /s/ Xxxx X. Xxxxxx
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Its: Treasurer
ACKNOWLEDGED AND AGREED:
HOST MARRIOTT CORPORATION
By: /s/ Xxxxxx X. Xxxxx
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Its: Assistant Secretary
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