EXHIBIT 10.18.4
FOURTH AMENDMENT TO AGREEMENT OF PURCHASE AND SALE
THIS FOURTH AMENDMENT TO AGREEMENT OF PURCHASE AND SALE (this
"AMENDMENT") is made as of the 2nd day of September, 2004, by and between
ASHFORD HOSPITALITY LIMITED PARTNERSHIP, a Delaware limited partnership
("PURCHASER"), and DUNN FAMILY ASSOCIATES, LLP, an Indiana limited liability
partnership, as the sole Beneficiary with sole management and control under that
certain Land Trust Agreement dated July 16, 1990, HOTEL INVESTMENT, LLC, an
Indiana limited liability company, ENCORE HOTELS OF BLOOMINGTON, INC., an
Indiana corporation, ENCORE HOTELS OF TERRE HAUTE, LLC, an Indiana limited
liability company, ENCORE RESIDENTIAL HOTELS OF EVANSVILLE, LLC, an Indiana
limited liability company, ENCORE HOTELS OF COLUMBUS, LLC, an Indiana limited
liability company, ENCORE HOTELS OF HORSE CAVE, LLC, a Kentucky limited
liability company, ENCORE HOTELS OF PRINCETON II, LLC, an Indiana limited
liability company, and DUNN HOSPITALITY GROUP, LLC, an Indiana limited liability
company (collectively, "SELLER").
RECITALS
A. Seller and Purchaser have entered into that certain Agreement of
Purchase and Sale dated as of May 19, 2004, as amended by that certain First
Amendment to Agreement of Purchase and Sale dated July 1, 2004 that certain
Second Amendment to Agreement of Purchase and Sale dated July 23, 2004, and that
certain Third Amendment to Agreement of Purchase and Sale dated August 4, 2004,
executed by Purchaser and Seller (collectively, the "PURCHASE AGREEMENT"), which
provides, among other things, for the Purchaser's purchase of the Property from
the Seller.
B. Seller and Purchaser wish to modify and amend the Purchase Agreement
(as amended, the "AGREEMENT") as hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants provided
herein and for other good and valuable consideration, the receipt and
sufficiency of which Seller and Purchaser hereby acknowledge, Seller and
Purchaser hereby agree as follows:
1. Definitions. Capitalized terms not otherwise defined in this
Amendment shall have the meanings given to them in the Agreement. The following
definitions are added and incorporated into Section 1.1 of the Agreement:
"COMMON STOCK" has the meaning given such term in the attached Exhibit
1 (Registration Rights Agreement).
"COMPANY" shall mean Ashford Hospitality Trust, Inc., a Maryland
corporation.
"DUNN APPROVED TRANSFEREE" has the meaning given such term in the
attached Exhibit 2 (Partnership Amendment).
"GUARANTY" shall mean the Guaranty as defined in the Third Amendment
to Agreement of Purchase and Sale.
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"PARTNERSHIP AGREEMENT" shall mean the Second Amended and Restated
Agreement of Limited Partnership of Purchaser, as the same has been and may be
amended from time to time.
"PLEDGE AGREEMENT" shall mean have the meaning ascribed to such term in
the Third Amendment to Agreement of Purchase and Sale.
"REGISTRATION RIGHTS AGREEMENT" shall mean the Registration Rights
Agreement attached hereto as Exhibit 1.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"UNIT RECIPIENT" shall mean any Seller who shall acquire and have any
Unit issued to it by Purchaser pursuant to this Agreement.
"UNITS" shall mean "COMMON PARTNERSHIP UNITS" in Purchaser, as defined
and described in the Partnership Agreement.
2. Subsection 2.2(b) of the Agreement is hereby revised and amended to
insert the following as the last sentence of such Subsection:
"The percentage of the total amount of Units issued
pursuant to this Agreement as allocated to each Unit Recipient
is set forth on Schedule 1 attached hereto."
3. ARTICLE III of the Agreement is hereby revised to add a new Section
3.31 as follows:
"3.31 Investment Representations and Warranties. Each
Unit Recipient represents, warrants and covenants as follows:
(a) Unit Recipient is an `ACCREDITED INVESTOR' within
the meaning of Rule 501(a) promulgated under the Securities
Act, and understands the risks of, and other considerations
relating to, the purchase of the Units. Unit Recipient, by
reason of its business and financial experience, together with
the business and financial experience of those persons, if
any, retained by it to represent or advise it with respect to
its investment in the Units, (i) has such knowledge,
sophistication and experience in financial and business
matters and in making investment decisions of this type, (ii)
is capable of evaluating the merits and risks of an investment
in Purchaser and of making an informed investment decision,
(iii) is capable of protecting its own interest or has engaged
representatives or advisors to assist it in protecting its
interests and (iv) is capable of bearing the economic risk of
such investment.
(b) The Units to be issued to Unit Recipient will be
acquired by Unit Recipient for its own account for investment
only and not with a view to, or with any intention of, a
distribution or resale thereof, in whole or in part, or the
grant of any participation therein, other than the potential
distribution of the Units to the
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respective partners or members of Unit Recipient, as
applicable, following the expiration of the lock-up period
provided in Section 6.15 of this Agreement.
(c) Unit Recipient acknowledges that (i) the Units to
be issued to Unit Recipient have not been registered under the
Securities Act or state securities laws by reason of a
specific exemption or exemptions from registration under the
Securities Act and applicable state securities laws, (ii)
Purchaser's reliance on such exemptions is predicated in part
on the accuracy and completeness of the representations and
warranties of Unit Recipient contained herein, (iii) such
Units, therefore, cannot be resold unless registered under the
Securities Act and applicable state securities laws (unless an
exemption from registration is available), (iv) there is no
public market for such Units, and (v) Purchaser has no
obligation or intention to register such Units for resale
under the Securities Act or any state securities laws or to
take any action that would make available any exemption from
the registration requirements of such laws. Unit Recipient
hereby acknowledges that because of the restrictions on
transfer or assignment of such Units to be issued hereunder
(such restrictions on transfer or assignment being set forth
in this Agreement and the Partnership Agreement), Unit
Recipient may have to bear the economic risk of the investment
commitment evidenced by this Agreement and any Units purchased
hereby for an indefinite period of time, although (x) Units
may be redeemed at the request of the holder thereof for cash
or (at the option of the general partner of Purchaser) for
Common Stock of Company pursuant to the terms of the
Partnership Agreement (which redemption rights may be limited
or modified pursuant to the terms of the Partnership
Agreement) and (y) Company and Unit Recipient will execute and
deliver a Registration Rights Agreement in the form attached
hereto as Exhibit 1.
(d) The address set forth for Unit Recipient in this
Agreement is the address of the Unit Recipient's principal
place of business or residence, as applicable, and Unit
Recipient has no present intention of becoming a resident of
any country, state or jurisdiction other than the country and
state in which such principal place of business or residence,
as applicable, is sited."
4. ARTICLE IV of the Agreement is hereby revised to add a new Section
4.6 as follows:
"4.6 Issuance of Units. Capitalized terms used in
this Section 4.6 and not otherwise defined shall have the
meaning given such terms in the Partnership Agreement.
(a) The Partnership Agreement shall be amended
effective with the Closing Date in the form attached hereto as
Exhibit 2 (the `PARTNERSHIP AMENDMENT'), to provide for the
issuance of the Units to Unit Recipients as provided herein.
The Units to be issued in connection with the transactions
herein contemplated have been, or prior to the Closing Date
will have been, duly authorized for issuance by Purchaser to
Unit Recipients and, on the Closing Date,
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will be validly issued. The rights and obligations of Unit
holders will be as set forth in the Partnership Agreement,
provided that, after the expiration of the lock-up period as
provided in Section 6.15 of this Agreement and the Lock-Up
Agreement, a Transfer of the Units by Unit Recipients to any
Dunn Approved Transferee shall be excepted from the
restrictions of Subsections 9.5(a) and 9.6(a)(i) of the
Partnership Agreement.
(b) With respect to the transfer of Units by Unit
Recipients to any Dunn Approved Transferee after the lock-out
period as contemplated by Subsection 4.6(a) of this Agreement,
the parties further agree that the provisions relating to a
`Transfer' in Section 9.5 and Section 9.6 of the Partnership
Agreement will be deemed to have been satisfied or discharged
as to any such Transfer to such Dunn Approved Transferee upon
the following:
(i) such Dunn Approved Transferee completes, executes and
delivers to the Partnership the Subscriber
Questionnaire in the form attached hereto as Exhibit
3;
(ii) such Dunn Approved Transferee executes and delivers
to the Partnership the Power of Attorney and Limited
Partner Signature Page in the form attached hereto as
Exhibit 4;
(iii) such Dunn Approved Transferee executes and delivers
to the Partnership a letter in the form of Exhibit 6
attached hereto, containing the representations,
warranties, and agreement set forth in Section 3.31;
(iv) such Dunn Approved Transferee executes and delivers
to Company the signature page to the Registration
Rights Agreement, the form of which is attached
hereto as Exhibit 1;
(v) such Dunn Approved Transferee is an `accredited
investor' within the meaning of Rule 501 of the
Securities Act, as evidenced by the Subscriber
Questionnaire; and
(vi) the Partnership shall not have received an opinion
from legal counsel that there has been a change in
the Securities Act or any applicable federal or state
securities or `Blue Sky' law, (including investment
suitability standards) which would require
registration under the Securities Act of the Units
being transferred to the Dunn Approved Transferee."
5. ARTICLE V of the Agreement is hereby revised to add a new Subsection
5.1(o) as follows:
"(o) Offering of Units. There shall have been no change in any
securities or related law or interpretation, nor any change in Seller's
status as an `accredited investor' under the Securities Act that would
render the consummation of the conveyance of the
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Property for Units, as contemplated by this Agreement, a violation of
any such laws or interpretations thereof."
6. ARTICLE VI of the Agreement is hereby revised as follows:
a. A new Section 6.10 is added as follows:
"6.10 Prospective Subscriber Questionnaire. Each Unit
Recipient shall deliver to Purchaser, at or prior to the expiration of
the Study Period, a Prospective Subscriber Questionnaire with respect
to such Unit Recipient in substantially the form attached hereto and
made a part hereof as Exhibit 3. Each Unit Recipient shall also deliver
to Purchaser, upon Purchaser's reasonable request, such other
information, certificates and materials as Purchaser may reasonably
request in connection with offering the Units without registration
under the Securities Act and the securities laws of applicable states
and other jurisdictions."
b. A new Section 6.11 is added as follows:
"6.11 Delivery of Tax Information. In connection with the
issuance of Units to Unit Recipients, each Unit Recipient shall deliver
to Purchaser no later than the Closing, at such Unit Recipient's sole
cost and expense, the following information in a form reasonably
determined by the Unit Recipients:
(a) depreciation and amortization schedules for all
assets constituting or otherwise included in such Unit
Recipient's respective Property (the `Assets'), as kept for
both book and tax purposes, showing original basis and
accumulated depreciation or amortization;
(b) basis information (computed for both book and tax
purposes, if different) for all non-depreciable,
non-amortizable Assets;
(c) the adjusted basis of such Unit Recipient's
respective partners or members, as the case may be, in the
Assets;
(d) calculations of the estimated amounts of gain to
be realized and recognized by such Unit Recipient's respective
partners or members, as the case may be, as a result of the
transactions contemplated by this Agreement, including the
disclosure of the method by which such amounts are calculated;
(e) breakouts of basis information for any other
balance sheet accounts of such Unit Recipient for which
information has not been provided pursuant to the other
clauses of this Section;
(f) the names and numbers of such Unit Recipient's
respective partners or members, as the case may be; and
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(g) for each of such Unit Recipient's respective
partners or members, as the case may be, that is a partnership
(or other entity treated as a partnership for federal income
tax purposes), S corporation or grantor trust (any of the
foregoing, a `LOOK-THROUGH ENTITY'), and for each look-through
entity that holds an indirect interest in such Unit Recipient
through other look-through entities, the names and numbers of
such entity's partners, shareholders or grantors."
c. A new Section 6.12 is added as follows:
"6.12 Cooperation on Tax Matters. In connection with the
issuance of Units to the Unit Recipients, each Unit Recipient shall
provide reasonable assistance to Company to enable Company to prepare
its tax returns. Each Unit Recipient shall deliver to Company copies of
its federal, state and local tax returns (including information
returns) for the tax year in which the Closing occurs, including any
amendments thereto, and each Unit Recipient shall notify Company, in
writing, of any audits of such returns, or of any audits for other tax
years that could affect the amounts shown on the returns, for the tax
year in which the Closing occurs. Copies of such returns shall be
provided to Company in draft form at least twenty (20) days before they
are filed and in final form upon filing. Each Unit Recipient shall also
provide to Company, promptly upon receipt, any notice that such Unit
Recipient receives from any of its respective partners or members, as
the case may be, that such partner or member intends to prepare its tax
returns in a manner inconsistent with the returns filed by such Unit
Recipient. The parties understand and agree that the tax returns filed
by each Unit Recipient will be substantially consistent with the
information provided to Company pursuant to this Agreement. The
provisions of this Section shall survive the Closing."
d. A new Section 6.13 is added as follows:
"6.13 Information Regarding the Restrictions on Beneficial
Ownership of Units. From the date of this Agreement until the Closing,
and then so long as a Unit Recipient holds any Units, such Unit
Recipient shall promptly provide Purchaser with written notice of any
change in the identity or number of its respective partners or members,
as the case may be (or of its indirect partners or members as
identified pursuant to this Agreement), and shall provide the
information called for in this Amendment with respect to any such
change. In addition, so long as a Unit Recipient holds any Units, any
such Unit Recipient shall not, without the prior written consent of
Purchaser: (i) admit additional partners or members, (ii) permit the
transfer of interests in such Unit Recipient to a look-through entity,
or (iii) permit any transfer of interests in such Unit Recipient if, as
a result of the admissions or transfers described in the foregoing (i)
through (iii), the number of direct or indirect beneficial owners in
such Unit Recipient would increase. Each Unit Recipient shall use its
best efforts to secure the compliance of any look-through entities that
hold direct or indirect interests in such Unit Recipient with the
requirements of this Section as if such requirements applied directly
to such entities. Each Unit Recipient acknowledges that the provisions
of this Section are imposed to aid Purchaser in avoiding taxation as a
corporation for federal income tax purposes, agrees that monetary
damages may be insufficient to remedy the potential harm caused by any
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breach of the provisions of this Section, and agrees that injunctive
relief, including specific performance or another equitable remedy
would be an appropriate remedy. The provisions of this Section shall
survive the Closing."
e. A new Section 6.14 is added as follows:
"6.14 Partnership Agreement. Each Unit Recipient agrees to be
bound by and subject to all of the terms of the Partnership Agreement,
including the grant of the Power of Attorney to the general partner of
the Partnership. At or prior to the Closing, each Unit Recipient shall
execute and deliver to Purchaser a Power of Attorney and Limited
Partner Signature Page in substantially the form attached hereto and
made a part hereof as Exhibit 4."
f. A new Section 6.15 is added as follows:
"6.15 Lock Up Agreement. Each Unit Recipient acknowledges and
agrees that all Units issued to it at Closing must be held by such Unit
Recipient for a period of one (1) year from the Closing Date with
respect to one-half (1/2) of the Units, and two (2) years with respect
to the remaining one-half (1/2) of the Units, and, during such period,
may not be assigned, pledged, sold or otherwise transferred in whole or
in part or subjected to any claim, lien, pledge, voting agreement,
option, charge, security interest, mortgage, deed of trust,
encumbrance, rights of assignment, purchase rights or rights of any
nature whatsoever of any third party. Accordingly, at or prior to the
Closing, each Unit Recipient shall execute and deliver to Purchaser a
Lock Up Agreement (the "LOCK UP AGREEMENT") in substantially the form
attached hereto and made a part hereof as Exhibit 5."
g. A new Section 6.16 is added as follows:
"6.16 Pledge Agreement. At the time of the execution of the
Guaranty, each Unit Recipient agrees to pledge its respective Units to
Purchaser as security for the Guaranty upon the terms and provisions as
set forth in the Pledge Agreement, in the form attached hereto and made
a part hereof as Exhibit 7, and accordingly each Unit Recipient shall
execute and deliver to Purchaser the Pledge Agreement at Closing or at
such later date that the Guaranty is executed."
h. A new Section 6.17 is added as follows:
"6.17 Guaranty. In the event of a Reimbursement Obligation,
Dunn Hospitality Group Manager, Inc. and John M. Dunn shall guarantee
payment of the Reimbursement Obligation to Purchaser, and any costs,
fees or other amounts arising in connection with such guarantee, in
accordance with and as provided and described in the Guaranty, in the
form attached hereto and made a part hereof as Exhibit 8 (the
"GUARANTY"), subject to the conditions set forth in the Guaranty and
Seller shall cause to be executed and delivered to Purchaser the
Guaranty at Closing or at such later date as the applicable parties
agree to the PIP Budget (as defined in the Guaranty)."
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i. The following sentence is added to the end of ARTICLE VI:
"The foregoing covenants of Seller and the Unit Recipients are
for the benefit of Purchaser and Company or any of their assignees of
their respective rights under this Agreement."
7. ARTICLE VII of the Agreement is revised as follows:
a. Section 7.2 is revised to change the Subparagraph (ll) to (rr) and
to add the following new Subsections 7.2(ll), 7.2(mm), 7.2(nn), 7.2(oo), 7.2(pp)
and 7.2(qq):
"7.2(ll) The Prospective Subscriber Questionnaire.
7.2(mm) The Lock-Up Agreement restricting transfer of Units.
7.2(nn) The Registration Rights Agreement.
7.2(oo) The Power of Attorney and Limited Partner Signature
Page
7.2(pp) The Pledge Agreement, if applicable in accordance with
Section 6.16.
7.2(qq) The Guaranty, if applicable in accordance with Section
6.17."
b. Section 7.3 is revised to change subparagraph (e) to (g) and to add
the following new Subsections 7.3(e) and 7.3(f):
"(e) To Unit Recipients, the Partnership Amendment
executed by the general partner of Purchaser.
(f) To Unit Recipients, the Registration Rights
Agreement executed by Company."
8. Conflicts. Except to the extent expressly modified by this
Amendment, the terms, provisions and conditions of the Agreement are hereby
ratified and confirmed and shall remain in full force and effect, unmodified by
the terms and provisions hereof and, in the event of any conflict between the
terms and provisions of the Agreement and this Amendment, the terms and
provisions of this Amendment shall be deemed controlling.
9. Counterparts. The parties hereto may execute this Amendment in one
or more identical counterparts, all of which when taken together will constitute
one and the same instrument. Copied or telecopied signatures may be attached
hereto and shall have the same binding and legal effect as original signatures.
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[signature page to Fourth Amendment to Agreement of Purchase and Sale]
IN WITNESS WHEREOF, Seller and Purchaser have caused this Amendment to
be executed effective as of the date first above written.
SELLER:
Seller: Dunn Hospitality Group, LLC
Purchaser: Ashford Louisville LP, d/b/a Ashford Louisville
Limited Partnership
Property Address: 819 Phillips Lane, Louisville, Kentucky 40209
Hotel: Courtyard Inn
DUNN HOSPITALITY GROUP, LLC
By: Dunn Hospitality Group Manager, Inc.,
Its Manager
/s/ JOHN M. DUNN
----------------
John M. Dunn, President
Seller: Encore Hotels of Bloomington, Inc.
Purchaser: Ashford Bloomington LP
Property Address: 310 South College Avenue, Bloomington, IN 47403
Hotel: Courtyard Inn
ENCORE HOTELS OF BLOOMINGTON, INC.
/s/ JOHN M. DUNN
----------------
John M. Dunn, President
Seller: Encore Hotels of Columbus, LLC
Purchaser: Ashford Tipton Lakes LP
Property Address: 3888 Mimosa Drive, Columbus, IN 47201
Hotel: Courtyard Inn
ENCORE HOTELS OF COLUMBUS, LLC
By: Dunn Hospitality Group Manager, Inc.,
its Manager
/s/ JOHN M. DUNN
----------------
John M. Dunn, President
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Seller: Encore Hotels of Horse Cave, LLC
Purchaser: Ashford Horse Cave Limited Partnership
Property Address: 750 Flintridge Road, Horse Cave, Kentucky 42749
Hotel: Hampton Inn
ENCORE HOTELS OF HORSE CAVE, LLC
By: Dunn Hospitality Group Manager, Inc.,
Its Manager
/s/ JOHN M. DUNN
----------------
John M. Dunn, President
Seller: Encore Hotels of Princeton II, LLC
Purchaser: Ashford Evansville II LP
Property Address: 2828 Dixon, Princeton, Indiana 47670
Hotel: Fairfield Inn
ENCORE HOTELS OF PRINCETON II, LLC
By: Dunn Hospitality Group Manager, Inc.,
Its Manager
/s/ JOHN M. DUNN
----------------
John M. Dunn, President
Seller: Encore Hotels of Terre Haute, LLC
Purchaser: Ashford Terre Haute LP
Property Address: 3325 U.S. 41 South, Terre Haute, Indiana 47802
Hotel: Hampton Inn
ENCORE HOTELS OF TERRE HAUTE, LLC
By: Dunn Hospitality Group Manager, Inc.,
Its Manager
/s/ JOHN M. DUNN
----------------
John M. Dunn, President
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Seller: Encore Residential Hotels of Evansville, LLC
Purchaser: Ashford Evansville III LP
Property Address: 8283 E. Walnut Street, Evansville, IN 47715
Hotel: Residence Inn
ENCORE RESIDENTIAL HOTELS OF EVANSVILLE,
LLC
By: Dunn Hospitality Group Manager, Inc.,
Its Manager
/s/ JOHN M. DUNN
----------------
John M. Dunn, President
Seller: Hotel Investment, LLC
Purchaser: Ashford Evansville II LP
Property Address: 5400 Weston Drive, Evansville, IN 47712
Hotel: Fairfield Inn
HOTEL INVESTMENT, LLC
By: Evansville Hotel Corporation,
its Manager
/s/ JOHN M. DUNN
----------------
John M. Dunn, President
Legal Owner: Fifth Third Bank as Successor Trustee by merger to
The Citizens National Bank of Evansville, IN as
Trustee Under Land Trust Agreement dated July 16,
1990
Purchaser: Ashford Evansville I LP
Property Address: 8000 Eagle Lake, Evansville, IN 47715
Hotel: Hampton Inn
DUNN FAMILY ASSOCIATES, LLP,
an Indiana limited liability partnership,
as Sole Beneficiary under Land
Trust Agreement dated July
16, 1990
By: /s/ JOHN M. DUNN
----------------
Name: John M. Dunn
As: Agent and Attorney-in-Fact for
Beneficiary and as General Partner
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PURCHASER:
ASHFORD HOSPITALITY LIMITED PARTNERSHIP,
a Delaware limited partnership
By: /s/ DAVID A. BROOKS
----------------------
Name: David A. Brooks
Title: Vice President
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