<PAGE>
EXHIBIT 10
<TABLE>
<CAPTION>
NO. 96-CI-08327
<S> <C>
A. R. MILKES AND D. R. BURKLEW, IN THE DISTRICT COURT OF
on behalf of themselves and all other
limited partners of Courtyard by
Marriott II Limited Partnership
VS. BEXAR COUNTY, TEXAS
HOST MARRIOTT CORPORATION,
ET AL. 285th JUDICIAL DISTRICT
--------------------------
<CAPTION>
NO. 98-CI-04092
<S> <C>
ROBERT M. HAAS, SR., et al. IN THE DISTRICT COURT OF
Plaintiffs,
MURRAY F. WEISS, et al.
Plaintiff Intervenors,
VS. BEXAR COUNTY, TEXAS
MARRIOTT INTERNATIONAL,
INC., et al.
Defendants. 285TH JUDICIAL DISTRICT
</TABLE>
FIRST AMENDMENT TO THE SETTLEMENT AGREEMENT
Reference is made to the Settlement Agreement dated as of March 9, 2000
(the "Settlement Agreement"). Capitalized terms not otherwise defined herein
shall have the meanings ascribed to such terms in the Settlement Agreement.
Except as expressly provided herein, this First Amendment to the Settlement
Agreement (the "First Amendment") does not affect the Settlement Agreement. The
Settlement Agreement is amended as follows:
I. Section 1 of the Settlement Agreement is revised as follows:
A. Paragraph 1.20a is added as follows:
1.20a "CBM I LP Unitholders" means the members of the CBM I LP Class
certified by the Court holding 986 CBM I LP Units in the aggregate,
excluding, however, the Equity Intervenors, the Palm Intervenors and
the Insiders.
<PAGE>
B. Paragraph 1.42 is deleted in its entirety and replaced as follows:
1.42 "Effective Date" means, with respect to any given partnership,
the business day on which the Judgment Order as to such partnership
becomes Final. There may be more than one Effective Date depending
on the number of Judgment Orders entered by the Court.
C. Paragraph 1.59 is deleted in its entirety and replaced as follows:
1.59 "Judgment Order" means the judgment order or orders to be
rendered by the Court in the Milkes and Haas Litigations, or any
severed portions thereof, approving the fairness of the Settlement
(or any portions thereof), dismissing the Milkes and Haas
Litigations with prejudice (or any portions thereof), extinguishing
as to the applicable Released Persons, the applicable Released
Claims and permanently barring and enjoining such persons from
asserting such Released Claims, and addressing such other matters as
the Court deems necessary and appropriate.
D. Paragraph 1.62(a) is deleted in its entirety and replaced with the
following:
1.62(a) as to each Plaintiff, other than a CBM I LP Unitholder, the
pro-rata portion of the Settlement Amount due to such Plaintiff for
a particular partnership, less Plaintiffs' Counsel's Attorneys'
Fees; and reduced further by the amount, if any, such Plaintiff owes
on the purchase price of its unit.
E. Paragraph 1.62 is amended to add the following paragraph 1.62(e):
1.62(e) as to each of the CBM I LP Unitholders, provided that each
does not opt-out of the CBM I LP Settlement and is not in an overlap
position (and thereby able to convey the CBM I LP Unit and Release
all Released Claims), the pro-rata portion of the CBM I LP
Settlement Amount, including Interest accrued on the CBM I LP
Settlement Amount prior to the time it is paid to the Escrow Agent,
less Plaintiffs' Counsel's Requested CBM I LP Attorneys' Fees, such
that each such CBM I LP Unit receives a net recovery of $133,500.00
(or a reduced pro-rata amount for each half-CBM I LP Unit or other
fractional CBM I LP Unit); and further reduced by the amount, if
any, such CBM I LP Unitholder owes on the purchase price (the "CBM I
LP Net Settlement Amount").
F. Paragraph 1.69 is deleted in its entirety and replaced as follows:
1.69 "Plaintiffs' Counsel's Attorneys' Fees" means the attorneys'
fees and reimbursement of litigation costs and expenses awarded by
the Court to Plaintiffs' Counsel, which includes the attorneys' fees
provided for in paragraphs 1.69a and 1.69b, less $4.25 million, the
amount by which Plaintiffs' Counsel has agreed to reduce their
attorneys' fees pursuant to Paragraph 13.1 herein.
<PAGE>
G. Paragraph 1.69a is added as follows:
1.69a. "Plaintiffs' Counsel's Additional CBM I LP Attorneys' Fees"
means the attorneys' fees, interest and litigation expenses to be
paid by Host Marriott, Rockledge Hotel Properties, Inc. and Marriott
International to Plaintiffs' Counsel to reimburse Plaintiffs'
Counsel for the attorneys' fees, interest and litigation expenses
they would have sought from the Court as reflected in the August 3,
2000 CBM I LP Notice of the CBM I LP Settlement but for this First
Amendment and the CBM I LP Net Settlement Amount.
H. Paragraph 1.69b is added as follows:
1.69b. "Plaintiffs' Counsel's Requested CBM I LP Attorneys' Fees"
means the amount of attorneys' fees Plaintiffs' Counsel will request
be paid out of the CBM I Settlement Amount from the award of
attorneys' fees made by the Court on the CBM I LP Settlement to
effectuate the receipt by the CBM I LP Unitholders of the CBM I LP
Net Settlement Amount.
I. Paragraph 1.96 is deleted in its entirety and replaced as follows:
1.96 "Settlement Agreement" means the Settlement Agreement dated
March 9, 2000, as amended by the First Amendment, as it may be
further amended or modified from time to time.
J. Paragraph 1.96a is added as follows:
1.96a "First Amendment" means this First Amendment to the Settlement
Agreement dated September 25, 2000.
II. Section 2 of the Settlement Agreement is revised as follows:
A. Paragraph 2.1a is added as follows:
2.1a As part of the CBM I LP Settlement, and subject to the terms
and conditions contained herein and in the First Amendment, Host
Marriott, Rockledge Hotel Properties, Inc. and Marriott
International will pay or cause to be paid the Plaintiffs' Counsel's
Additional CBM I LP Attorneys' Fees.
III. Section 10 of the Settlement Agreement is revised as follows:
A. Paragraph 10.1 is amended to delete the following in its entirety:
10.1 If Defendants Counsel has not, within 120 days of the execution
of this Settlement Agreement, notified Plaintiffs' Counsel, Palm's
Counsel and Equity's Counsel that (i) such consents/permission have
been obtained; (ii) such consents/permission have been waived; or
(iii) such
<PAGE>
consents/permission cannot be obtained, then Plaintiffs' Counsel has
the option to notify Defendants' Counsel in writing that the
Settlement shall be null and void without cost or expense (including
Interest expense) to any party, and Palm's Counsel and/or Equity's
Counsel has the option to notify Defendants' Counsel in writing that
the Palm Intervenors and/or the Equity Intervenors (as the case may
be) withdraw from the Settlement without cost or expense (including
Interest expense) to any party; provided that such notice from
Plaintiffs' Counsel, Palm's Counsel and/or Equity's Counsel is sent
prior to notice being sent by Defendants' Counsel that the
consents/permission have been obtained or waived.
B. Paragraph 10.1(a) is added as follows:
10.1(a) If Defendants' Counsel has not, within 60 days of the
execution of this First Amendment, notified Plaintiffs' Counsel,
Palm's Counsel and Equity's Counsel that (i) such
consents/permission have been obtained; (ii) such
consents/permission have been waived; or (iii) such
consents/permission cannot be obtained, then Plaintiffs' Counsel has
the option to notify Defendants' Counsel in writing that the
Settlement shall be null and void without cost or expense (including
Interest expense) to any party, and Palm's Counsel and/or Equity's
Counsel has the option to notify Defendants' Counsel in writing that
the Palm Intervenors and/or the Equity Intervenors (as the case may
be) withdraw from the Settlement without cost or expense (including
Interest expense) to any party; provided that such notice from
Plaintiffs' Counsel, Palm's Counsel and/or Equity's Counsel is sent
prior to notice being sent by Defendants' Counsel that the
consents/permission have been obtained or waived; and provided
further that such right to cancel shall not apply to any part of the
Settlement for which a Judgment Order has been entered.
C. Paragraph 10.1(b) is added as follows:
10.1(b) For 60 days following the execution of the First Amendment,
Defendants will not unilaterally terminate the Settlement (or any
portion thereof) due solely to the failure, if any, to obtain the
consents/permission provided in Paragraph 10.1(a) - (c).
IV. Section 11 of the Settlement Agreement is revised as follows:
A. Paragraph 11.1 is amended as follows:
11.1 On or before the third business day following the entry by the
Court of any executed Judgment Order, the Joint Venture, Rockledge,
Host Marriott and Marriott International, or one or more of their
designees, shall pay or cause to be paid by wire transfer the
applicable portion of the Settlement Fund as it relates to the
Judgment Order (and the Plaintiffs' Counsel's Additional CBM I LP
Attorneys' Fees if the Judgment Order relates to CBM I LP), to the
Escrow Agent, which will be
<PAGE>
deposited by the Escrow Agent in an interest-bearing account
pursuant to the Escrow Agreement in substantially the form attached
as Exhibit H. In the event that the Judgment Order does not become
Final because an appeal or other review of the Judgment Order has
been filed, the Escrow Agent will return the portion of the
previously funded Settlement Fund and the Plaintiffs' Counsel's
Additional CBM I LP Attorneys' Fees, if previously funded, with
Interest, to the Joint Venture, Rockledge, Host Marriott and
Marriott International, in amounts as jointly instructed by these
four entities, by wire transfer, within two (2) business days after
the date the Escrow Agent receives documentation of such event. The
Joint Venture, Rockledge, Host Marriott and Marriott International
or one or more of their designees, will pay or cause to be paid by
wire transfer the applicable portion of the Settlement Fund and the
Plaintiffs' Counsel's Additional CBM I LP's Attorneys' Fees, if
applicable, back to the Escrow Agent within three (3) business days
after the order or judgment by the appellate court affirming the
Judgment Order with respect to the relevant partnership or
partnerships becomes Final.
B. Paragraph 11.3 is amended as follows:
11.3 The Escrow Agent shall not be authorized to distribute any
amount from the Settlement Fund or the Plaintiffs' Counsel's
Additional CBM I LP Attorneys' Fees to any Plaintiff, Palm
Intervenor, Equity Intervenor, Insider, or Plaintiffs' Counsel until
after the Effective Date with respect to the relevant partnership or
partnerships, and in accordance with the Plan of Allocation and the
Court's order with respect to the payment of Plaintiffs' Counsel's
Attorneys' Fees and reimbursement of expenses.
C. Paragraph 11.6 is amended as follows:
11.6 The Escrow Agent shall not use or disburse any funds from the
Settlement Fund or the Plaintiffs' Counsel's Additional CBM I LP
Attorneys' Fees except as provided for in this Settlement Agreement,
the First Amendment, the Escrow Agreement, as permitted by Order of
the Court or with the written consent of the Parties.
D. Paragraph 11.8 is amended as follows:
11.8 The Settlement Fund and the Plaintiffs' Counsel's Additional
CBM I LP Attorneys' Fees shall be deemed and considered to be in
custodia legis of the Court, and shall remain subject to the
jurisdiction of the Court, until such time as the Settlement Fund
shall be distributed pursuant to this Settlement Agreement and/or
further Order(s) of the Court.
<PAGE>
E. Paragraph 11.9 is amended as follows:
11.9 In the event that this Settlement Agreement (or any portion
thereof) is not approved, is terminated, canceled, or fails to
become effective for any reason, then none of the Joint Venture,
Rockledge, Host Marriott and Marriott International shall be under
any obligation to pay the applicable portion of the Settlement Fund
or the Plaintiffs' Counsel's Additional CBM I LP Attorneys' Fees (if
applicable). In the event that a Judgment Order with respect to any
partnership or partnerships does not become Final, or is reversed,
or substantially modified on appeal, then none of the Joint Venture,
Rockledge, Host Marriott and Marriott International shall be under
any obligation to repay to the Escrow Agent the portion of the
Settlement Fund applicable to such partnership or partnerships or
the Plaintiffs' Counsel's Additional CBM I LP Attorneys' Fees (if
such Judgment Order includes CBM I LP) and the Settlement Agreement
with respect to such partnership or partnerships shall be terminated
with the Joint Venture, Rockledge, Host Marriott and Marriott
International having no obligation to pay the portion of the
Settlement Fund applicable to such partnership or partnerships or
the Plaintiffs' Counsel's Additional CBM I LP Attorneys' Fees (if
such Judgment Order includes CBM I LP). In the event that the
Effective Date does not occur with respect any other partnership or
partnerships, the failure of an Effective Date to occur with respect
to any partnership or partnerships will not operate as a waiver of
any obligations or reduce any benefits that have accrued or occurred
as a result of the occurrence of the Effective Date with respect to
any other partnership or partnerships.
V. Section 12 of the Settlement Agreement is revised as follows:
A. Paragraph 12.1 is deleted in its entirety and replaced as follows:
12.1 The Escrow Agent, subject to the supervision, direction and
approval of the Court, and subject to all the terms and conditions
contained herein, shall administer and oversee the distribution of
the Settlement Fund to the Plaintiffs, Palm Intervenors, Equity
Intervenors, Insiders, and the Settlement Fund and the Plaintiffs'
Counsel's Additional CBM I LP Attorneys' Fees to Plaintiffs'
Counsel, pursuant to this Settlement Agreement, the First Amendment,
the Escrow Agreement and the Plan of Allocation approved by the
Court.
B. Paragraph 12.3 is deleted in its entirety and replaced as follows:
12.3 Seven (7) days after the Effective Date with respect to any
partnership or partnerships, the Escrow Agent will be authorized to
distribute from the Settlement Fund to Plaintiffs' Counsel
Plaintiffs' Counsel's Attorneys' Fees applicable to such partnership
or partnerships and, solely with respect to CBM I LP, Plaintiffs'
Counsel's Additional CBM I LP Attorneys' Fees.
<PAGE>
C. Paragraph 12.12 is deleted in its entirety and replaced as follows:
12.12 Any disputes concerning the identity of the proper Person(s)
to receive any or all of a Plaintiffs' Net Settlement Amount, and/or
the CBM I LP Net Settlement Amount, if not otherwise resolved, will
be finally determined by the Court. In the event of such a dispute,
the Escrow Agent will retain the Net Settlement Amount and/or the
CBM I LP Net Settlement Amount relating to such Person(s) in the
Settlement Fund until it receives a written order of the Court.
VI. Section 13 is amended as follows:
A. Paragraph 13.2 is added as follows:
13.2 The $4.25 million reduction in the Plaintiffs' Counsel's
Attorneys' Fees will be made in direct proportion to the amount of
Plaintiffs' Counsel's Attorneys' Fees awarded by the Court, such
that the total of the $4.25 million reduction will occur when all
applicable Plaintiffs' Counsel's Attorneys' Fees are awarded by the
Court in the Judgment Order.
VII. Section 14 of the Settlement Agreement is revised as follows:
A. Paragraph 14.4 is added as follows:
14.4 The parties agree that a Fairness Hearing may be held for the
Desert Springs LP Settlement, Fairfield Inn LP Settlement, Residence
Inn I LP Settlement and Residence Inn II LP Settlement separate and
apart from the Fairness Hearing to be held for the CBM I LP
Settlement and CBM II LP Settlement; that the Haas Litigation may be
severed; that a Judgment Order may be entered by the Court on the
Desert Springs LP Settlement, the Fairfield Inn LP Settlement, the
Residence Inn I LP Settlement and the Residence Inn II LP
Settlement; that funding of the Desert Springs LP Settlement Amount,
the Fairfield Inn LP Settlement Amount, the Residence Inn I LP
Settlement Amount and the Residence Inn II LP Settlement Amount will
occur on or before the third business day following the entry by the
Court of such executed Judgment Order; that such Judgment Order may
become Final; and that the Effective Date on the Desert Springs LP
Settlement, the Fairfield Inn LP Settlement, the Residence Inn I LP
Settlement and the Residence Inn II LP Settlement can occur; and
that distributions to the Desert Springs LP, Fairfield Inn LP,
Residence Inn I LP and Residence Inn II LP Class Members and
Plaintiffs' Counsel can occur as provided in the Settlement
Agreement but solely as they relate to the Desert Springs LP
Settlement, Fairfield Inn LP Settlement, Residence Inn I LP
Settlement and Residence Inn II LP Settlement.
<PAGE>
VIII. Section 15 of the Settlement Agreement is amended as follows:
A. Paragraphs 15.1 is deleted in its entirety and replaced as follows:
15.1 Plaintiffs' Counsel intend to submit an application or
applications (the "Fee and Expense Application") to the Court for an
award of Plaintiffs' Counsel's Attorneys' Fees. The amount of
attorneys' fees and litigation costs and expenses awarded by the
Court to Plaintiffs' Counsel shall be in the sole discretion of the
Court. Plaintiffs' Counsel will only seek from the CBM I LP
Settlement Amount the Plaintiffs' Counsel's Requested CBM I LP
Attorneys' Fees, it being the intent that the award of attorneys'
fees by the Court will be equal to the sum of the Plaintiffs'
Counsel's Requested CBM I LP Attorneys' Fees and the Plaintiffs'
Counsel's Additional CBM I LP Attorneys' Fees. Plaintiff's Counsel
agree that if their application for an award of attorneys' fees
relating to the settlement of CBM I LP is approved and the Judgment
Order (which includes CBM I LP) becomes Final, Plaintiffs' Counsel
will wire transfer to Wolf Haldenstein Adler Freeman & Herz, LLP
$1.6 million within two (2) business days from the date Plaintiffs'
Counsel receive their attorneys' fees related to CBM I LP
Settlement. Plaintiffs' Counsel further agree that the $1.6 million
shall be paid solely by Plaintiffs' Counsel, and not by the
Defendants, the CBM I LP Settlement Amount or the Settlement Fund.
B. Paragraph 15.2 is deleted in its entirety and replaced as follows:
15.2 Plaintiffs' Counsel agree that they will seek fees,
reimbursement of all litigation costs and expenses, and any other
costs and expenses solely from the Settlement Fund and from the
Plaintiffs' Counsel's Additional CBM I LP Attorneys' Fees and not
from the Defendants. In no event will Defendants be obligated or
required to pay any amount in excess of the total of the Settlement
Fund and the Plaintiffs' Counsel's Additional CBM I LP Attorneys'
Fees.
IX. Section 19 of the Settlement Agreement is amended as follows:
A. Paragraph 19.23 is added as follows:
19.23 The Parties hereto agree that the Defendants or their
designees may call or otherwise solicit consents from the CBM I LP
limited partners to effectuate the CBM I LP Settlement.
B. Paragraph 19.24 is added as follows:
19.24 The Parties hereto acknowledge and agree to the terms of the
letter agreement attached hereto and made a part hereof.
<PAGE>
C. Paragraph 19.25 is added as follows:
19.25 From and after the date of this First Amendment, all
references in the Settlement Agreement to the "Settlement Agreement"
shall refer to the Settlement Agreement as modified by the First
Amendment, and the First Amendment.
D. Paragraph 19.26 is added as follows:
19.26 The signatories to this First Amendment certify that they are
authorized to enter into and sign this First Amendment.
E. Paragraph 19.27 is added as follows:
19.27 The First Amendment may be executed in one or more
counterparts and by facsimile signatures. For each such document,
all executed counterparts and each of them shall be deemed to be one
and the same instrument. Plaintiffs' Counsel, Palm's Counsel,
Equity's Counsel and Defendants' Counsel shall exchange among
themselves original signed counterparts and a complete set of
original executed counterparts of this First Amendment shall be
filed with the Court.
F. Paragraph 19.28 is added as follows:
19.28 In entering this First Amendment, the Plaintiffs, the Palm
Intervenors and Equity Intervenors, by and through their counsel of
record in the Milkes and Haas Litigations, expressly acknowledge,
represent, warrant, covenant and agree that in entering into this
First Amendment, they are relying solely on their own independent
analysis, beliefs and judgment concerning the value of CBM I LP and
CBM II LP, and the value of the Released Claims in CBM I LP, CBM II
LP, Residence Inn I LP, Residence Inn II LP, Fairfield Inn LP and
Desert Springs LP, and expressly waive, disclaim, abandon and
relinquish any reliance (actual, perceived or otherwise) on any
Defendant in electing to consummate the transactions made the
subject of this First Amendment, other than as expressly contained
herein.
<PAGE>
AGREED TO THIS 23RD DAY OF SEPTEMBER, 2000.
BERG & ANDROPHY
By: /s/ David Berg
------------------------------
David Berg
3704 Travis
Houston, Texas 77002
(713) 529-5622 - telephone
(713) 529-3785 - facsimile
HACKERMAN, PETERSON, FRANKEL & MANELA, P.C.
By: /s/ Stephen M. Hackerman
------------------------------
Stephen M. Hackerman
1122 Bissonnet
Houston, Texas 77005
(713) 528-2500 - telephone
(713) 528-2509 - facsimile
JAMES R. MORIARTY & ASSOCIATES
By: /s/ James R. Moriarty
------------------------------
James R. Moriarty
1150 Bissonnet
Houston, Texas 77005
(713) 528-0700 - telephone
(713) 528-1390 - facsimile
YETTER & WARDEN, LLP
By: /s/ David E. Warden
------------------------------
David E. Warden
3800 Chase Tower, 600 Travis
Houston, Texas 77002
(713) 238-2002 - telephone
(713) 238-2002 - facsimile
ATTORNEYS FOR PLAINTIFFS
<PAGE>
CHESLOCK, DEELY & RAPP
By: /s/ J. Patrick Deely
-------------------------------
J. Patrick Deely
405 N. St. Mary's Street, Suite 600
San Antonio, Texas 78205
(210) 224-5008 - telephone
(210) 224-8470 - facsimile
ATTORNEYS FOR INTERVENORS,
EQUITY RESOURCE FUND X, EQUITY RESOURCE FUND XV, EQUITY RESOURCE FUND XVI,
EQUITY RESOURCE FUND XVII, EQUITY RESOURCE FUND XX, EQUITY RESOURCE FUND XXI,
EQUITY RESOURCE BAY FUND, EQUITY RESOURCE BRIDGE FUND, and EQUITY RESOURCE
PILGRIM FUND
GEORGE & DONALDSON, LLP
By: /s/ R. James George
-------------------------------
R. James George
1100 Norwood Tower
114 W. 7th Street
Austin, Texas 78701
(512) 495-1410 - telephone
(512) 499-0094 - facsimile
ATTORNEYS FOR INTERVENORS
PALM INVESTORS LLC
CUNNINGHAM, DARLOW, ZOOK & CHAPOTON, LLP
By: /s/ Debbie Darlow
--------------------------------
Debbie Darlow
1700 Chase Tower, 600 Travis
Houston, Texas 77002
(713) 255-5500 - telephone
(713) 255-5555 - facsimile
ATTORNEYS FOR DEFENDANTS,
HOST MARRIOTT CORPORATION, CBM ONE LLC
and HOST INTERNATIONAL, INC.
<PAGE>
WILLIAMS & CONNOLLY LLP
By: /s/ Kenneth Smurzynski
--------------------------------
Kenneth Smurzynski
725 Twelfth Street, N.W.
Washington, DC 20005
(202) 434-5000 - telephone
(202) 343-5029 - facsimile
JENKENS & GILCHRIST
By: /s/ Seagal V. Wheatley
--------------------------------
Seagal V. Wheatley
1800 Frost Bank Tower
100 W. Houston Street
San Antonio, Texas 78205
(210) 246-6500 - telephone
(210) 246-5999 - facsimile
ATTORNEYS FOR DEFENDANTS,
MARRIOTT INTERNATIONAL, INC. and
COURTYARD MANAGEMENT CORPORATION
MILBANK, TWEED, HADLEY & McCLOY, LLP
By: /s/ Richard C. Tufaro
--------------------------------
Richard C. Tufaro
1825 Eye Street, N.W., Suite 1100
Washington, D.C. 20006
(202) 835-7500 - telephone
(202) 835-7586 - facsimile
James L. Walker
Albon O. Head, Jr.
JACKSON & WALKER
112 E. Pecan St., Suite 2100
San Antonio, TX 78205
ATTORNEYS TO THE SPECIAL LITIGATION COMMITTEE
OF COURTYARD BY MARRIOTT LIMITED PARTNERSHIP
<PAGE>
NO. 98-CI-04092
ROBERT M. HAAS, SR., et al. | IN THE DISTRICT COURT OF
|
Plaintiffs, |
|
MURRAY F. WEISS, et al. |
|
Plaintiff Intervenors, |
VS. | BEXAR COUNTY, TEXAS
|
MARRIOTT INTERNATIONAL, |
INC., et al. |
|
Defendants. | 285th JUDICIAL DISTRICT
AGREEMENT CONCERNING COURTYARD BY MARRIOTT LIMITED
PARTNERSHIP ("CBM I LP")
------------------------
Reference is made to the Settlement Agreement dated as of March 9, 2000
(the "Settlement Agreement"). Capitalized terms not otherwise defined herein
shall have the meanings ascribed to such terms in the Settlement Agreement. This
is to confirm that the parties hereto have agreed as follows:
1. Notwithstanding anything in the Settlement Agreement to the contrary,
provided that all of the conditions to the consummation of the CBM I
LP Settlement have been satisfied or waived, holders of each of the
986 CBM I LP Units in the CBM I LP Class (who do not Opt-Out of the
Settlement and who are not in an overlap position and are thereby
able to convey their CBM I LP Unit and release all Released Claims,
and further, who do not owe on the purchase price of such unit) shall
receive a net recovery of $133,500 per unit, which amount includes
all interest earned on the portion of the Settlement Fund
attributable to the CBM I LP Units, but does not include any interest
that may be earned on the portion of the Settlement Fund attributable
to the CBM I LP Units after the Settlement Fund is deposited with the
Escrow Agent. The Net Settlement Amount with respect to the Palm
Intervenors, the Equity Intervenors and the Insiders shall remain as
currently provided in the Settlement Agreement.
2. To increase the net recovery provided in Section 1, Host Marriott
Corporation, Rockledge Hotel Properties, Inc. and Marriott
International, Inc. will request that the Plaintiffs' Counsel file
with the Texas Court a new attorneys' fee application related to the
CBM I LP Settlement which will enable Section 1 above to be
effectuated. Host Marriott Corporation, Rockledge Hotel Properties,
Inc. and Marriott International, Inc. will reimburse Plaintiffs'
Counsel for the attorneys' fees that they would have received
<PAGE>
on the CBM I LP Settlement but for Section 1, such amount to be agreed upon
by Host Marriott Corporation, Rockledge Hotel Properties, Inc., Marriott
International and Plaintiffs' Counsel.
3. Host Marriott Corporation, Rockledge Hotel Properties, Inc. and Marriott
International, Inc. will, at their sole cost and expense, file (or cause to
be filed) an amendment to the CBM I LP Purchase Offer/Consent Solicitation
Statement, and distribute (or cause to be distributed) a supplement to the
CBM I LP Purchase Offer/Consent Solicitation Statement to the CBM I LP
limited partners together with a duplicate ballot. The periods for the CBM
I LP purchase offer and the solicitation of consents of the CBM I LP
limited partners to the CBM I LP Merger and the CBM I LP Proposed
Partnership Agreement Amendments will be extended as deemed necessary by
Host Marriott Corporation, Rockledge Hotel Properties, Inc. and Marriott
International, Inc., after communication with the CBM I LP Partners'
Committee.
4. Marvin Schick and the CBM I LP Partners' Committee have determined that the
CBM I LP Settlement, as revised herein, is fair, reasonable and in the best
interests of the CBM I LP limited partners. Marvin Schick agrees to
actively support the CBM I LP Settlement, which will include, but will not
be limited to, voting his and the RJJ School's CBM I LP Units in favor of
the CBM I LP Merger and the CBM I LP Proposed Partnership Agreement
Amendments, tendering his and the RJJ School's CBM I LP Units in the
purchase offer, encouraging holders of CBM I LP Units to vote their CBM I
LP Units in favor of the CBM I LP Merger and the CBM I LP Proposed
Partnership Agreement Amendments and tender their CBM I LP Units in the
purchase offer, responding to calls from the CBM I LP limited partners in a
manner which supports the CBM I LP Settlement, and sending letters to the
CBM I LP limited partners in support of the CBM I LP Settlement. Host
Marriott Corporation, Rockledge Hotel Properties, Inc. and Marriott
International, Inc. will pay the cost of reproducing and mailing any such
written communications.
5. The parties hereto agree that the Defendants or their designees may call or
otherwise solicit consents from the CBM I LP limited partners.
6. Host Marriott Corporation, Rockledge Hotel Properties, Inc. and Marriott
International, Inc. will pay $100,000, as an expense reimbursement, to the
CBM I LP Partners' Committee at the time the portion of the Settlement Fund
allocable to CBM I LP is deposited with the Escrow Agent.
7. CBM I LP Unitholders may forward any comments they have concerning the
appraisal of the CBM I LP portfolio to the appraisers appointed to perform
such appraisals in accordance with the CBM I LP Purchase Offer/Consent
Solicitation Statement.
8. All counsel fees and expenses incurred by or on behalf of Wolf Haldenstein
Adler Freeman & Herz LLP, shall be paid solely by Plaintiffs' Counsel and
not from the
<PAGE>
Defendants, the CBM I LP Settlement Amount or the Settlement Fund, each
of which is released from any liability therefor.
9. The CBM I LP Partners' Committee, its members and its counsel agree that
they will not object to the CBM I LP Settlement and will not appeal the
Judgment Order.
10. The limited partners of CBM I LP may send to Gemisys until 10 days
before the Effective Date of the CBM I LP Settlement an assignment of
their beneficial interest in their CBM I LP Unit(s) directing that all
proceeds from the CBM I LP Settlement be assigned and paid to any
charitable institution, family member, family trust or such other person
or entity which does not constitute a sale of the CBM I LP Units.
11. Mr. Schick and his counsel agree that in any communications with the
press, they will convey support for the Settlement Agreement.
12. The General Partner of CBM I LP shall designate Ms. Andrea Jacob to act
as the liaison with the CBM I LP Partners' Committee to address any
issues relating to the Settlement that may arise. The General Partner of
CBM I LP makes no representations or warranties concerning the
resolution of any such issues.
13. The parties acknowledge that the agreements set forth in Sections 1 and
2 of this letter agreement will be discussed with the Securities and
Exchange Commission. The parties agree to negotiate in good faith to
modify the agreements set forth in Sections 1 and 2 to accommodate or
incorporate any modifications required by the Securities and Exchange
Commission. In the event that (i) the parties cannot agree on
appropriate modifications to the agreements set forth in Sections 1 and
2 to accommodate or incorporate any modifications required by the
Securities and Exchange Commission or (ii) the Securities and Exchange
Commission does not approve of the agreements set forth in Sections 1
and 2 of this letter agreement (as currently drafted or as modified by
the parties in response to the Securities and Exchange Commission's
comments), this entire letter agreement shall be of no further force or
effect.
14. This Agreement shall become null and void and of no further force or
affect if the CBM I LP Settlement is not consummated.
15. This Agreement is expressly conditioned upon the agreement of all the
parties to the Settlement Agreement on appropriate amendments to the
Settlement Agreement.
16. Except as set forth herein, this Agreement does not affect the
Settlement Agreement.
17. This Agreement may be executed in one or more counterparts and by
facsimile signatures.
<PAGE>
AGREED TO THIS 22nd DAY OF SEPTEMBER, 2000
WOLF HALDENSTEIN ADLER FREEMAN & HERZ, LLP
By: /s/ Lawrence P. Kolker
----------------------
Lawrence P. Kolker
270 Madison Avenue
New York, New York 10016
(212) 545-4600 - telephone
(212) 545-4653 - telecopier
By: /s/ Marvin Schick
----------------------
Marvin Schick, Individually and as the
Representative of the Ad Hoc CBM I
Partners' Committee
MARRIOTT INTERNATIONAL, INC.
By: /s/ R.S. Hoffman
----------------------
Its: Senior Vice President
----------------------
HOST MARRIOTT CORPORATION
By: /s/ C.G. Townsend
----------------------
Its: Senior VP
----------------------
CBM ONE LLC
By: /s/ C.G. Townsend
----------------------
Its: Executive VP
----------------------
ROCKLEDGE HOTEL PROPERTIES, INC.
By: /s/ C.G. Townsend
----------------------
Its: Vice President
----------------------
