AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of this 3rd
day of February, 1997, by and between Host Funding, Inc., a Maryland corporation
(the "REIT"), HMR Capital, LLC, a Delaware Limited Liability Company (the
"Company"), and Host Funding Advisors, a Delaware corporation (the "Advisor")
with reference to the following facts:
(A) The Company currently serves as the REIT's exclusive acquisition agent
pursuant to a Post Formation Acquisition Agreement, as amended by the First
Amendment thereto (the "Acquisition Agreement"). In addition, the Company owns
100% of stock of Advisor. Advisor currently serves as the REIT's external
investment adviser pursuant to an Investment Advisory Agreement, as amended by
the First Amendment thereto (the "Advisory Agreement");
(B) The Parties wish to terminate the Advisory Agreement and to amend the
Acquisition Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
1. TERMINATION OF ADVISORY AGREEMENT
Pursuant to the terms of a Termination Agreement (attached hereto as
Attachment 1) effective as of the close of business on January 31, 1997 the
Advisor and REIT do hereby agree to terminate the Advisory Agreement and all
duties, obligations, and rights each party has or may have thereunder.
2. AMENDMENT OF ACQUISITION AGREEMENT
Effective as of the close of business on January 31, 1997 the Company and
REIT do hereby agree to amend the Acquisition Agreement as set forth in the
Restated and Amended Post-Formation Acquisition Agreement (attached hereto as
Attachment 2). As consideration for this amendment REIT agrees to issue to the
Company 225,000 Series A Warrants and 225,000 Series B Warrants in the form
attached hereto as Attachment 3 ("A" Warrants) and Attachment 4 ("B"
Warrants), respectively. For all federal and state tax purposes and for all
accounting purposes the Company and REIT stipulate and agree that the A Warrants
issued to the Company shall have a cash equivalent value of $50,000 and the B
Warrants shall have a cash equivalent value of $20,000. For federal and state
tax purposes the REIT agrees to assign a value of $70,000 to the aggregate
consideration paid to the Company for the amendment of the Acquisition Agreement
and the Company for federal and state tax purposes agrees to report said $70,000
stipulated value assigned to the consideration received for the amendment of the
Acquisition Agreement as ordinary income on its 1997 federal and state tax
returns. Company and REIT further agree not to maintain or take any position in
the future inconsistent with the stipulated values and the stipulated tax
treatment, each as described above.
3. EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original as against any party whose signature appears
thereupon, and all of which shall together constitute one and the same
instrument. This Agreement shall become binding when one or more counterparts
hereof, individually or taken together, shall bear the signatures of all of the
parties reflected hereon as the signatories.
This Agreement has been executed and delivered in the State of California
and is to be governed and construed according to the laws of that state.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first above written.
HOST FUNDING, INC.
/s/ Xxx X. Xxxxxxxx
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By: Xxx X. Xxxxxxxx, Chairman
HOST FUNDING ADVISORS, INC.
/s/ Xxx Xxxxxxx-Xxxxx
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By: Xxx Xxxxxxx-Xxxxx, President
HMR CAPITAL, LLC.
/s/ Xxx Xxxxxxx-Xxxxx
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By: Xxx Xxxxxxx-Xxxxx, Manager
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