THIRD AMENDMENT TO AGREEMENT
OF SALE AND PURCHASE
THIS Third Amendment TO AGREEMENT OF SALE AND PURCHASE (this "Third
Amendment") is between AUBURN EQUITY PARTNERS, an Ohio general partnership
("Seller"), and HOST FUNDING, INC., a Maryland corporation or its permitted
assignee ("Purchaser"), and is dated effective as of September 20, 1997.
R E C I T A L S
A. Seller and Purchaser previously entered into that certain Agreement
of Sale and Purchase (the "Agreement") dated effective as of May 5, 1997, as
amended by that certain Amendment to Agreement of Sale and Purchase (the
"First Amendment") dated effective as of June 19, 1997, and as further
amended by that certain Second Amendment to Agreement of Sale and Purchase
(the "Second Amendment") dated effective as of July 28, 1997 (collectively,
as amended by the First Amendment and the Second Amendment, the "Agreement"),
and relating to the sale by Seller to Purchaser of real property located in
Auburn, Dekalb County, Indiana, and more particularly described in Exhibit
"A" attached hereto and incorporated herein by reference for all purposes
(the "Property").
B. Seller and Purchaser desire to further amend the Agreement in
certain respects as provided herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller and Purchaser hereby
agree as follows:
1. Notwithstanding anything contained in this Agreement to the
Contrary, Section 1.1 of the Agreement is hereby amended by the deletion
therefrom of the definition of "Host Funding Stock Fair Market Value" in its
entirety.
2. Notwithstanding anything contained in the Agreement to the contrary,
the Agreement is hereby amended by the deletion therefrom of Section 3.1 in
its entirety, and in substitution therefor, the following Section 3.1 added:
3.1 PURCHASE PRICE. The purchase price ("Purchase Price") for the
Property shall be TWO MILLION NINE HUNDRED FOURTEEN THOUSAND FIVE HUNDRED
AND NO/100 DOLLARS ($2,914,500.00). The Purchase Price shall be payable at
Closing as follows:
(a) Subject to adjustment pursuant to various applicable provisions
of this Agreement requiring adjustment of same, the sum of FOUR HUNDRED
THOUSAND AND NO/100 DOLLARS ($400,000.00) in cash or other immediately
available funds (the "Cash Portion of the Purchase Price");
(b) Purchaser's assumption, with limited liability, and otherwise
pursuant to the terms and conditions set forth in Section 3.2 hereof, of a
loan (the "Nomura Loan") evidenced by that certain Promissory Note (the
"Nomura Note") in the original principal sum of $1,809,000.00, dated July
31, 1996, executed by Seller, payable to the order of Continental Xxxxxxx
Associates, Inc., and thereafter assigned to Nomura Asset Capital
Corporation (Nomura Asset Capital Corporation, or the current record holder
of the Nomura Loan, as applicable, is hereinafter referred to as "Nomura");
(c) Subject to the provisions of Section 7.4 hereof, Purchaser's
delivery or issuance to Seller of 26,940 shares of the Class A Common Stock
of Host Funding, Inc. (the "Host Funding Stock") having an approximate
aggregate value equal to TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($250,000.00). The Host Funding Stock will be deemed a "restricted
security" under the Securities Act in that such stock will be delivered or
issued to Seller in a transaction not involving a public offering. Seller
understands that the Host Funding Stock may not be resold without
compliance with the registration requirements of the Securities Act or in
other certain limited circumstances. In this connection, Seller
understands the resale limitations imposed by the Securities Act and is
familiar with SEC Rules 144 and 145, as presently in effect, and the
conditions which must be met in order for Rules 144 and 145 to be available
for resale of "restricted securities". Each certificate representing Host
Funding Stock will contain the appropriate legend relating to restrictions
on sale and transfer under the Securities Act and the Exchange Act.
Notwithstanding the foregoing, Purchaser agrees that Seller may distribute
the Host Funding Stock to Seller's partners and to Seller's Broker (and
Seller's Broker may distribute same to its participating brokers) without
requirement of legal opinion; provided, however, that (i) each recipient
thereof shall have executed and delivered to Seller and Purchaser an
Investment Letter Agreement with respect thereto and (ii) Purchaser shall
determine within its sole discretion that such transfer will not disqualify
Purchaser as a Real Estate Investment Trust under the Internal Revenue Code
of 1986, as amended; and
(d) Purchaser's execution and delivery to Seller of a promissory note
(the "Seller Finance Note") in the original principal amount equal to the
remainder of the Purchase Price (Purchase Price LESS Cash Portion of the
Purchase Price LESS the actual principal balance of the Nomura Note on the
Closing Date LESS the $250,000.00 in value of the Host Funding Stock EQUALS
the original principal amount of the Seller Finance Note). The Seller
Finance Note shall accrue interest commencing January 1, 1998, at the rate
equal to the Wall Street Journal Prime Rate plus one percent (1%);
provided, if not paid when due, the interest rate shall increase to the
Wall Street Journal Prime Rate plus ten percent (10%). The principal of
the Seller Finance Note, together with all accrued interest thereon, shall
be due and payable on April 1, 1998, such sums payable all in cash. The
Seller Finance Note will be secured by the pledge of 38,340 shares of the
Class B Common Stock of Host Funding, Inc. (the "Seller Finance Stock
Pledge"), and shall be guaranteed by Host Funding, Inc. (the "Host
Guaranty"). The Seller Finance Note, the Seller Finance Stock Pledge, and
the Host Guaranty shall be upon such other terms and conditions as Seller
and Purchaser may reasonably and mutually agree in writing prior to the
Closing.
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3. Notwithstanding anything contained in the Agreement to the contrary,
the Agreement is hereby amended by the deletion therefrom of Section 3.2(c)
in its entirety.
4. The Agreement is hereby amended by the deletion therefrom of the
amendments to same contained in Paragraph 1 of the Second Amendment, and, in
substitution therefor, the following added:
Notwithstanding anything contained in the Agreement to the
contrary, the Agreement is hereby amended by the deletion
therefrom of Section 6.1, except for the last two (2)
sentences thereof, and, the Deposit shall be immediately
delivered to Seller by the Title Company (and Purchaser
hereby authorizes the Title Company to do so) and shall
hereafter be considered non-refundable, unless, however, (a)
Seller hereafter defaults on any of its obligations or
breaches any of the representations and warranties of Seller
under the Agreement, or (b) Nomura does not on or before
October 15, 1997, through no fault of Purchaser, close the
assumption by Purchaser of the Nomura Loan. For the
purposes hereof, the phrase "through no fault of Purchaser"
contained in the immediately preceding sentence shall mean
Purchaser shall, on or before October 15, 1997, have
furnished to Nomura any and all applications, forms,
information and due diligence items and documentation
reasonably required of it by Nomura, and otherwise provided
to Nomura comments to any proposed assumption documents
submitted to it by Nomura for Purchaser's comments and
approvals. At the closing of the transaction contemplated
by the Agreement, the cash portion of the Deposit shall be
paid and applied against the Cash Portion of the Purchase
Price, and the stock portion of the Deposit shall be applied
and used as part of the Host Funding Stock (and with any
dividends paid to Seller on such stock portion of the
Deposit prior to said closing to be applied against the Cash
Portion of the Purchase Price).
5. Notwithstanding anything contained in the Agreement to the contrary,
Section 3.3(b) of the Agreement is hereby amended to provide that any
dividends paid to Seller on the stock portion of the Deposit prior to the
Closing of the transaction contemplated by the Agreement shall become part of
the Deposit.
6. Notwithstanding anything contained in the Agreement to the contrary,
Section 11.1 of the Agreement is hereby amended to provide that the
transaction contemplated by the Agreement will be closed no later than
October 15, 1997, unless otherwise approved in writing by Seller and
Purchaser.
7. Notwithstanding anything contained in the Agreement to the contrary,
Section 12.2 of the Agreement is hereby amended by the addition of the
following Purchaser deliveries:
(f) the Seller Finance Note;
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(g) the Seller Finance Stock Pledge; and
(h) the Host Guaranty.
8. Notwithstanding anything contained in this Amendment or in the
Agreement to the contrary, the Agreement is hereby amended by the deletion
therefrom of Section 19.3 in its entirety.
9. Except as expressly amended herein, the Agreement remains unchanged,
and the valid and binding obligation of Seller and Purchaser. Capitalized
terms used herein and not otherwise defined shall have the meanings assigned
thereto in the Agreement. This Third Amendment shall be effective upon
execution by facsimile transmission by both parties.
SELLER:
AUBURN EQUITY PARTNERS, an Ohio general
partnership
By: Investment Resources, Inc., an Ohio
corporation, Managing Partner
By: /s/ XXXXXX XXXXX
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Name: XXXXXX XXXXX
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Title: PRESIDENT
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PURCHASER:
HOST FUNDING, INC., a Maryland corporation
By: /s/ BONA X. XXXXX
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Bona X. Xxxxx, Vice President
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