EXHIBIT 10.18.3
THIRD AMENDMENT TO AGREEMENT OF PURCHASE AND SALE
THIS THIRD AMENDMENT TO AGREEMENT OF PURCHASE AND SALE (this "AMENDMENT")
is made as of the 4th day of August, 2004, by and between ASHFORD HOSPITALITY
LIMITED PARTNERSHIP, a Delaware limited partnership ("PURCHASER"), and DUNN
FAMILY ASSOCIATES, LLP, an Indiana limited liability partnership, 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 HOTEL 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 l, 2004 and that certain
Second Amendment to Agreement of Purchase and Sale dated July 23, 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.
2. Purchase Price. The definition of "Purchase Price" is hereby amended
and restated to be as follows:
"Purchase Price" shall mean $62,000,000.00 payable in the manner described
in Section 2.2 hereof.
3. Common Partnership Units.
(a) At Closing, Purchaser shall issue to Seller a number of "Common
Partnership Units" (as defined and described in the agreement of limited
partnership of Purchaser) in Purchaser equal to the quotient (rounded to the
nearest whole number) resulting from $3,000,000.00 divided by Nine and No/100ths
Dollars ($9.00).
(b) Subsection 2.2(b) of the Agreement is hereby amended to insert
the following sentence at the beginning of such paragraph: "Purchaser shall
receive a credit against the Purchase Price in an amount equal to $3,000,000.00,
which is the aggregate value of the Common Partnership Units to be issued to
Seller."
4. Manager. Pursuant to Section 5.1(m) of the Agreement, Purchaser hereby
elects that Dunn Hospitality Dunn Hospitality Group Manager, Inc. ("Manager")
manage the Property pursuant to the New Management Agreements.
5. PIP Requirements. Section 7.8 of the Agreement is hereby deleted.
Manager shall manage the performance and completion of the product improvement
plan requirements imposed by the Franchisor under the Franchise Agreements in
connection with the contemplated change in ownership of the Property (the
"PIPS"). Manager shall be entitled to receive a Ten Percent (10%) project
management fee based on the cost of the PIPS. Manager agrees to pay for the
aggregate cost to complete the PIPs that exceeds an amount equal to the
difference between the budgeted amount for the completion of the PIPS to be
agreed to by Purchaser and Manager (the maximum amount of which is currently
estimated to be $6,500,000.00 exclusive of the project management fee) (the "PIP
Budget") less the cost of any item in the PIPS that may be waived or deferred by
the applicable Franchisor after agreement to the PIP Budget (the "PIP Excess"),
and Manager agrees to indemnify and reimburse Purchaser and its Affiliates for
any costs or expenses incurred by Purchaser or any of its Affiliates which
constitute payment of all or any part of the PIP Excess (the "Reimbursement
Obligation"). Manager and John M. Dunn shall jointly and severally guarantee the
payment of the PIP Excess and the Reimbursement Obligation (the "Guaranty"). The
Guaranty is subject to approval by the parties to the PIP Budget. Seller,
Manager and Purchaser shall use good faith commercially efforts to agree to the
PIP Budget prior to Closing, upon which the Reimbursement Obligation shall be
based, or after Closing pursuant to the approval terms applicable to budgets
contained in the New Management Agreement. The Guaranty shall be secured by a
pledge by Seller of the Common Partnership Units issued to Seller at Closing
("Pledge Agreement"). Additionally, the parties agree that to the extent of any
Reimbursement Obligation, Ashford TRS Lessee LLC, as "owner" under the New
Management Agreements, may offset such Reimbursement Obligation against any
management fees otherwise due and owing to Manager under the New Management
Agreements. The provisions of this Paragraph 5 shall survive the Closing.
6. Study Period. Seller and Purchaser agree that the Study Period has
expired on the date hereof.
7. Repairs. Manager, at its sole cost and expense, shall complete the
repairs to the Property described on Exhibit A attached hereto within the time
frames set forth for the completion of the applicable PIPs. The provisions of
this Paragraph 7 shall survive the Closing.
8. Closing Date. The Closing Date shall occur on a date no later than
August 31, 2004; provided, however, Purchaser shall have the right, upon written
notice to Seller, to extend the Closing Date for a period not to exceed thirty
(30) days in order to finalize Purchaser's loan documents for the acquisition of
the Property.
Exhibit 8 - Page 2
9. Conditions to Closing. The following conditions precedent are hereby
added to Section 5.1 of the Agreement:
(o) Seller and Purchaser shall have agreed upon the form of
documentation required in connection with the issuance of the Common
Partnership Units to Seller at Closing.
(p) Seller and Purchaser shall have agreed upon the form of Guaranty
and Pledge Agreement in connection with the Reimbursement
Obligation.
(q) Purchaser shall be satisfied, in its sole and absolute
discretion, as to the results of a limited subsurface investigation
at and around the elevator pits at the Hampton Inn Terre Haute hotel
to determine the environmental impact of a leaking hydraulic system
for the elevators.
10. 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. In the event of any conflict between the
terms and provisions of the New Management Agreement and this Amendment, the
terms and provisions of this Amendment shall be deemed controlling.
11. 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.
Exhibit 8 - Page 3
IN WITNESS WHEREOF, Seller and Purchaser have caused this Amendment to be
executed effective as of the date first above written.
SELLER:
DUNN FAMILY ASSOCIATES, LLP, an Indiana
limited liability partnership
By: /s/ JOHN M. DUNN
------------------------
Name: John M. Dunn
Title: Manager
Date of Execution: August 4, 2004
HOTEL INVESTMENT, LLC, an Indiana limited
liability company
By: /s/ JOHN M. DUNN
------------------------------
Name: John M. Dunn
Title: Manager
Date of Execution: August 4, 2004
ENCORE HOTEL OF BLOOMINGTON, INC.,
an Indiana corporation
By: /s/ JOHN M. DUNN
---------------------------
Name: John M. Dunn
Title: President
Date of Execution: August 4, 2004
Exhibit 8 - Page 4
ENCORE HOTEL OF TERRE HAUTE, LLC, an
Indiana limited liability company
By: /s/ JOHN M. DUNN
---------------------------
Name: John M. Dunn
Title: Manager
Date of Execution: August 4, 2004
ENCORE RESIDENTIAL HOTEL OF EVANSVILLE, LLC,
an Indiana limited liability company
By: /s/ JOHN M. DUNN
----------------------------
Name: John M. Dunn
Title: Manager
Date of Execution: August 4, 2004
ENCORE HOTEL OF COLUMBUS, LLC, an Indiana
limited liability company
By: /s/ JOHN M. DUNN
-------------------------
Name: John M. Dunn
Title: Manager
Date of Execution: August 4, 2004
ENCORE HOTEL OF HORSE CAVE, LLC, a Kentucky
limited liability company
By: /s/ JOHN M. DUNN
----------------
Name: John M. Dunn
Title: Manager
Date of Execution: August 4, 2004
Exhibit 8 - Page 6
ENCORE HOTEL OF PRINCETON II, LLC, an Indiana
limited liability company
By: /s/ JOHN M. DUNN
--------------------
Name: John M. Dunn
Title: Manager
Date of Execution: August 4, 2004
ENCORE DUNN HOSPITALITY GROUP, LLC,
an Indiana limited liability company
By: /s/ JOHN M. DUNN
----------------
Name: John M. Dunn
Title: Manager
Date of Execution: August 4, 2004
Exhibit 8 - Page 6
PURCHASER:
ASHFORD HOSPITALITY LIMITED PARTNERSHIP,
a Delaware limited partnership
By: /s/ DAVD A. BROOKS
-------------------------
Name: David A. Brooks
Title: Vice President
Date of Execution: August 4, 2004
Exhibit 8 - Page 7