EXHIBIT 10.18
EXHIBIT C
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PLEDGE AND SECURITY AGREEMENT
This Pledge and Security Agreement made as of _______ __, 1998 by and among
LaSalle Hotel Properties (the "Company"), LaSalle Hotel Operating Partnership,
L.P. (the "Operating Partnership," together with the Company, the "Pledgee") and
**[LaSalle Plaza Park Limited Partnership, **[LaSalle Seaview, L.P. **[LaSalle
LRP Bloomington Limited Partnership]** **[LaSalle LRP Dallas Hotel Limited
Partnership]** **[LaSalle LRP New Orleans Hotel Limited Partnership]**
**[LaSalle LRP Key West Hotel Investors Limited Partnership]** **[LaSalle Le
Montrose Limited Partnership]** **[LaSalle Sabal Plaza Limited Partnership]**
LaSalle Omaha Hotel Investors Limited Partnership]** **[LaSalle Hotel Co-
Investment, Inc.]** ("Pledgor").
WHEREAS, Pledgor has entered into an Omnibus Contribution Agreement dated
as of January 30, 1998 and as amended (the "Contribution Agreement") with the
Operating Partnership pursuant to which Pledgor granted the Operating
Partnership an option to purchase certain assets;
WHEREAS, pursuant to the terms of the Contribution Agreement, Pledgor has
executed a Supplemental Representations, Warranties and Indemnity Agreement (the
"Supplemental Agreement") pursuant to which Pledgor has agreed to indemnify
Pledgee for certain losses;
WHEREAS, Pledgor has entered into the Supplemental Agreement in order to
induce the Operating Partnership to enter into the Contribution Agreement for
the benefit of Pledgor; and
WHEREAS, pursuant to the Supplemental Agreement, Pledgor has agreed to
enter into this Pledge and Security Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Pledgor and Pledgee hereby agree as follows:
Section 1. The Pledge.
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(a) As collateral security for full and timely performance of Pledgor's
obligations under the Supplemental Agreement (the "Secured Obligations"),
Pledgor hereby transfers, conveys, pledges, hypothecates and delivers to Pledgee
and its successors and assigns, and grants to Pledgee and its successors and
assigns a security interest in the following property (collectively referred to
herein as the "Collateral"):
(i) the units of limited partnership interest in the Operating
Partnership (the "Units") and the shares of common stock of the
Company (the "Common Stock") owned by Pledgor identified in EXHIBIT A
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hereto along with any shares of Common Stock exchanged for such Units
(the Units and the Common Stock, collectively the "Pledged
Securities");
(ii) all shares, securities, cash or property representing a dividend
or distribution on any of the Pledged Securities resulting from a
split-up, recapitalization, reclassification or other blanket change
of the Pledged Securities or otherwise received in exchange therefor
(which shall not include any quarterly or other regular cash
dividend);
(iii) any collateral substituted for the Pledged Securities pursuant
to Section l(b) below; and
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(iv) all proceeds of the property described in clauses (i) and (ii)
or, if collateral has been substituted under Section l(b) below, all
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proceeds of the property described in clause (iii) of this Section 1,
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but excluding any quarterly or regular cash dividend.
So long as no Event of Default as defined in Section 2(a) below shall have
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occurred and be continuing, Pledgor shall be entitled to receive and retain any
and all quarterly or regular cash dividends paid on the Collateral as defined in
Section l(b) below including any such dividends collected by Pledgee. If any of
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the above-described shares, securities, monies or property required to be
pledged by Pledgor under Section 1 hereof are received by Pledgor, Pledgor will
forthwith transfer and deliver to Pledgee such shares or securities so received
(together with the certificates for any such shares and securities duly endorsed
in blank or accompanied by undated stock powers duly executed in blank), all of
which thereafter shall be held by Pledgee pursuant to the terms of this
Agreement, as part of the Collateral.
The security interest in the Collateral granted to Pledgee as security for
the Secured Obligations shall terminate on [__________], except as to any amount
owing in respect of Pledgor's share of a loss under Section 3 of the
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Supplemental Agreement for which Pledgee has made demand for reimbursement prior
to such date (a "Pending Demand"). If a Pending Demand exists on [____________]
the security interest in the Collateral granted to Pledgee as security for the
Secured Obligations shall terminate when (a) such Pledgor's obligation under
Section 3 of the Supplemental Agreement is paid or (b) the Pending Demand has
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been finally determined (by agreement of Pledgee and Pledgor or a final judgment
of a court) to be without merit. On the applicable termination date provided
for in this paragraph, Pledgee shall forthwith cause to be assigned, transferred
and delivered, against receipt, any remaining Collateral and any money received
in respect of, to or on the order of Pledgor.
(b) Substitution of Publicly Traded Securities for the Pledged Securities.
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At any time after [_____________], Pledgor may substitute for the Pledged
Securities owned by him, certificated securities traded on a national securities
exchange or United States treasury bills, notes or bonds ("Treasury Securities")
which have Collateral Value, as hereinafter defined, equivalent to that of the
Pledged Securities (the "Substitute Collateral"). Pledgor shall effect such
substitution by delivering one or more certificates representing the Substitute
Collateral, duly endorsed in blank or accompanied by undated stock powers duly
executed in blank, to Pledgee or, in the case of Treasury Securities, by making
appropriate arrangements for registration of a pledge of the Substitute
Collateral in favor of Pledgee. Upon tender of the Substitute Collateral and
determination that the substituted securities are in due form hereunder, Pledgee
will return to Pledgor the certificates representing the Pledged Securities. As
used
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herein, "Collateral Value" means with respect to Pledged Securities the
product of (i) the number of shares of Common Stock or Units for which
Substitute Collateral is to be delivered multiplied by (ii) the closing price
per share of the Common Stock as reported by the New York Stock Exchange on the
day prior to the date on which the Substitute Collateral is received by Pledgee
and, with respect to Substitute Collateral, the product of (x) the number of
shares, units or other denominations of Substitute Collateral delivered
multiplied by (y) the price per share, unit or other denomination of the
Substitute Collateral at (or as nearly close to as can be determined) closing
or, if trading is continuous, 3:00 P.M. Eastern Time on the day prior to the
date on which the Substitute Collateral is delivered as reported by the
principal exchange or quotation system through which the Substitute Collateral
is traded. Pledgor agrees to take whatever steps are required to perfect
Pledgee's lien and take whatever other action is reasonably required to create
an equivalent lien to the lien created herein on the Substitute Collateral.
Pledgor will, at its expense, promptly execute, acknowledge and deliver all such
instruments and take all such action, including amendments hereto as Pledgee
from time to time may reasonably request in order to secure to Pledgee's
satisfaction the benefits of the liens in the Substitute Collateral created or
intended to be created by this Agreement. The rights of Pledgee under this
section shall be in addition to any and all other rights Pledgee may have
hereunder or under any other document, instrument or agreement with respect to
the Pledged Securities and the Secured Obligations, and may be exercised by
Pledgee on any one or more occasions.
Section 2. Events of Default and Remedies.
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(a) "Event of Default" means the occurrence of any of the following events:
1. any breach of any representation and warranty contained in
the Supplemental Agreement and Pledgor's failure to reimburse Pledgee
for the resulting loss within 20 days after demand; or
2. the failure of Pledgor to perform or observe any covenant
or agreement herein contained which failure continues for 20 days
after notice thereof is given by Pledgee to Pledgor.
(b) So long as no Event of Default shall have occurred under this Agreement
and be continuing, Pledgee shall have no voting or other powers of ownership
pertaining to the Collateral except for the right to receive the proceeds of the
Collateral as provided in Section 1(a) hereof.
(c) During any period in which an Event of Default shall have occurred and
be continuing, Pledgee shall have the following rights regarding the Collateral:
(i) Pledgee shall have all of the rights and remedies with respect to the
Collateral of a Secured Party under the Uniform Commercial Code, as is in effect
from time to time in the State of New York, and such additional rights and
remedies to which a secured party is entitled under the laws in effect and in
any jurisdiction where any rights and remedies hereunder may be asserted,
including, without limitation, the right, to the fullest extent permitted by
law, to exercise all voting, and other powers of ownership pertaining to the
Collateral as if Pledgee was the sole and absolute owner thereof (and Pledgor
agrees to take all such actions as may be appropriate to give effect to such
rights); (ii) Pledgee in its discretion may, in its name or the name of Pledgor
or otherwise,
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demand, xxx for, collect or receive any money or property at any time payable or
receivable on account of (including, but not limited to, cash distributions or
dividends paid on the Collateral subsequent to such Event of Default) or in
exchange for any of the Collateral, but shall be under no obligation to do so;
(iii) Pledgee may, without notice, apply any cash then held by Pledgee hereunder
in such amount as may be necessary, in Pledgee's sole discretion, to cover
losses or damages caused by an Event of Default; (iv) Pledgee may, upon 10
business days' written notice to Pledgor of the time and place, sell, assign or
otherwise dispose of all or any part of their collateral, at such place or
places as Pledgee deems best, and for cash, credit or future delivery (without
thereby assuming any credit risk), without demand or performance or further
notice of intention to effect such disposition or the time or place thereof
(except such notices which are required by applicable statute and cannot be
waived); and, further, Pledgee or anyone else who may be the purchaser, the
lessee, transferee or assignee of any or all of the Collateral so disposed of
shall thereafter hold the same absolutely free from any claim of right or
whatsoever kind, including any right or equity of redemption (statutory or
otherwise).
The proceeds of each collection, sale or other disposition under this
section shall be applied in accordance with Section 7 hereof.
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Pledgor recognizes that, by reason of certain prohibitions contained in the
Securities Act of 1933, as amended (the "Securities Act"), and applicable state
securities laws ("Blue Sky Laws"), Pledgee may be compelled, with respect to any
sale of all or any part of the Collateral, to make sales of such Collateral to
purchasers who have agreed, among other things, to acquire the Collateral for
their own account, for investment and not with a view to the distribution or
resale thereof. Pledgor acknowledges that such sales may be at prices and on
terms less favorable to Pledgee than those obtainable through a public sale
without such restrictions, and notwithstanding such circumstances, agrees that
any such sale shall be deemed to have been made in a commercially reasonable
manner. Pledgor acknowledges and agrees that under no circumstances will
Pledgee be required to register any of the Pledged Securities under the
Securities Act or any Blue Sky Laws.
(d) If any consent, approval or authorization of, or filing with, any
Governmental Authority or any other Person should be necessary to effectuate any
sale or other disposition of the Collateral, or any partial disposition of the
Collateral, Pledgor agrees to execute all such applications and other
instruments as may be required in connection with securing any such consent,
approval or authorization, and will otherwise use its best efforts to secure the
same. Pledgor further agrees to use its best efforts to secure such sale or
other disposition of the Collateral as Pledgee may deem necessary pursuant to
the terms of this Agreement.
(e) Pledgee shall not be obligated to make any sale or other disposition
unless the terms thereof shall be satisfactory to Pledgee in its sole and
absolute discretion. Pledgee may, without notice or publication, adjourn any
private or public sale, and, upon five (5) business day's written notice to
Pledgor, hold such sale at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the Collateral, on credit
or future delivery, the Collateral so sold may be retained by Pledgee until the
selling price is paid by the purchaser thereof, but Pledgee shall incur no
liability in case of the failure of such purchaser to take up and pay for the
property so sold and, in case of any such failure, such property may again be
sold as herein provided.
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Section 3. Certain Representations and Warranties.
Pledgor represents and warrants that:
(a) Pledgor has good and marketable title to the Pledged Securities
described in EXHIBIT A hereof;
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(b) The units of Pledged Securities are subject to no pledge, claim,
lien, security interest, charge, option, restriction or other
encumbrance except for (i) the restrictions, if any, set forth in
EXHIBIT B annexed hereto, which restrictions either by their terms or
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by waiver duly granted do not prohibit the pledge made hereby of
Pledgee's rights hereunder, (ii) the security interest created by this
Agreement and (iii) restrictions on transfer under the Securities Act
and Blue Sky Laws;
(c) Pledgor has full power, authority and legal right to execute and
deliver this Pledge Agreement and to pledge all shares of Pledged
Securities pursuant to this Agreement;
(d) The execution and delivery of this Agreement and the pledge of the
Collateral are within Pledgor's power, and such execution and delivery
and the pledging of such shares do not contravene any law, rule or
regulation thereunder or any judgment or order of any tribunal or of
any agreement or instrument to which Pledgor is a party or by which
Pledgor or any of its properties is bound or constitutes a default
thereof.
Section 4. Marshalling.
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Pledgee shall not be required to xxxxxxxx any present or future security
for (including, but not limited to this Agreement or any collateral pledge
hereunder), or guaranties of, the Secured Obligations of Pledgor, or to resort
to such security or guaranties in any particular order; and all of its rights
hereunder and in respect of such security and guaranties shall be cumulative and
in addition to all other rights hereunder, however existing or arising. To the
extent that they may lawfully do so, Pledgor hereby agrees not to invoke any law
relating to the marshalling of collateral which may cause delay and/or impede
the enforcement of any of Pledgee's rights under this Agreement or any other
instrument evidencing any of the obligations under this Agreement or the
Supplemental Agreement or under which any of such obligations is outstanding or
by which any of such obligations is secured or guarantied, and to the extent
that Pledgor may lawfully do so, Pledgor hereby irrevocably waives the benefit
of all such laws.
Section 5. Deficiency.
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If the proceeds of sale, collection or realization of or upon the
Collateral pursuant to Section 2 hereof are insufficient to cover the cost and
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expenses of such realization and the payment in full of the Secured Obligations,
Pledgor shall not be liable for any amounts which exceed the Collateral.
Pledgee may not collect from Pledgor's Collateral more than the Secured
Obligations plus costs and expenses of realizing on such Collateral.
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Section 6. Pledgor's Obligations Not Affected.
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The obligations of Pledgor hereunder shall remain in full force and effect
and shall not be impaired by:
(a) any amendment to or modification of any instrument (other than
this Agreement) securing any of the Secured Obligations;
(b) the taking of additional security for, or any guaranty of, any of
the Secured Obligations or the release or discharge or termination of
any security or guaranty for any of the Secured Obligations; or
(c) the lack of enforceability of any of the Secured Obligations
against Pledgor or any other person, whether or not Pledgor shall have
notice or knowledge of any of the foregoing.
Section 7. Application of Proceeds.
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Except as otherwise expressly provided in Section 5 herein, the proceeds of
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any collection, sale or other realization of any or any part of the Collateral
pursuant hereto shall be applied by Pledgee: first to the payment of the cost
and expenses of such collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of Pledgee and the fees and expenses of its
agents and counsel; second to the payment in full of the Secured Obligations;
and lastly, to the payment to Pledgor, or its heirs, executives, administrators,
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successors or assigns, or as a court of competent jurisdiction may direct, of
any surplus then remaining.
As used in this Section 7, "the proceeds" of the Collateral shall mean
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cash, securities and other property realized.
Section 8. Perfection.
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At the Closing, Pledgor shall deliver to Pledgee evidence of the
registration of pledge on the books of the Operating Partnership of the Units
identified as owned by Pledgor in EXHIBIT A hereto to Pledgee. Pledgor agrees
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to take any and all subsequent actions reasonably necessary to perfect the
security interest in the Collateral contemplated hereby.
Section 9. Transfer, Etc., by Pledgor.
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Except for the substitution of Collateral as provided in Section l(b)
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hereof, without (i) the prior written consent of Pledgee or (ii) the delivery of
securities and instruments of transfer for substitution of Collateral under
Section l(b) hereof, Pledgor will not sell, assign, transfer or otherwise
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dispose of, grant any option with respect to, or pledge or grant any security
interest in or otherwise encumber any in the Collateral or any interest therein,
except for the Pledge provided for in this Agreement and for those obligations
set forth in EXHIBIT B hereto.
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Section 10. Further Assurances.
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Pledgor will from time to time execute and deliver to Pledgee all such
other and further instruments and documents and take or cause to be taken all
such other and further actions as Pledgee may reasonably request in order to
effect and confirm more securely in Pledgee all rights contemplated in this
Agreement.
Section 11. Expenses.
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Subject to Section 5 hereof, Pledgor agrees to pay to Pledgee all
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reasonable out-of-pocket expenses of Pledgee (including reasonable expenses for
legal services of every kind) of, or incident to the enforcement of, any
provisions of this Agreement.
Section 12. Miscellaneous.
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(a) Waiver, etc. No act, failure or delay by Pledgee shall constitute
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a waiver of its rights, powers or remedies hereunder or otherwise. No
single or partial waiver by Pledgee of any of its agents of any
default or right or remedy which it may have shall constitute a waiver
of any other default, right or remedy or of the same default, right or
remedy on a future occasion. Pledgor hereby waives presentment,
notice of dishonor and protest of all instruments and any and all
other notices and demands whatsoever (except as expressly provided
herein). The remedies herein are cumulative and are not exclusive of
any other remedies which may be provided by law.
(b) Governing Law. This Agreement shall be governed by, and construed
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in accordance with, the laws of the State of New York.
(c) All communications herein provided shall be in writing and shall
be sufficient if sent by United States mail, registered or certified,
delivered by messenger, so called overnight courier, telex or
facsimile, addressed as follows:
If to Pledgor: c/o LaSalle Partners
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxx & Associates
000 Xxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Attn: Xxxxxx X. Xxxxx, Esq.
Phone: (000) 000-0000
Facsimile: (000) 000-0000
If to Pledgee: c/o LaSalle Partners
000 Xxxx 00xx Xxxxxx
0
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxx
Phone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxx & Wood
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Phone: (000) 000-0000
Facsimile: (000) 000-0000
or such other addresses where any party may receive any such communication
or notice as may be designated by written notice to the other parties. Any
notice given pursuant to this section to effect a change of address shall
be effective when received.
(d) Successors and Assigns. This Agreement and all obligations of
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Pledgor herein shall be binding upon the heirs, executives, successors
and assigns of Pledgor, and shall, together with the rights and
remedies of Pledgee hereunder, inure to the benefit of Pledgee, and
its respective successors and assigns.
(e) Severability. If any term in this Agreement shall be held to be
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invalid or illegal or unenforceable in any respect, the validity of
all other terms hereof shall be in no way affected thereby, and this
Agreement shall be construed and be enforceable as if such invalid,
illegal or unenforceable term had not been included herein.
(f) Counterparts. This Agreement may be executed in any number of
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counterparts, all of which taken together shall constitute one and the
same instrument and any other parties hereto may execute this
Agreement by signing any such counterparts.
(g) Other. To the extent permitted by applicable law, Pledgor hereby
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waives trial by jury in any proceeding brought for the interpretation
or enforcement of this Agreement or for a determination of the rights
of the parties hereunder. Terms used herein without definition, but
which are defined in the Supplemental Agreement, shall, unless the
context otherwise indicates or requires, have the meaning ascribed in
said Supplemental Agreement.
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IN WITNESS WHEREOF, Pledgor and Pledgee have caused this Agreement to be
duly executed as an instrument under seal as of the date first above written.
Pledgee:
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LASALLE HOTEL OPERATING
PARTNERSHIP, L.P.
By: LaSalle Hotel Properties, its
General Partner
By: ___________________
Name:
Title:
Pledgor:
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**[LASALLE PLAZA PARK LIMITED PARTNERSHIP]**
**[LASALLE SEAVIEW, L.P.]** **[LASALLE LRP
BLOOMINGTON LIMITED PARTNERSHIP]**
**[LASALLE LRP DALLAS HOTEL LIMITED
PARTNERSHIP]** **[LASALLE LRP NEW ORLEANS
HOTEL LIMITED PARTNERSHIP]** **[LASALLE LRP
KEY WEST HOTEL INVESTORS LIMITED
PARTNERSHIP]** **[LASALLE LE MONTROSE
LIMITED PARTNERSHIP]** **[LASALLE SABAL
PLAZA LIMITED PARTNERSHIP]** **[LASALLE
OMAHA HOTEL INVESTORS LIMITED PARTNERSHIP]**
**[LASALLE HOTEL CO-INVESTMENT, INC.]**
By: ___________________, its ____________
By: ___________________
Name:
Title:
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EXHIBIT A
PLEDGED UNITS OF LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
Number of Units
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10
EXHIBIT B
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Restrictions on Transfer
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1. Registration Rights Agreement, dated as of [_________]
2. Lockup Agreement, dated as of [____________]
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