EXHIBIT (10)(v)
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TERMINATION AND SERVICES AGREEMENT
Dated as of December 28, 2000
between
LASALLE HOTEL PROPERTIES
and
LASALLE HOTEL ADVISORS, INC.
and
LASALLE INVESTMENT MANAGEMENT, INC.
Relating to
the Amended and Restated Advisory Agreement dated January 1, 2000
and
the Employee Lease Agreement dated January 1, 2000
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TERMINATION AND SERVICES AGREEMENT
This TERMINATION AND SERVICES AGREEMENT (this "Agreement") is dated
as of December [ ], 2000, and is between LaSalle Hotel Properties, a
Maryland real estate investment trust ("LHO"), LaSalle Hotel Advisors,
Inc., a Maryland corporation (the "Advisor") and LaSalle Investment
Management, Inc., a Maryland corporation, ("LIM").
W I T N E S S E T H:
WHEREAS, LHO is an externally advised real estate investment trust
that wishes to convert to a self managed real estate investment trust;
WHEREAS, pursuant to the terms of the Amended and Restated Advisory
Agreement dated January 1, 2000 and the Employee Lease Agreement dated
January 1, 2000 (collectively, the "Advisory Agreement"), the Advisor
provides inter alia services consisting of acquisition, leasing, investment
management, financing, ownership and disposition of LHO's properties and
the lease of employees;
WHEREAS, the Advisor is an affiliate of LIM;
WHEREAS, the Advisory Agreement is automatically renewed each year
for an additional one year unless either LHO or the Advisor provides the
other with notice of termination 180 days prior to the expiration of the
then current term; and
WHEREAS, LHO and the Advisor are desirous to terminate the Advisory
Agreement and for LIM and the Advisor to provide services to LHO to aid the
transition to an internally managed real estate investment trust pursuant
to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants set forth in
this Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
1. TERMINATION OF ADVISORY AGREEMENT.
1.1. TERMINATION
Notwithstanding the language in the Advisory Agreement, the parties
hereby agree to immediately and completely terminate the Advisory Agreement
and all of their continuing rights and obligations thereunder, with the
exception of the indemnification provisions pursuant to Section 7.2 of the
said agreement, effective as of 12.01a.m., January 1, 2001 (the
"Termination Date").
This Agreement shall not affect any party's rights obligations or
liabilities under or pursuant to the Advisory Agreement which have already
accrued up to the Termination Date, including, but not limited to, LIM's
right to receive fees (including any incentive fees) earned in 2000 but to
be paid in 2001.
1.2. TERMINATION PAYMENT.
In consideration for the termination of the Advisory Agreement prior
to the end of the requisite 180 day notice period, the services to be
provided and the execution of this Agreement, LHO shall pay LIM $600,000.00
(the "Termination Payment") by wire transfer or by company check.
The Termination Payment shall be paid by LHO upon the earlier of the
date upon which the Services (as hereinafter defined) are substantially
completed to the reasonable satisfaction of LHO or March 30, 2001, provided
however that should the Services not be so completed by March 30, 2001, LHO
shall make such payment as in its reasonable opinion reflects the Services
provided to date and shall only be obliged to pay the remainder of the
Termination Payment when the Services have been so completed.
The parties acknowledge and agree that the Termination Payment shall
be paid in lieu of any other payments which may otherwise be deemed to be
payable in respect of the termination of the Advisory Agreement.
2. OBLIGATIONS OF LIM AND THE ADVISOR.
2.1. PROVISION OF SERVICES
LIM and the Advisor shall promptly and expeditiously and in any event
prior to the March 30, 2001 provide to LHO services to facilitate the
transition from an externally advised real estate investment trust to an
internally managed real estate investment trust as are more particularly
set out in Exhibit A to this Agreement (the "Services").
2.2. BEST EFFORTS
LIM and the Advisor shall use their reasonable best efforts in the
provision of the Services.
2.3. EXPENSES AND PAYABLES
LIM will be responsible for all of the Advisor's expenses and
payables for activities pursuant to the Advisory Agreement prior to the
Termination Date.
2.4. ACCRUED EMPLOYEE COMPENSATION
LIM will be responsible for all accrued employee compensation and
benefits for work done prior to the Termination Date, including bonuses
earned in 2000 but scheduled to be paid in 2001 per the current
understanding between LHO's management and LIM's management.
2.5. PAYMENT FOR ADVISORY SERVICES
LIM shall reimburse LHO the payments more particularly set out in
Section 3.5 below, being the costs associated with LHO allowing its
employees to provide the Advisory Services.
2.6. REPRESENTATIONS
LIM and the Advisor represent that all of the furniture, fixtures and
equipment to be transferred to LHO and/or LaSalle Hotel Operating
Partnership, L.P., a Delaware limited partnership (the "Partnership")
pursuant to Section 3.1 and 3.2 below, shall be free of all liens and
encumbrances not expressly assumed by LHO, and have been paid for in full,
without deduction or setoff.
3. OBLIGATIONS OF LHO
3.1. FIXTURES AND FITTINGS ETC.
On or before January 15, 2001 LHO will, or will cause the Partnership
to, buy the furniture, fixtures and equipment currently used by the Advisor
in the Bethesda office and leasehold improvements of the office for
$301,994.
3.2. ACCOUNTING SERVER
On or before January 15, 2001 LHO shall pay LIM $50,000, being the
cost of installing a new accounting server in the Bethesda office.
3.3. LEASE OF 0000 XXXXXXXXXX XXXX
LHO shall assume the lease of the office space located at
0000 Xxxxxxxxxx Xxxx, Xxxxx X00, Xxxxxxxx, XX at the stated price of the
lease, effective as of the Termination Date.
3.4. EMPLOYEES OF THE ADVISOR
Prior to the Termination Date, LHO shall offer employment to all
current employees of the Advisor effective January 1, 2001.
3.5. ADVISORY SERVICES
Effective as of the Termination Date, LHO shall make its employees
available for the purpose of the said employees providing advisory services
to LIM and its clients for:
(i) the Peabody Hotel in Orlando, Fl, for $266,000 per year
together with any third party expenses incurred by LHO which would be
reimbursable under the terms of the Advisory Agreement; and
(ii) the Holiday Inn on the Hill in Washington, DC for $129,000 per
year (the "Advisory Services").
The Advisory Services shall continue in respect of each hotel until
that hotel is sold by LIM's clients.
These amounts to be paid quarterly in arrears and shall be increased
on each anniversary of the Termination Date by an amount equal to the
Consumer Price Index on that date should the said separate agreements be
then continuing. Should any period be less than a quarter then the payment
due shall be pro-rated accordingly.
4. MISCELLANEOUS
4.1. CONFIDENTIALITY
Confidential or proprietary information disclosed by the parties
hereto shall be considered confidential information (the "Confidential
Information"). Confidential Information shall not include any information
which (i) is publicly available at the time of disclosure to the receiving
party or thereafter becomes publicly available not as a result of a breach
of any duty of confidentiality to any party hereunder, (ii) was known to
the party charged with a confidentiality obligation hereunder before
disclosure from another party hereto on a confidential basis, (iii) was
obtained from a source acting in good faith which the receiving party
reasonably believed owed no duty of confidentiality to any party hereunder,
or (iv) that is required to be disclosed pursuant to applicable law, a
court order, a judicial proceeding, or the enforcement hereof, provided
that the disclosing party is provided with reasonable prior written notice
so that the disclosing party may contest such disclosure. The Confidential
Information shall not be disclosed by any party to this Agreement to any
third party.
4.2. JURY WAIVER
TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS AGREEMENT OR ANY OF THE TRANSACTIONS OR AGREEMENTS
CONTEMPLATED HEREBY.
4.3. PUBLICITY
None of the parties hereto shall issue any press release or make any
public disclosure regarding the transaction contemplated hereby unless such
press release or public disclosure is approved by those parties expressly
mentioned by name in the press release in advance. Notwithstanding the
foregoing, each of the parties hereto may, in documents required to be
filed by it with the Securities and Exchange Commission or other regulatory
bodies, make such statements with respect to the transactions contemplated
hereby as each may be advised by counsel as legally necessary or advisable
and may make such disclosure as it is advised by its counsel as required by
law.
4.4. EXPENSES
Each party hereto shall pay its own expenses incident to this
Agreement, including all legal and accounting fees and disbursements.
4.5. ASSIGNMENT
No party to this Agreement shall assign its rights and obligations
under this Agreement, in whole or in part, whether by operation of law or
otherwise, without the prior written consent of the other party, and any,
such assignment contrary to the terms hereof shall be null and void and of
no force and effect. In no event shall the assignment by the parties
hereto of their rights or obligations under this Agreement, release that
party from their respective liabilities and obligations hereunder.
4.6. INDEPENDENT CONTRACTORS
It is understood and agreed by and between the parties hereto that
LIM [and the Advisor], in the performance of the Services, shall act as,
and be an independent contractor and not an agent or employee of LHO.
All such acts of LIM and the Advisor, its agents, officers and
employees and all other actions on behalf of LHO relating to the
performance of the Services, shall be performed as independent contractors
not as agents, officers, or employees of LHO.
4.7. ENTIRE AGREEMENT; AMENDMENT
This Agreement, including the Exhibits and other documents referred
to herein or furnished pursuant hereto, constitutes the entire agreement
among the parties hereto with respect to the transaction contemplated
herein, and it supersedes all prior oral or written agreements, commitments
or understandings with respect to the matters provided for herein. No
amendment or modification of this Agreement shall be valid or binding
unless set forth in writing and duly executed and delivered by the parties
hereto.
4.8. WAIVER
No delay or failure on the part of any party hereto in exercising any
right, power or privilege under this Agreement or under any other documents
furnished in connection with or pursuant to this Agreement shall impair any
such right, power or privilege or be construed as a waiver of any default
or any acquiescence therein. No single or partial exercise of any such
right, power or privilege shall preclude the further exercise of such
right, power or privilege, or the exercise of any other right, power or
privilege. No waiver shall be valid against any party hereto unless made
in writing and signed by the party against whom enforcement of such waiver
is sought and then only to the extent expressly specified therein.
4.9. SEVERABILITY
If any part of any provision of this Agreement or any other agreement
or document given pursuant to or in connection with this Agreement shall be
invalid or unenforceable in any respect, such part shall be ineffective to
the extent of such invalidity or unenforceability only, without in any way
affecting the remaining parts of such provision or the remaining provisions
of this Agreement.
4.10. GOVERNING LAW
This Agreement, the rights and obligations of the parties hereto, and
any claims or disputes relating thereto, shall be governed by and construed
in accordance with the laws of the State of New York (excluding the
conflicts of law principles thereof).
4.11. NOTICES
All notices, demands, requests, or other communications which may be
or are required to be given, served, or sent by any party to any other
party pursuant to this Agreement shall be in writing and shall be hand
delivered, sent by overnight courier or mailed by first-class, registered
or certified mail, return receipt requested, postage prepaid, or
transmitted by telegram, telecopy, addressed as follows:
(i) If to LHO:
0000 Xxxxxxxxxx Xxxx
Xxxxx X00
Xxxxxxxx, Xxxxxxxx 00000
Attn: President
Fax #: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxx & Wood LLP
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Fax #: (000) 000-0000
(ii) If to LIM:
00 Xxxxxxx Xxxxxx
Xxxxxx X0X 0XX
Xxxxxx Xxxxxxx
Attn: Xxxxxx X. Xxxxx
Fax #: 000-00-00-0000-0000
with a copy (which shall not constitute notice) to:
Xxxxx & Associates
000 Xxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxx
Fax #: (000) 000-0000
Each party may designate by notice in writing a new address, to which
any notice, demand, request or communication may thereafter be so given,
served or sent. Each notice, demand, request, or communication which shall
be hand delivered, sent, mailed or telecopied in the manner described
above, shall be deemed sufficiently given, served, sent, received or
delivered for all purposes at such time as it is delivered to the addressee
(with the return receipt, the delivery receipt, or (with respect to a
telecopy) the answerback or confirmation being deemed conclusive, but not
exclusive, evidence of such delivery) or at such time as delivery is
refused by the addressee upon presentation.
4.12. HEADINGS
Section headings contained in this Agreement are inserted for
convenience of reference only, shall not be deemed to be a part of this
Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
4.13. EXECUTION IN COUNTERPARTS
To facilitate execution, this Agreement may be executed in as many
counterparts as may be required. It shall not be necessary that the
signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart; but it
shall be sufficient that the signature of, or on behalf of, each party, or
that the signatures of the persons required to bind any party, appear on
one or more of the counterparts. All counterparts shall collectively
constitute a single agreement. It shall not be necessary in making proof of
this Agreement to produce or account for more than a number of counterparts
containing the respective signatures of or on behalf of, all of the parties
hereto.
4.14. BINDING EFFECT
Subject to any provisions hereof restricting assignment, this
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, heirs, executors,
administrators, legal representatives and assigns.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above
LASALLE HOTEL PROPERTIES
By:
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LASALLE HOTEL ADVISORS, INC
By:
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LASALLE INVESTMENT MANAGEMENT, INC.
By:
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EXHIBIT A
The Services to be provided by LIM and the Advisor are as follows:
. Migrating all of LHO's accounting and tax records, workpapers
and worksheets and similar from LIM's and the Advisor's servers to LHO's
servers;
. Providing information technology support and the migration of
management information systems to LHO's own servers (including the usage of
LIM's systems through the first quarter of 2001 to facilitate the orderly
transfer of LHO's accounting books and records);
. Providing the necessary tax accounting assistance for the
preparation of LHO's tax return and related real estate investment trust (
"REIT") tax accounting for the calendar year 2000;
. Assigning the lease of the office space at 0000 Xxxxxxxxxx
Xxxx, Xxxxx X00, Xxxxxxxx, Xxxxxxxx, 00000 currently leased by the Advisor
to LHO;
. Providing LHO with accounting assistance to institute an
employee payroll system;
. Providing LHO with human resources assistance for employees,
including instituting benefit plans and other matters necessary for
employee transition;
. Assisting in the placement of a master property insurance
program for all properties; and
. Such other assistance as may be required to facilitate LHO's
transition from an externally advised to a self-managed REIT.
