EXHIBIT 10.2
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SECOND AMENDMENT TO LEASE
Second Amendment (this "Amendment") to Lease (hereinafter defined),
dated as of January 1, 1999, by and between LASALLE HOTEL OPERATING
PARTNERSHIP, L.P. ("Landlord"), having an address at 0000 Xxx Xxxxxx, X.X.,
Xxxxx 000, Xxxxxxxxxx, XX 00000 and LASALLE HOTEL LESSEE, INC. ("Tenant"),
having an address at c/o LaSalle Hotel Advisors, 0000 Xxx Xxxxxx, X.X.,
Xxxxx 000, Xxxxxxxxxx, XX 00000. Capitalized terms not otherwise defined
herein shall have the definitions set forth in the Lease.
WITNESSETH
WHEREAS, Landlord and Tenant entered into that certain Lease (the
"Lease"), dated as of _______, covering the Leased Property commonly known
as the ______________;
WHEREAS, Landlord and Tenant into that certain First Amendment to
Lease (the "First Amendment") dated as of December 31, 1998, amending
certain terms and provisions at the lease, as more fully set forth in the
First Amendment
WHEREAS, the parties desire to further amend the Lease to: (i)
modify the definition of Beverage Sales, CPI, Food Sales and Gross
Revenues, (ii) modify CPI Adjustments, and (iii) amend Exhibit A to change
certain provisions contained therein.
NOW, THEREFORE, for Ten ($10.00) Dollars and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Landlord and Tenant hereby amend the Lease as follows:
1. SECTION 1.15, 1.52, 1.58. Sections 1.15, 1.52, and 1.58 shall be
deleted in their entirety and replaced with the following:
1.15 "BEVERAGE SALES" shall mean Gross Revenues from (a) the sale of
wine, beer, liquor or other alcoholic beverages, whether sold in a bar or
lounge, delivered to or available in a guest room, sold at meetings or
banquets or at any other location at the Hotel and (b) non-alcoholic
beverages sold in a bar or lounge. Such revenue shall include sales by
Tenant and its permitted subtenants, licensees and concessionaires if such
permitted subtenant, licensees or concessionaires are Affiliates of Tenant.
Such revenue shall be determined in a manner consistent with GAAP and the
Uniform System of Accounts and shall include (a) the fair market value of
goods or services which have been provided in exchange for beverages under
bartering or trade arrangements, (b) the fair market value of beverages
provided under frequent traveler programs, gift certificate programs or any
other similar programs, and (c) the fair market value of any other
allowances deducted from beverage revenues (items (a)-(c) being allocated
to the respective revenues categories in accordance with the Uniform System
of Accounts). Such revenue shall not include: (a) any gratuity, or
service charge added to a customer's xxxx or statement in lieu of gratuity;
or (b) sales taxes or taxes of any other kind imposed on the sale of
alcoholic or other beverages; or (c) the value of any beverages provided to
employees of Landlord, Tenant, any franchise or under the Franchise
Agreement or any guest on a complimentary basis. All credits, rebates,
refunds and credit card chargebacks relating to Beverage Sales shall be
deducted from Beverage Sales.
1.52 "FOOD SALES" shall mean (a) Gross Revenues from the sale of
food and non-alcoholic beverages that are prepared at the Hotel and sold or
delivered on or off the Hotel by Tenant whether for cash or for credit,
including in respect of guest rooms, banquet rooms, meeting rooms and other
similar rooms, and (b) Gross Revenues from the rental of banquet, meeting
and other similar rooms. Such revenue shall include sales by Tenant and
its permitted subtenants, licensees and concessionaires, but as to
subleases, licenses or similar arrangements for food and non-alcoholic
beverage sales which were entered into by Landlord or any prior owner of
the Leased Property with parties who are not Affiliates of Tenant and which
are existing as of the date of this Agreement, such revenue shall only
include rents received under such existing subleases, licenses or similar
arrangements. Such revenue shall be determined in a manner consistent with
GAAP and the Uniform System of Accounts and shall include (a) the fair
market value of goods or services which have been provided in exchange for
food under bartering or trade arrangements, (b) the fair market value of
food provided under frequent traveler programs, gift certificate programs
or any other similar programs, and (c) the fair market value of any other
allowances deducted from food revenues, (items (a)-(c) being allocated to
the respective revenues categories in accordance with the Uniform System of
Accounts). Such revenue shall not include: (a) vending machine sales; (b)
any gratuities, or service charges added to a customer's xxxx or statement
in lieu of gratuity, (c) non-alcoholic beverages sold from a bar or lounge;
or (d) sales taxes or taxes of any other kind imposed on the sale of food
or non-alcoholic beverages; or (e) the value of food or non-alcoholic
beverages provided to employees of Landlord, Tenant, the franchisor under
the Franchise Agreement or any other guests on a complimentary basis. All
credits, rebates, refunds and credit card chargebacks relating to Food
Sales shall be deducted from Food Sales.
1.58 "GROSS REVENUES" shall mean all revenues, receipts, and income
of any kind derived directly or indirectly by Tenant from or in connection
with the Hotel (including rentals or other payments from their tenants,
lessees, licensees or concessionaires but not including their gross
receipts) whether on a cash basis or credit, paid or collected, determined
in accordance with GAAP and the Uniform System of Accounts, excluding,
however: (a) funds furnished by Landlord, (b) federal, state and municipal
excise, sales, and use taxes collected directly from patrons and guests or
as a part of the sales price of any goods, services or displays, such as
gross receipts, admissions, cabaret or similar or equivalent taxes and paid
over to federal, state or municipal governments, (c) any gratuities, or
service charges added to a customer's xxxx or statement in lieu of
gratuity, (d) proceeds of insurance and Awards, (e) proceeds from sales of
furnishings, fixtures and equipment which are permitted pursuant to the
terms of this Agreement, (f) all loan
proceeds from financing or refinancings of the Hotel or
interests therein or components thereof, (g) interest earned on funds
deposited into the Reserve Fund and (h) judgments and awards, except any
portion thereof arising from normal business operations of the Hotel.
2. By way of clarification only, it is understood by and between the
parties hereto that for purposes of accounting for the profit and loss
statement for the Hotel, any net gratuities or net service charges not paid
out to employees are recorded as a deduction from the appropriate payroll
accounts, and shall not be utilized in the calculation of Rent.
3. SECTION 3.14 Section 3.1.4 shall be deleted in its entirety and
replaced with the following:
3.1.4 CPI ADJUSTMENTS. For each Lease Year during the Term beginning
with the Lease Year commencing January 2000 the Minimum Rent then in
effect, the Annual Room Revenues First Break Point, the Annual Room
Revenues Second Break Point (each as defined in EXHIBIT A and together, the
"ANNUAL ROOM REVENUES BREAK POINTS"), the Annual Food and Beverage Sales
First Break Point, the Annual Food and Beverage Sales Second Break Point,
(each as defined in EXHIBIT A and together, the "ANNUAL FOOD AND BEVERAGE
SALES BREAK POINTS"), the Annual Telephone Revenues First Break Point, the
Annual Telephone Revenues Second Break Point (each as defined in EXHIBIT A
and together, the "ANNUAL TELEPHONE REVENUES BREAK POINTS"), the Annual
Other Income First Break Point, the Annual Other Income Second Break Point
(each as defined in EXHIBIT A and together, the "ANNUAL OTHER INCOME BREAK
POINTS), then included in the Revenues Computation shall be increased as
follows:
(a) For the Lease Year commencing January 2000, and for each Lease
Year thereafter during the Term, the average CPI for the immediately
preceding twelve (12) months immediately preceding the new Lease Year (the
"MEASUREMENT DATE") shall be divided by the average CPI for the twelve (12)
months in the prior calendar year and such number shall be expressed as a
percentage and such percentage shall be increased by one (1) percent (the
"FACTOR") (for example, if the percentage is 3.2%, then the Factor shall be
4.2%); provided, however, (i) for the Lease Years commencing January 2002
and January 2008 the term "Factor" shall be deemed to be the product of (x)
the Factor and (y) 371/364, and (ii) for the Lease Years commencing January
2003 and January 2009 the term "Factor" shall be deemed to be the product
of (x) the Factor and (y) 364/371;
(b) The new Minimum Rent for the Lease Year commencing January 2000
and for each Lease Year thereafter shall be the product of (x) the Minimum
Rent in effect in the most recently ended Lease Year and (y) the Factor;
(c) The new Annual Room Revenues Break Points in the Revenues
Computation for the Lease Year commencing January 2000 and for each Lease
Year thereafter shall be the product of (x) the Annual Room Revenues Break
Points in effect in the most recently ended Lease Year and (y) the Factor;
(d) The new Annual Food and Beverage Sales Break Points in the
Revenues Computation for the Lease Year commencing January 2000 and for
each Lease Year thereafter shall be the product of (x) the Annual Food and
Beverage Sales Break Points in effect in the most recently ended Lease Year
and (y) the Factor;
(e) The new Annual Telephone Revenues Break Points in the Revenues
Computation for the Lease Year commencing January 2000 shall be the product
of (x) the Annual Telephone Revenues Break Points in effect for the most
recently ended Lease Year and (y) the Factor;
(f) The new Annual Other Income Break Points in the Revenues
Computation for the Lease Year commencing January 2000 and for each Lease
Year thereafter shall be the product of (x) the Annual Other Income Break
Points in effect in the most recently ended Lease Year and (y) the Factor.
Adjustments calculated as set forth above in the Minimum Rent, the
Annual Room Revenues Break Points, the Annual Food and Beverage Sales Break
Points, the Annual Telephone Revenues Break Points, and the Annual Other
Income Break Points, shall be effective on the first day of each Lease Year
to which such adjusted amounts apply. If Rent is paid prior to the
determination of the amount of any adjustment to Minimum Rent, the Annual
Room Revenues Break Points, the Annual Food and Beverage Sales Break
Points, the Annual Telephone Revenues Break Points, and the Annual Other
Income Break Points applicable for such period, whether because of a delay
in the publication of the CPI for the Measurement Date or because of any
other reason, payment adjustments for any shortfall in or overpayment of
Rent paid shall be made with the first Minimum Rent and Participating Rent
payments due after the amount of the adjustments are determined. If (1) a
significant change is made in the number or nature (or both) of items used
in determining the CPI, or (2) the CPI shall be discontinued for any
reason, the Bureau of Labor Statistics shall be requested to furnish a new
index comparable to the CPI, together with information which will make
possible a conversion to the new index in computing the adjusted Minimum
Rent, the Annual Room Revenues Break Points, the Annual Food and Beverage
Sales Break Points, the Annual Telephone Revenues Break Points, and the
Annual Other Income Break Points hereunder. If for any reason the Bureau
of Labor Statistics does not furnish such an index and such information,
the parties will instead mutually select, accept and use such other index
or comparable statistics on the cost of living in various cities that is
computed and published by an agency of the United States of America or a
responsible financial periodical of recognized authority. In no event
shall the Minimum Rent, the Annual Room Revenues Break Points, the Annual
Food and Beverage Sales Break Points, the Annual Telephone Revenue Break
Points, or the Annual Other Income Break Points be reduced as a result of
any changes in the CPI or changes to the calculation of CPI.
3. EXHIBIT A. Exhibit A shall be deleted in its entirety and
replaced with Exhibit A annexed hereto and made a part hereof.
4. DEFINED TERMS. Capitalized terms not otherwise defined herein
shall have the definitions set forth in the Lease.
5. NO OTHER AMENDMENT. Except as expressly modified by this
Amendment, all other terms and conditions of the Lease are hereby ratified
and remain unchanged.
6. FULL FORCE AND EFFECT. The parties hereto certify and
acknowledge that (a) the Lease, as amended by this Amendment, is in full
force and effect; (b) neither party is in default of any of the terms and
conditions set forth in the Lease; and (c) the Lease, as amended hereby, is
enforceable in accordance with its terms.
[SIGNATURES ARE ON THE NEXT PAGE]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the date and year first above written.
LANDLORD: LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
By: LaSalle Hotel Properties,
its general partner
By: ______________________________
Name:
Title: Authorized Signatory
TENANT: LASALLE HOTEL LESSEE, INC.
By: _______________________________
Name:
Title: Authorized Signatory
