EXHIBIT 10.1
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AMENDED AND RESTATED
ADVISORY AGREEMENT
THIS AMENDED AND RESTATED ADVISORY AGREEMENT (this "Agreement"), is
dated as of January 1, 2000 (the "Effective Date"), by and between LASALLE
HOTEL PROPERTIES, a Maryland real estate investment trust (the "Company"),
and LASALLE HOTEL ADVISORS, INC., a Maryland corporation (the "Advisor").
WHEREAS, the Company through its interest in LaSalle Hotel Operating
Partnership, L.P. (the "Operating Partnership") is in the business of
acquiring, developing, managing, owning and disposing of hotels (the
"Hotels") and leasing the Hotels to qualified lessees (the "Hotel Lessees")
pursuant to participating leases (the "Leases") (for purposes hereof unless
the context otherwise requires, the term "Company" shall include the
Company and the Operating Partnership); and
WHEREAS, the Company is qualified, and intends in the future to
qualify, as a Real Estate Investment Trust (a "REIT") under the Internal
Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the Company desires to retain the services of the Advisor
with respect to the acquisition, leasing, investment management, financing,
ownership and disposition of the Hotels, and to provide certain services to
the Company in connection with such Hotels and Leases on the terms set
forth herein and consistent with the Company's initial and continued
qualification and operation in accordance with all requirements applicable
to a REIT; and
WHEREAS, the Advisor is willing to provide such services to the
Company on the terms set forth herein; and
WHEREAS, pursuant to the terms of that certain Advisory Agreement by
and between the Company and the Advisor dated as of April 23, 1998 (the
"Original Agreement"), the Advisor agreed to perform such services for the
Company; and
WHEREAS, the Company and the Advisor hereby desire to amend and
restate the Original Agreement in its entirety;
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. AMENDMENT AND RESTATEMENT OF ORIGINAL AGREEMENT/APPOINTMENT OF
ADVISOR. As of the Effective Date, the Original Agreement is hereby
amended and restated in its entirety upon the terms and conditions
contained herein. The Company hereby retains the Advisor on the terms
hereinafter set forth, and the Advisor hereby accepts such appointment.
2. DUTIES OF ADVISOR. The Advisor shall perform the following
activities consistent with the Company's stated policy of maximizing
current returns to shareholders through increases in cash available for
distribution and to increase long term total returns to shareholders
through appreciation in the value of its common shares, subject to the
direction and supervision of the Company's Board of Trustees:
(i) identify, negotiate, review and analyze a continuing and
suitable investment program of Hotel acquisitions and developments,
consistent with the investment policies and objectives of the Company and
consistent with the Company's Declaration of Trust;
(ii) cause the Company to perform its responsibilities and
enforce its rights under the Leases so as to increase lease income and
enhance the Hotels' values;
(iii) identify Hotels for sale consistent with the Company's
investment objectives and prevailing economic conditions and retain
investment banks, brokers or other intermediaries to market for sale such
Hotels;
(iv) advise the Company in connection with its financing
strategy including assisting the Company in the negotiation of any
borrowings which the Company may seek to incur;
(v) maintain or cause to be maintained, on behalf of the
Company, such books and records of account concerning the Company, the
Operating Partnership and the Hotels as are necessary for the proper
management and control of the assets of the Company, in accordance with
generally accepted accounting practices;
(vi) take all actions necessary to enable the Company to
comply with and abide by in all material respects all applicable laws and
regulations;
(vii) administer the day-to-day operations and perform all
necessary and reasonable administrative and "back office" functions with
respect to the Company, the Operating Partnership, the Hotels and the
Leases, including, but not limited to, collecting rents, paying debts,
depositing funds and investing funds in a manner consistent with the
Company's policies;
(viii) assist the Company in preparing reports to, and meeting
materials for, the Company and its shareholders;
(ix) prepare and deliver to the Company quarterly financial
statements within forty-five (45) days of the end of each fiscal quarter,
year end financial statements within ninety (90) days of the end of the
Company's fiscal year and such schedules, reports summaries and other
information regarding the Company's portfolio as may be requested by the
Company from time to time;
(x) oversee investment due diligence and provide research and
economic and statistical data to support the Company's investment program
and strategies;
(xi) retain and oversee third parties hired to conduct and
provide services to the Company such as development management, project
management, design, construction, investment banking services, property
disposition brokerage services, legal, independent accounting and auditing
services (including, without limitation, such reports and returns as may be
required by any governmental authority in connection with the ordinary
conduct of the Company's business, such as the Securities and Exchange
Commission and the Internal Revenue Service, and any state and local
securities commissions and taxing authorities) and providing tax reviews
and advice, feasibility studies or appraisals, engineering, or
environmental property inspections and consulting services. Such services
may be provided by Affiliates of the Advisor (as defined below) provided
such Affiliates charge the Company no more than the fair market value for
such services and such services are approved by a majority of the Company's
Board of Trustees, including, a majority of the Independent Trustees; it
being understood that certain Affiliates of the Advisor will provide
certain "back office" services such as accounting, human resources, and
review of external consultant reports, as part of the services to be
performed by the Advisor, without additional charge to the Company. For
purposes of this Agreement, "Independent Trustee" shall mean a trustee who,
on the date at issue, is currently serving on the Board of Trustees and is
"independent" as determined by application of the rules and regulations of
the New York Stock Exchange. For purposes of this Agreement, "Affiliate"
means any company or other entity owned or controlled, directly or
indirectly, by Xxxxx Xxxx LaSalle;
(xii) manage the Company's short-term investments, including
the acquisition and sale of money market instruments in accordance with the
Company's policies; and
(xiii) take such other actions and render such other services
as may reasonably be requested by the Company consistent with the purpose
of this Agreement.
3. ADVISOR'S RESOURCES. The Advisor shall, at its expense, maintain
such office space, facilities, equipment and, in accordance with that
certain Employee Lease Agreement dated as of the date hereof (the "Employee
Lease Agreement"), personnel trained and experienced in the business of
acquisitions, financing, investment management and hotel leasing sufficient
to enable the Advisor to fulfill its obligations under this Agreement and
shall provide, at its expense, administrative personnel as necessary to
provide the services herein. The Advisor shall utilize its Affiliates or
unrelated third parties as necessary to supplement such resources
performing the services required by this Agreement.
4. PAYMENT OF EXPENSES. Except as set forth below, in consideration
of the compensation provided under Section 5, the Advisor shall bear all
expenses attributable to the management services to be provided by the
Advisor to the Company hereunder including providing the resources required
by Section 3 above, without separate reimbursement from the Company. The
Advisor, however, shall be reimbursed by the Company for any amounts the
Advisor expends to pay fees and expenses of third parties providing
services to the Company set forth in Section 2(xi) above (including
Affiliates providing services in accordance with 2(xi) above), all other
costs and expenses of third parties relating to the Company's operations,
including costs and expenses of acquiring, owning, protecting, insuring,
maintaining and disposing of the Company's investments, cost and expenses
connected with dividends, interest or other distributions, transfer agents
and registrar fees, costs and expenses associated with investor relations,
costs and expenses associated with the continuous reporting and other
requirements of governmental bodies or agencies, including dissemination of
materials to shareholders, or such other costs and expenses as approved by
a majority of the Company's Board of Trustees, including a majority of the
Company's Independent Trustees.
5. COMPENSATION.
(a) The Company shall pay to the Advisor in cash a base fee (the
"Base Fee"), at the following percentages of annual NOI as defined below,
minus Three Million Dollars ($3,000,000) (the "Reduction Amount") which
such Reduction Amount shall be increased in accordance with the CPI
Adjustment (as defined below). For purposes of this Agreement, "CPI
Adjustment" shall mean the product of (x) the Reduction Amount in effect in
the most recently ended year multiplied by (y) the quotient of (a) the
average CPI (defined below) for the immediately preceding twelve (12)
months immediately preceding the applicable year divided by (b) the average
CPI for the twelve months in the prior year. "CPI" shall mean the
"Consumer Price Index" published by the Bureau of Labor Statistics of the
United States of America Department of Labor, U.S. City Average, All Items
for Urban Wage Earners and Clerical Workers (1982-1984=100).
Incremental NOI
of Company Base Fee %
--------------- ---------------------------------
Up to but
From excluding
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0 $100,000,000 5.0%
$100,000,000 $225,000,000 An additional 4.8% on such increment
$225,000,000 $350,000,000 An additional 4.6% on such increment
$350,000,000 $475,000,000 An additional 4.4% on such increment
$475,000,000 $600,000,000 An additional 4.2% on such increment
$600,000,000
and any excess An additional 4.0% on such increment
For purposes of this Agreement, "NOI" for any period shall mean total
revenues (excluding gains or losses from the sale of Company assets, or any
refinancings thereof) applicable to such period, less the operating
expenses applicable to such period (excluding from such expenses (i)
advisory fees payable hereunder to the Advisor, (ii) lease payments payable
to the Advisor under the Employee Lease Agreement, and (iii) excluding
amounts attributable to depreciation and amortization, or reserves for bad
debts or other similar non-cash items or reserves) after adjustment for
unconsolidated partnerships and joint ventures and before adjustment for
minority interests in the Operating Partnership.
The Base Fee shall be payable quarterly on an estimated basis, in
arrears within 45 days of the end of each fiscal quarter. Within ten days
after the Company has received its audited financial statements for the
prior year, the Company shall make a final determination of the Base Fee
for such prior year, and the Company shall pay any deficiency or deduct any
over-payment made to the Advisor for such year from the next payment or
payments due to the Advisor pursuant to this Agreement.
(b) For the Calendar Year ending December 31, 2000, and for each
Calendar Year thereafter, the Company shall pay to the Advisor annually in
arrears an incentive fee (the "Incentive Fee") in an amount equal to 25% of
the product of (A) the amount by which the FFO per Share Amount for the
calendar year then ended (the "Measurement Year") exceeds a growth rate of
7% per annum of the FFO per Share Amount for the prior calendar year and
(B) the Shares Outstanding for the Measurement Year. The Incentive Fee
shall be deemed to have been earned as of the end of the Management Year
and shall be paid as set forth below upon determination of the FFO per
share for the Management Year. For fees payable for any year in which fees
are not payable for the entire calendar year, the fees shall be calculated
as if this Agreement had been in effect for the entire year, but shall be
pro rated and payable for only that portion of the year this Agreement was
in effect.
For purposes of this Agreement, "Funds from Operations" shall mean
the Company's net income (loss) (computed in accordance with generally
accepted accounting principles ("GAAP")), excluding gains (or losses) from
debt restructuring and sales of property, plus real estate related
depreciation and amortization and after adjustments for unconsolidated
partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures will be calculated to reflect Funds from
Operations on the same basis.
"FFO per Share Amount" means an amount equal to the Funds from
Operations divided by the Shares Outstanding.
"Shares Outstanding" means, for purposes of calculating the FFO per
Share Amount, the weighted average number of shares of beneficial interests
of the Company (the "Shares") outstanding (as determined by GAAP),
including any beneficial interests in the Operating Partnership (the
"Units"), for the period such calculation is made; provided, however, that
appropriate equitable adjustments shall be made when calculating the FFO
per Share Amount in the event of any extraordinary transactions such as
stock splits, stock dividends, etc.
Payment of the Incentive Fee shall be made by the Operating
Partnership, at the option of the Advisor, in Cash, Shares or Units (with
one Unit convertible into one Share) unless and to the extent, receipt of
Shares would adversely affect the Company's status as a REIT, in which such
event the Advisor shall receive Units. The number of Shares or Units shall
be the nearest whole number of Shares or Units, as the case may be,
obtained by dividing the Incentive Fee by the average closing price of the
Shares on the New York Stock Exchange (or such other exchange or national
market system on which the Shares are then traded) for the Measurement
Year. Any such Shares or Units shall not be transferable, other than to
Affiliates of the Advisor, except by operation of law for a period of one
year from the date of issuance.
(c) The Company shall purchase Officers and Trustees (or Directors)
insurance in reasonably acceptable and customary levels for the Officers
and Trustees of the Company and Officers and Directors of the Advisor.
Such policy shall constitute primary coverage for the individuals covered
thereby for their activities relating to the Company and the Advisor.
(d) Nothing in this Agreement shall preclude or restrict the
Company from the direct acquisition of Hotels or the negotiation and
execution of Leases without the assistance of the Advisor.
6. REIT STATUS. Notwithstanding anything in this Agreement to the
contrary, the Advisor shall not take any action which would (a) adversely
affect the status of the Company as a REIT, (b) subject the Company to
regulation under the Investment Company Act of 1940, as amended or (c)
violate any law, rule, regulation or policy of any governmental body or
agency having jurisdiction over the Company or otherwise prohibited by the
Company's Declaration of Trust, its Bylaws or resolutions of the Board of
Trustees all as in effect from time to time. In the event the Company
authorizes or directs the Advisor to take any actions which, in the
judgment of the Advisor would violate any of the foregoing, the Advisor
shall so advise the Company in writing specifying the basis for its
position and shall take no further action with respect to such matters
unless and until it receives clarification and instructions from the Board
of Trustees.
7. LIMITATION OF LIABILITY AND INDEMNIFICATION OF ADVISOR.
7.1 Limitation on Liability.
The Advisor shall have no responsibility other than to render the
services and take the actions described herein in good faith and with the
exercise of due care and shall not be responsible for any action of the
Board of Trustees in following or declining to follow any advice or
recommendation of the Advisor. The Advisor, except by reason of its own
gross negligence, bad faith or willful misconduct, shall not be liable for
any action taken, omitted or suffered to be taken by it in good faith and
believed by it to be authorized or within its discretion or rights or
powers conferred upon it by this Agreement or in reliance upon the written
opinion of counsel of recognized expertise.
7.2 Indemnification.
(a) The Company shall reimburse, indemnify and hold harmless the
Advisor and its partners, directors, officers, stockholders, agents and
employees and each other person or entity, if any, controlling the Advisor
(an "Indemnified Party"), to the full extent lawful, from and against any
and all losses, claims, damages or liabilities of any nature whatsoever
with respect to or arising from any acts or omission of the Advisor
(including ordinary negligence) in its capacity as such, except with
respect to losses, claims, damages or liabilities with respect to or
arising out of the Advisor's gross negligence, bad faith or willful
misconduct.
Notwithstanding the indemnification provisions in Section 7.2(a)
above, indemnification will not be allowed for any liability imposed by
judgment, and costs associated therewith, including attorneys' fees,
arising from or out of a violation of state or federal securities laws
associated with the offer and sale of Company shares. Indemnification will
be allowed for settlements and related expenses of lawsuits alleging
securities law violations, and for expenses incurred in successfully
defending such lawsuits, provided that a court either (i) approves the
settlement and finds that indemnification of the settlement and related
costs should be made, or (ii) approves indemnification of litigation costs
if a successful defense is made. If indemnification is unavailable as a
result of this Section 7.2(a), the Company shall contribute to the
aggregate losses, claims, damages or liabilities to which the Advisor or
its partners, officers, directors, agents, employees or controlling persons
may be subject in such amount as is appropriate to reflect the relative
benefits received by each of the Company and the party seeking contribution
on the one hand and the relative faults of the Company and party seeking
contribution on the other, as well as any other relevant equitable
considerations.
(b) Promptly after receipt by an Indemnified Party of notice of the
commencement of any action, such Indemnified Party shall, if a claim in
respect thereof is to be made against the Company, notify the Company in
writing of the commencement thereof; but the omission to so notify the
Company shall not relieve it from any liability that it may have to any
Indemnified Party pursuant to this Section 7.2. In case any such action
shall be brought against an Indemnified Party and it shall notify the
Company of the commencement thereof, the Company shall be entitled to
participate therein and, to the extent that it shall wish, to assume the
defense thereof, with counsel satisfactory to such Indemnified Party and,
after notice from the Company to such Indemnified Party of its election to
assume the defense thereof, the Company shall not be liable to such
Indemnified Party under Section 7.2(a) hereof for any legal expenses of
other counsel or any of the expenses, in each case subsequently incurred by
such Indemnified Party, unless (i) the Company and the Indemnified Party
shall have mutually agreed to the retention of such counsel or, (ii) the
named parties to any such proceeding (including any impleaded parties)
include both the Company and Indemnified Party and representation of both
parties by the same counsel would be inappropriate in the reasonable
opinion of the Indemnified Party, due to actual or potential differing
interests between them.
The obligations of the Company under this Section 7.2 shall be in
addition to any liability which the Company otherwise may have.
8. BOOKS AND RECORDS. All books and records compiled by the Advisor
in the course of discharging its responsibilities under this Agreement
shall be the property of the Company and shall be delivered by the Advisor
to the Company immediately upon any termination of this Agreement and
regardless of the grounds for such termination (including, but not limited
to, a breach by the Company of this Agreement); provided, however, that the
Advisor shall have reasonable access to such books and records to the
extent reasonably necessary in connection with the conduct of its services
hereunder. The Advisor shall not maintain or assert any lien against or
upon any of the books and records and all such books and records concerning
the Hotels and/or the Leases. If requested by the Company, the Advisor
shall maintain records including, but not limited to (a) pro-rated costs
(including salaries, commissions, bonuses and benefits) of personnel
employed by the Advisor and who are involved in the acquisition, and
administrative process related to the acquisitions of Hotels which are
identified by the Advisor and acquired by the Company during the term of
this Agreement (the "Acquisition Process"); (b) all costs of fees, taxes
and assessments applicable to the Acquisition Process; (c) travel, lodging
and entertainment expenses related to the Acquisition Process and (d) other
general and administrative expenses, including expenses for administrative
personnel relating to the Acquisition Process;
9. TERM AND TERMINATION.
(a) This Agreement shall become effective upon the Effective Date
and shall be automatically extended for successive one year terms
thereafter without further action by either the Company or the Advisor
unless earlier terminated, as provided herein. This Agreement shall be
automatically renewed for additional one (1) year terms unless either party
gives written notice to the other party of termination 180 days prior to
the expiration of the then current term.
(b) The Company also may, at any time, terminate this Agreement:
(i) immediately upon providing written notice to the Advisor
if the Advisor is determined by unanimous vote of all Independent Trustees
of the Company, taken after at least fourteen (14) days prior written
notice to the Advisor of such vote, to have committed an act of actual
fraud, willful malfeasance, or gross negligence relating to its duties and
responsibilities under this Agreement or a material breach by the Advisor
of its obligations under this Agreement which is not remedied in a
reasonable period of time after receipt of written notice from the
Independent Trustees specifying such breach;
(ii) upon written notice effective immediately, given not
earlier than thirty (30) days after the Advisor shall (A) authorize or
agree to the commencement of a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency, receivership or other similar law
now or hereafter in effect or the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, (B) make a general assignment for the benefit of its
creditors, or (C) have an involuntary or other proceeding commenced against
it seeking liquidation, reorganization or other relief with respect to it
or its debts under any bankruptcy, insolvency or other similar law now or
thereafter in effect, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period exceeding sixty (60) days.
(c) This Agreement shall automatically terminate upon termination
of the Employee Lease Agreement.
(d) Either the Advisor or the Company may terminate this Agreement,
upon five (5) days prior notice to the other party hereto, upon any Change
of Control (hereinafter defined) of the Company. "Change of Control" for
the purposes hereof means, with respect to the Company and subject to the
last sentence of this paragraph, any transaction or series of transactions
resulting in a change in the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
the Company, whether through ownership of voting securities, by contract or
otherwise. Notwithstanding anything to the contrary herein, no Change of
Control of the Company shall be deemed to occur as the result of sales in
the ordinary course of shares of stock (or certificates of trust) in any
entity whose stock, or certificates of trust are traded publicly.
(e) Upon any termination of this Agreement by the Company, the
Advisor shall, upon the Company's request, cooperate with and assist the
Company in finding a new entity to act as advisor to the Company and in
assisting the Company with the transition process.
10. NOTICES. Any notices, instructions or other communications
required or contemplated by this Agreement shall be deemed to have been
properly given and to be effective upon delivery if delivered in person or
sent by telecopier or upon receipt if sent by courier service.
All such communications to the Company shall be addressed as follows:
LaSalle Hotel Properties
0000 Xxxxxxxxxx Xxxx
Xxxxx X00
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
With a copy to:
Xxxxx & Wood LLP
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopier: (000) 000-0000
All such communications to the Advisor shall be addressed as follows:
LaSalle Hotel Advisors, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxx X00
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
With copies to:
Xxxxx & Associates
000 Xxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: X.X. Xxxxx
Telecopier: (000) 000-0000
and;
Xxxxx Lang LaSalle
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
Either party hereto may designate a different address by written
notice to the other party delivered in accordance with this Section 10.
11. DELEGATION OF RESPONSIBILITIES. Notwithstanding anything
contained herein to the contrary, the Advisor may delegate any and all of
its responsibilities and obligations under this Agreement to its
Affiliates. Any delegation of responsibilities by the Advisor shall not be
inconsistent with any express instructions of the Board of Trustees; shall
not cause the Company to incur any financial responsibility to the delegee
except to the extent specifically permitted under Section 4 and shall not
relieve the Advisor of its obligations to the Company with respect to the
responsibilities delegated and with respect to which delegated
responsibilities the Advisor shall remain liable to the Company.
12. NONCOMPETE AGREEMENT. The Advisor and its Affiliates shall not
invest directly or indirectly or on behalf of others in any hotel
properties in the United States (the "Competitive Hotels"), other than
through the Company except for the excluded properties set forth in Exhibit
A hereto and except for hotels constituting part of a mixed-use property
where less than 40% of the property's NOI is attributable to the hotel.
Notwithstanding the foregoing, no Affiliate shall be restricted from
acquiring interests directly or indirectly, in Competitive Hotels or
providing asset management services with respect to Competitive Hotels to
the extent that such Affiliate (i) is a Registered Investment Advisor under
the Investment Advisors Act of 1940 and makes such acquisition or gives
such advice in the ordinary course of management activities for securities
investments, (ii) acquires a company or other entity which owns or provides
asset management services with respect to Competitive Hotels, provided (a)
it is not a material activity of such company or entity, (b) such company
or entity does not engage in activities relating to additional Competitive
Hotels, after such acquisition, and (c) the Advisor maintains a "Chinese
wall" between employees of the Advisor and those of such company or entity
with respect to such activities, or (iii) invests in debt or debt
securities, including debt or debt securities which have equity components,
to the extent the intention of such Affiliate at the time such investment
was made was not to exercise its rights to directly hold such equity or
(iv) is engaged in financing, disposition, consulting, development
management or facility related (e.g., accounting or engineering) services
with respect to Competitive Hotels. For purposes of this Agreement,
"material" shall mean twenty percent (20%) of the company's activities.
13. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ADVISOR. The
Advisor represents and warrants to, and covenants and agrees with, the
Company as follows:
(a) The Advisor, taking into account its own personnel and
the personnel available to it through its Affiliates, has access to
personnel trained and experienced in the business of acquisitions, leasing
of hotels asset management, financing, and the ownership and dispositions
of hotels, and such other areas as may be necessary and sufficient to
enable the Advisor to perform its obligations under this Agreement.
(b) The Advisor shall comply with all laws, rules,
regulations and ordinances applicable to the performance of its obligations
under this Agreement.
(c) Neither the Advisor nor any of its Affiliates is party to
or otherwise bound by or, during the term of this Agreement (including any
extension thereof), will become party to or otherwise bound by, any
agreement that would restrict or prevent (i) except as set forth on Exhibit
A attached hereto, the Advisor from performing any obligation contemplated
by this Agreement or (ii) the Company from operating its business as
proposed to be conducted, including, without limitation, acquiring any
Hotel in any geographic market in the United States or any foreign country.
14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
regard to the conflict of laws principals thereof.
15. ENTIRE AGREEMENT. This Agreement reflects the entire
understanding of the parties hereto with respect to the subject matter
hereof and supersedes and replaces all agreements between the Company and
the Advisor with respect to the subject matter hereof.
16. RELATIONSHIP OF PARTIES. The parties intend that the Advisor
shall act as an independent contractor in performing services for the
Company hereunder. Nothing contained herein is intended to, or shall be
construed to, constitute the Advisor as a partner, joint venturer or agent
of the Company.
17. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the parties to this Agreement and their
respective successors and permitted assigns, and no other person or entity
shall acquire or have any right under, or by virtue of, this Agreement.
The Company shall be entitled to assign this Agreement to any successor to
all or substantially all of its assets, rights and/or obligations; the
Advisor shall have the right to assign this Agreement to any Affiliate (as
such term is defined in Section 12).
18. AMENDMENT, MODIFICATIONS AND WAIVER. This Agreement hereto
shall not be altered or otherwise amended in any respect, except pursuant
to an instrument in writing signed by the parties hereto. The waiver by a
party of a breach of any provisions of this Agreement shall not operate or
be construed as a waiver of any subsequent breach.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, and all of
which shall constitute one and the same agreement.
(SIGNATURES ARE ON THE NEXT PAGE)
* * * * *
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first above written.
LASALLE HOTEL PROPERTIES
By: /s/ Xxxx Xxxxx
------------------------------
Name: Xxxx Xxxxx
Title: Chief Financial Officer
LASALLE HOTEL
OPERATING PARTNERSHIP, L.P.
By: LASALLE HOTEL PROPERTIES
its general partner
By: /s/ Xxxx Xxxxx
------------------------------
Name: Xxxx Xxxxx
Title: Chief Financial Officer
LASALLE HOTEL ADVISORS, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
EXHIBIT A
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PROJECT
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Hotel Nikko,
San Francisco, CA
Xxxxxxx Xxxxxxx,
Orlando, FL
Greensboro Hilton Hotel,
Greensboro, NC
Holiday Inn on the Hill,
Washington, D.C.
The Xxxxxxxx Xxxxxx,
San Antonio, TX
The Radisson Charlotte Hotel,
Charlotte, NC
EMPLOYEE LEASE AGREEMENT
------------------------
THIS EMPLOYEE LEASE AGREEMENT (this "Agreement"), is dated as of
January 1, 2000 (the "Effective Date") by and between LASALLE HOTEL
PROPERTIES, a Maryland real estate investment trust (the "Company"), and
LASALLE HOTEL ADVISORS, INC., a Maryland corporation (the "Lessor").
WHEREAS, the Company through its interest in LaSalle Hotel Operating
Partnership, L.P. (the "Operating Partnership"), is in the business of
acquiring, developing, managing, owning and disposing of hotels (the
"Hotels") and leasing the Hotels to qualified lessees (the "Hotel Lessees")
pursuant to participating leases (the "Leases") (for purposes hereof unless
the context otherwise requires, the term "Company" shall include the
Company and the Operating Partnership); and
WHEREAS, the Company is qualified, and intends in the future to
qualify, as a Real Estate Investment Trust (a "REIT") under the Internal
Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the Company desires to lease any or all of the employees of
the Lessor, including, without limitation, administrative personnel (each
an "Employee" and collectively, the "Employees") for the purpose of the
acquisition, leasing, investment management, financing, ownership and
disposition of the Hotels on the terms set forth herein and consistent with
the Company's initial and continued qualification and operation in
accordance with all requirements applicable to a REIT; and
WHEREAS, the Lessor is willing to lease such Employees to the Company
on the terms set forth herein;
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. LEASE OF EMPLOYEES. The Company hereby leases the Employees on
the terms hereinafter set forth, and the Lessor hereby accepts such lease.
The Company shall provide Notice from time to time, in accordance with the
provisions of Section 8 hereof, of the names of the Employees which the
Company elects to lease in accordance with the terms hereof.
2. LESSOR'S RESOURCES. The Lessor shall, at its expense, maintain
such office space, facilities, equipment and, subject to the provisions of
Section 6, below, personnel trained and experienced in the business of
acquisitions, financing, investment management and hotel leasing, together
with administrative personnel, sufficient to enable the Lessor to fulfill
its obligations under this Agreement.
3. PAYMENT OF EXPENSES. Except as set forth below, in consideration
of the compensation provided under Section 4, the Lessor shall bear all
expenses, including, without limitation, payroll, unemployment, social
security, and all similar taxes, attributable to the Employees hereunder
without separate reimbursement from the Company.
4. COMPENSATION.
(a) The Company shall pay to the Lessor in cash a lease payment (the
"Lease Payment"), of Three Million Dollars ($3,000,000) which shall be
increased annually in accordance with the CPI Adjustment (as defined
below).
For purposes of this Agreement, "CPI Adjustment" shall mean the
product of (x) the Lease Payment in effect in the most recently ended year
multiplied by (y) the quotient of (a) the average CPI (defined below) for
the immediately preceding twelve (12) months immediately preceding the
applicable year divided by (b) the average CPI for the twelve months in the
prior year. "CPI" shall mean the "Consumer Price Index" published by the
Bureau of Labor Statistics of the United States of America Department of
Labor, U.S. City Average, All Items for Urban Wage Earners and Clerical
Workers (1982-1984=100).
The Lease Payment shall be for the purposes of compensating Lessor
for the expenses set forth in Section 3 above, together with an
administrative fee to the Lessor. The Lease Payment shall be payable
quarterly in advance within 45 days of the beginning of each fiscal
quarter.
5. REIT STATUS. Notwithstanding anything in this Agreement to the
contrary, the Lessor shall not take any action which would (a) adversely
affect the status of the Company as a REIT, (b) subject the Company to
regulation under the Investment Company Act of 1940, as amended or (c)
violate any law, rule, regulation or policy of any governmental body or
agency having jurisdiction over the Company or otherwise prohibited by the
Company's Declaration of Trust, its Bylaws or resolutions of the Board of
Trustees all as in effect from time to time. In the event the Company
authorizes or directs the Lessor to take any actions which, in the judgment
of the Lessor would violate any of the foregoing, the Lessor shall so
advise the Company in writing specifying the basis for its position and
shall take no further action with respect to such matters unless and until
it receives clarification and instructions from the Board of Trustees.
6. EMPLOYEES.
(a) Throughout the term of this Agreement, subject to the provisions
of subsection (c) below, the Company shall have the exclusive right to
determine:
(i) the employment and termination of any and all Employees;
(ii) the nature and scope of each Employee's employment,
including, without limitation, training, location of employment, and the
procedures for completing relevant work assignments;
(iii) the number of stock options with respect to shares of the
common stock of the Company (the "Options"), if any, the Company will grant
to the Employees and the date and conditions upon which any such Options
will vest; and
(iv) the compensation to be paid to each Employee.
(b) Throughout the term of this Agreement, the Company shall permit
the Employees to participate in the Company's employee benefit plans, if
any, on the same basis as other comparable employees of the Company.
(c) Notwithstanding the provisions of subsection (a), above, to the
contrary, Lessor shall have the non-exclusive right, upon prior written
approval of the Company which such approval shall not be unreasaonably
withheld, to take such actions and made such determinations as set forth in
subsections (a)(i) and (a)(ii) above.
(d) (i) Lessor shall protect, indemnify and hold harmless Company
and any of its successors or assigns with respect to this Agreement
(collectively, the "Company Indemnitees" and, individually, a "Company
Indemnitee") for, from and against any and all debts, liens, claims, causes
of action, administrative orders or notices, costs, fines, penalties or
expenses (including, without limitation, reasonable attorney's fees and
expenses) imposed upon, incurred by or asserted against any Company
Indemnitee resulting from, either directly or indirectly, any claims by an
Employee arising through the termination, release or similar action with
respect to such Employee, whether with or without cause, which such action
was made at the direction of Lessor. Upon notice from Company and any
other of the Company Indemnitees, Lessor shall undertake the defense (with
counsel reasonably acceptable to Company), at Lessor's sole cost and
expense, of any indemnification duties set forth herein. Lessor shall,
upon demand, pay to Company any cost, expense, loss or damage (including,
without limitation, reasonable attorneys' fees) incurred by Company and
arising under this Section, which amounts shall bear interest from the date
ten (10) days after written demand therefor is given to Lessor until paid
by Lessor to Company. The provisions of this Section shall survive the
expiration or sooner termination of this Agreement.
(ii) Company shall protect, indemnify and hold harmless Lessor
and any of its successors or assigns with respect to this Agreement
(collectively, the "Lessor Indemnitees" and, individually, an "Lessor
Indemnitee") for, from and against any and all debts, liens, claims, causes
of action, administrative orders or notices, costs, fines, penalties or
expenses (including, without limitation, reasonable attorney's fees and
expenses) imposed upon, incurred by or asserted against any Lessor
Indemnitee resulting from, either directly or indirectly, any claims by an
Employee arising through the termination, release or similar action with
respect to such Employee, whether with or without cause, which such action
was made at the direction of Company. Upon notice from Lessor and any
other of the Lessor Indemnitees, Company shall undertake the defense (with
counsel reasonably acceptable to Lessor), at Company's sole cost and
expense, of any indemnification duties set forth herein. Company shall,
upon demand, pay to Lessor any cost, expense, loss or damage (including,
without limitation, reasonable attorneys' fees) incurred by Lessor and
arising under this Section, which amounts shall bear interest from the date
ten (10) days after written demand therefor is given to Company until paid
by Company to Lessor. The provisions of this Section shall survive the
expiration or sooner termination of this Agreement.
7. TERM AND TERMINATION.
(a) This Agreement shall become effective upon the Effective Date
and shall be automatically extended for successive one year terms
thereafter without further action by either the Company or the Lessor
unless earlier terminated, as provided herein. This Agreement shall be
automatically renewed for additional one (1) year terms unless either party
gives written notice to the other party of termination 180 days prior to
the expiration of the then current term.
(b) The Company also may, at any time, terminate this Agreement:
(i) immediately upon providing written notice to the Lessor
if the Lessor is determined by unanimous vote of all Independent Trustees
(as such term is defined in the Advisory Agreement) of the Company, taken
after at least fourteen (14) days prior written notice to the Lessor of
such vote, to have committed an act of actual fraud, willful malfeasance,
or gross negligence relating to its duties and responsibilities under this
Agreement or a material breach by the Lessor of its obligations under this
Agreement which is not remedied in a reasonable period of time after
receipt of written notice from the Independent Trustees specifying such
breach;
(ii) upon written notice effective immediately, given not
earlier than thirty (30) days after the Lessor shall (A) authorize or agree
to the commencement of a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency, receivership or other similar law
now or hereafter in effect or the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it
or any substantial part of its property, (B) make a general
assignment for the benefit of its creditors, or (C) have an involuntary or
other proceeding commenced against it seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or thereafter in effect, and such
involuntary case or other proceeding shall remain undismissed and unstayed
for a period exceeding sixty (60) days.
(c) Upon any termination of this Agreement by the Company, the
Lessor shall, upon the Company's request, cooperate with and assist the
Company in finding a new entity to act as lessor to the Company and in
assisting the Company with the transition process.
(d) This Agreement shall automatically terminate upon termination of
the Advisory Agreement.
8. NOTICES. Any notices, instructions or other communications
required or contemplated by this Agreement shall be deemed to have been
properly given and to be effective upon delivery if delivered in person or
sent by telecopier or upon receipt if sent by courier service.
All such communications to the Company shall be addressed as follows:
LaSalle Hotel Properties
0000 Xxxxxxxxxx Xxxx
Xxxxx X00
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
With a copy to:
Xxxxx & Wood LLP
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopier: (000) 000-0000
All such communications to the Lessor shall be addressed as follows:
LaSalle Hotel Advisors, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxx X00
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
With copies to:
Xxxxx & Associates
000 Xxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: X.X. Xxxxx
Telecopier: (000) 000-0000
and;
Xxxxx Lang LaSalle
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
Either party hereto may designate a different address by written
notice to the other party delivered in accordance with this Section 8.
9. DELEGATION OF RESPONSIBILITIES. Notwithstanding anything
contained herein to the contrary, the Lessor may delegate any and all of
its responsibilities and obligations under this Agreement to any company or
other entity owned or controlled, directly or indirectly, by Xxxxx Lang
LaSalle (collectively, an "Affiliate"). Any delegation of responsibilities
by the Lessor shall not be inconsistent with any express instructions of
the Board of Trustees (as such term is defined in the Advisory Agreement)
of the Company shall not cause the Company to incur any financial
responsibility to the delegee other than as expressly set forth herein, and
shall not relieve the Lessor of its obligations to the Company with respect
to the responsibilities delegated and with respect to which delegated
responsibilities the Lessor shall remain liable to the Company.
10. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE LESSOR. The
Lessor represents and warrants to, and covenants and agrees with, the
Company as follows:
(a) The Lessor, taking into account its own personnel and the
personnel available to it through its Affiliates, has access to personnel
trained and experienced in the business of acquisitions, leasing of hotels
asset management, financing, and the ownership and dispositions of hotels,
and such other areas as may be necessary and sufficient to enable the
Lessor to perform its obligations under this Agreement.
(b) The Lessor shall comply with all laws, rules, regulations
and ordinances applicable to the performance of its obligations under this
Agreement.
(c) Neither the Lessor nor any of its Affiliates is party to
or otherwise bound by or, during the term of this Agreement (including any
extension thereof), will become party to or otherwise bound by, any
agreement that would restrict or prevent (i) except as set forth on Exhibit
A attached hereto, the Lessor from performing any obligation contemplated
by this Agreement or (ii) the Company from operating its business as
proposed to be conducted, including, without limitation, acquiring any
Hotel in any geographic market in the United States or any foreign country.
(d) Neither the Lessor nor any Affiliates thereof shall grant
any options for the purchase of securities to the Employees with respect to
services provided to the Company.
11. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
regard to the conflict of laws principals thereof.
12. ENTIRE AGREEMENT. This Agreement reflects the entire
understanding of the parties hereto with respect to the subject matter
hereof and supersedes and replaces all agreements between the Company and
the Lessor with respect to the subject matter hereof.
13. RELATIONSHIP OF PARTIES. The parties intend that the Lessor
shall act as an independent contractor. Nothing contained herein is
intended to, or shall be construed to, constitute the Lessor as a partner,
joint venturer or agent of the Company.
14. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the parties to this Agreement and their
respective successors and permitted assigns, and no other person or entity
shall acquire or have any right under, or by virtue of, this Agreement.
The Company shall be entitled to assign this Agreement to any successor to
all or substantially all of its assets, rights and/or obligations; the
Lessor shall have the right to assign this Agreement to any Affiliate.
15. AMENDMENT, MODIFICATIONS AND WAIVER. This Agreement hereto
shall not be altered or otherwise amended in any respect, except pursuant
to an instrument in writing signed by the parties hereto. The waiver by a
party of a breach of any provisions of this Agreement shall not operate or
be construed as a waiver of any subsequent breach.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, and all of
which shall constitute one and the same agreement.
17. THIRD-PARTY BENEFICIARIES. Nothing contained herein is, or
shall be deemed to be, intended to create any third-party beneficiaries,
and the provisions herein shall be for the benefit of the Company, Lessor
and their permitted successors and assigns, and shall not inure to the
benefit of third-parties.
(SIGNATURES BEGIN ON THE NEXT PAGE)
* * * * *
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first above written.
LASALLE HOTEL PROPERTIES
By: /s/ Xxxx Xxxxx
------------------------------
Name: Xxxx Xxxxx
Title: Chief Financial Officer
LASALLE HOTEL
OPERATING PARTNERSHIP, L.P.
By: LASALLE HOTEL PROPERTIES
its general partner
By: /s/ Xxxx Xxxxx
------------------------------
Name: Xxxx Xxxxx
Title: Chief Financial Officer
LASALLE HOTEL ADVISORS, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
