EXHIBIT (10)(i)
---------------
STOCK PURCHASE AGREEMENT
AMONG
LASALLE HOTEL OPERATING PARTNERSHIP, L.P.
AS BUYER
AND
LASALLE HOTEL CO-INVESTMENT, INC.
LPI CHARITIES
AND
LASALLE HOTEL PROPERTIES
AS SELLERS
DATED AS OF JULY 28, 2000
TABLE OF CONTENTS
PAGE
----
STOCK PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . 1
1. SALE AND PURCHASE OF SHARES . . . . . . . . . . . . . 1
1.1. Sale and Purchase of Shares. . . . . . . . . 1
1.2. Closing. . . . . . . . . . . . . . . . . . . 1
2. REPRESENTATIONS AND WARRANTIES OF THE SELLERS . . . . 1
2.1. Ownership of Shares. . . . . . . . . . . . . 1
2.2. Authorization; Binding Obligation. . . . . . 2
2.3. No Conflict; Absence of Violation. . . . . . 2
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . 2
3.1. Organization and Good Standing . . . . . . . 2
3.2. Certificate of Incorporation and Bylaws. . . 2
3.3. Capital Structure of the Company . . . . . . 3
3.4. No Conflict; Absence of Violation. . . . . . 3
3.5. No Undisclosed Liabilities . . . . . . . . . 3
3.6. Taxes. . . . . . . . . . . . . . . . . . . . 3
3.7. Title to Property and Assets; Liens. . . . . 4
3.8. Agreements; Action . . . . . . . . . . . . . 4
3.9. Debt Instruments . . . . . . . . . . . . . . 4
3.10. Books and Records. . . . . . . . . . . . . . 4
3.11. Litigation; Disputes . . . . . . . . . . . . 4
3.12. Absence of Employees . . . . . . . . . . . . 4
3.13. Compliance with Law; Approvals . . . . . . . 4
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER . . . . . 5
4.1. Organization and Standing;
Binding Obligation . . . . . . . . . . . . . 5
4.2. Authorization. . . . . . . . . . . . . . . . 5
4.3. No Registration Under the Securities Act . . 5
4.4. Acquisition for Investment . . . . . . . . . 6
4.5. Evaluation of Merits and Risks
of Investment. . . . . . . . . . . . . . . . 6
4.6. Additional Information . . . . . . . . . . . 6
5. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION
TO CLOSE. . . . . . . . . . . . . . . . . . . . . . . 6
5.1. Representations and Warranties to be True
and Correct. . . . . . . . . . . . . . . . . 6
5.2. Performance. . . . . . . . . . . . . . . . . 6
5.3. No Adverse Change in Law . . . . . . . . . . 7
5.4. All Proceedings to be Satisfactory . . . . . 7
5.5. Supporting Documents . . . . . . . . . . . . 7
5.6. Consents . . . . . . . . . . . . . . . . . . 7
6. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION
TO CLOSE. . . . . . . . . . . . . . . . . . . . . . . 7
6.1. Capital Account Distribution . . . . . . . . 7
6.2. Retained Earnings Distribution . . . . . . . 7
6.3. Representations and Warranties to be
True and Correct . . . . . . . . . . . . . . 8
6.4. Consents . . . . . . . . . . . . . . . . . . 8
7. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
REMEDIES. . . . . . . . . . . . . . . . . . . . . . . 8
7.1. Survival of Representations. . . . . . . . . 8
7.2. General Indemnity. . . . . . . . . . . . . . 8
8. COVENANTS . . . . . . . . . . . . . . . . . . . . . . 8
8.1. Best Efforts . . . . . . . . . . . . . . . . 8
8.2. Additional Payment/ Rebate Amount. . . . . . 9
8.3. Confidentiality. . . . . . . . . . . . . . . 9
9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . 9
9.1. Additional Actions and Documents . . . . . . 9
9.2. No Brokers . . . . . . . . . . . . . . . . . 9
9.3. Jury Waiver. . . . . . . . . . . . . . . . . 9
9.4. Publicity. . . . . . . . . . . . . . . . . . 10
9.5. Expenses . . . . . . . . . . . . . . . . . . 10
9.6. Assignment . . . . . . . . . . . . . . . . . 10
9.7. Entire Agreement; Amendment. . . . . . . . . 10
9.8. Waiver . . . . . . . . . . . . . . . . . . . 10
9.9. Severability . . . . . . . . . . . . . . . . 10
9.10. Governing Law. . . . . . . . . . . . . . . . 11
9.11. Notices. . . . . . . . . . . . . . . . . . . 11
9.12. Headings . . . . . . . . . . . . . . . . . . 12
9.13. Execution in Counterparts. . . . . . . . . . 12
9.14. Binding Effect . . . . . . . . . . . . . . . 12
SCHEDULE I . . . . . . . . . . . . . . . . . . . . . . I-1
SCHEDULE II . . . . . . . . . . . . . . . . . . . . . . II-1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Purchase Agreement") is entered
into as of July 28, 2000 by and among LaSalle Hotel Operating Partnership,
L.P., a Delaware limited partnership ("Buyer"), and LaSalle Hotel Co-
Investment, Inc., a Maryland corporation ("Hotel Co-Investment"), LPI
Charities, an Illinois charitable corporation ("LPI") and LaSalle Hotel
Properties, a Maryland real estate investment trust ("LHO" and collectively
with Hotel Co-Investment and LPI, the "Sellers").
WHEREAS, the Sellers desire to sell, and the Buyer desires to
purchase, all of the issued and outstanding shares (the "Shares") of
capital stock of LaSalle Hotel Lessee, Inc., an Illinois corporation (the
"Company"), for the consideration and on the terms set forth in this
Purchase Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto
intending to be legally bound agree as follows:
1. SALE AND PURCHASE OF SHARES
1.1. Sale and Purchase of Shares
(a) SHARES. Subject to the terms and conditions of this
Purchase Agreement, at the Closing (as defined herein), the Sellers will
sell and transfer the Shares to the Buyer, and the Buyer will purchase the
Shares from the Sellers.
(b) PURCHASE AMOUNT. The purchase price to be paid by the
Buyer to the Sellers (the "Purchase Price") for the Shares shall equal
$500,000 allocated among the Sellers as specified in Schedule I hereto.
1.2. CLOSING
The purchase and sale (the "Closing") provided for in this
Purchase Agreement will take place at the offices of the Buyer's counsel,
▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at
10:00 a.m., New York City time, on January 1, 2001, or at such other time
and place as the parties may agree. At the Closing, each of the Sellers
shall deliver to the Buyer certificates representing the Shares, duly
endorsed (or accompanied by duly executed stock powers) for transfer to the
Buyer. As payment in full for the Shares being purchased by it at the
Closing, and against delivery of the stock certificates, on the Closing
Date the Buyer shall deliver to the Sellers either (x) promissory notes,
payable on demand, to each Seller, or (y) wire transfers of immediately
available funds to bank accounts designated by the Sellers the Purchase
Price.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers, individually, with respect to themselves,
represents and warrants to the Buyer on the date hereof and on the Closing
Date as follows:
2.1. OWNERSHIP OF SHARES
Sellers are and will be on the Closing Date the record and beneficial
owners and holders of the Shares, free and clear of all encumbrances.
Hotel Co-Investment owns 45.5 Shares, LPI owns 45.5 Shares and LHO owns 9
Shares. No Seller is a party to any agreement affecting or relating to the
voting, issuance, purchase, redemption, repurchase, transfer or
registration for sale under the Securities Act of 1933, as amended (the
"Securities Act"), of any securities of the Company, except as contemplated
hereunder.
2.2. AUTHORIZATION; BINDING OBLIGATION
(a) This Purchase Agreement constitutes the legal, valid and
binding obligation of the Sellers and, when executed and delivered by the
Sellers, will be enforceable in accordance with its terms (except as
enforceability may be limited or affected by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar laws
and equitable principles now or hereafter in effect and affecting the
rights and remedies of creditors generally); and
(b) each document to be executed by the Sellers pursuant
hereto, when executed and delivered in accordance with the provisions
hereof, shall be a valid and binding obligation of the Sellers, enforceable
in accordance with its terms.
2.3. NO CONFLICT; ABSENCE OF VIOLATION
The execution, delivery and performance by the Sellers of this
Purchase Agreement and all other documents contemplated hereby, the
fulfillment of and compliance with the respective terms and provisions
hereof and thereof, and the consummation by the Sellers of the transactions
contemplated hereby and thereby, have been duly authorized and do not and
will not (a) conflict with, or violate any provision of, any foreign,
Federal, state and local statutes, laws, ordinances, regulations, rules,
resolutions, orders, determinations, writs, injunctions, awards (including,
without limitation, awards of any arbitrator), judgments and decrees
applicable to the specified persons or entities and to the businesses and
assets thereof, or any provision of the organizational or governing
documents of any of the Sellers; or (b) conflict with, or result in any
breach of, or constitute a default under any agreement that is material to
any Seller to which any Seller is a party or by which any Seller may be
bound.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represent and warrant to the Buyer on the date hereof and
on the Closing Date as follows:
3.1. ORGANIZATION AND GOOD STANDING
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Illinois and has all requisite
corporate power and corporate authority to own, operate and lease its
assets, to carry on its business as currently conducted and to carry out
the transactions contemplated hereby. The Company is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each state or other jurisdiction in which either the ownership or use of
the properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification. The Company has no
subsidiaries and no equity investment or other interest in, nor has the
Company made advances or loans to, any corporation, association,
partnership, joint venture or other entity, except for loans made to
operators of hotels as described to the Buyer.
3.2. CERTIFICATE OF INCORPORATION AND BYLAWS
The Company has delivered to Buyer a true and complete copy of its
Certificate of Incorporation, as currently in effect (the "Certificate of
Incorporation"), certified as of a recent date by the Secretary of State of
Illinois, and a true and complete copy of the bylaws of the Company, as
currently in effect (the "Bylaws").
3.3. CAPITAL STRUCTURE OF THE COMPANY
The authorized capital stock of the Company consists of 1,000 shares
of Common Stock, par value $0.01 per share, of which 100 are issued and
outstanding. All outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
nonassessable. No shares of capital stock of the Company have been
reserved for any purpose. There are no outstanding securities convertible
into or exchangeable for the capital stock of the Company, or warrants to
purchase or to subscribe for any shares of such stock or other securities
of the Company. There are no outstanding agreements affecting or relating
to the voting, issuance, purchase, redemption, repurchase, transfer or
registration for sale under the Securities Act, of any securities of the
Company, except as contemplated hereunder.
3.4. NO CONFLICT; ABSENCE OF VIOLATION
(a) The execution, delivery and performance by the Company of
this Purchase Agreement and all other documents contemplated hereby, the
fulfillment of and compliance with the respective terms and provisions
hereof and thereof, and the consummation by the Sellers of the transactions
contemplated hereby and thereby, have been duly authorized and do not and
will not (a) conflict with, or violate any provision of, any foreign,
Federal, state and local statutes, laws, ordinances, regulations, rules,
resolutions, orders, determinations, writs, injunctions, awards (including,
without limitation, awards of any arbitrator), judgments and decrees
applicable to the specified persons or entities and to the businesses and
assets thereof, or any provision of the Certificate of Incorporation or
Bylaws of the Company; (b) conflict with, or result in any breach of, or
constitute a default under any agreement that is material to the business
of the Company ("Material Agreement") to which the Company is a party or by
which the Company or any of its material assets may be bound; or (c) result
in or require the creation or imposition of or result in the acceleration
of any indebtedness, or of any encumbrance of any nature upon, or with
respect to any asset of the Company.
(b) The Company is not in violation of or default under, nor
has the Company breached, any term or provision of its Certificate of
Incorporation or Bylaws or any Material Agreement or restriction to which
the Company is a party or by which the Company is bound.
(c) The Company has not received notice of any violation (or
of any investigation, inspection, audit, or other proceeding by any
governmental authority involving allegations of any violation) of any Law,
nor are they in material default with respect to any Law, and to the
Company's knowledge, no investigation, inspection, audit, or other
proceeding by any governmental authority involving allegations of violation
of any Law is threatened or contemplated.
3.5. NO UNDISCLOSED LIABILITIES
The Company has no liabilities or obligations of any nature (whether
known or unknown and whether absolute, accrued, contingent, or otherwise)
except for liabilities or obligations reflected or reserved against in the
balance sheet and current liabilities incurred in the ordinary course of
business since the respective dates thereof.
3.6. TAXES
The Company has filed or caused to be filed (on a timely basis since
January 1, 1998) all tax returns that are or were required to be filed by
or with respect to it, either separately or as a member of a group,
pursuant to applicable legal requirements. The Company has made available
to the Buyer, all such tax returns filed by the Company. The Company has
paid, or made provision for the payment of all taxes that have or may have
become due pursuant to these tax returns or otherwise, or pursuant to any
assessment received by the Company.
3.7. TITLE TO PROPERTY AND ASSETS; LIENS
The Company has good and insurable title to its properties and assets
and has good title to all its leasehold interests, in each case subject to
no mortgage, pledge, lien, lease or charge, other than (i) the lien of
current taxes not yet due and payable and (ii) such minor liens and
encumbrances which arise in the ordinary course of business, and which do
not in any case materially detract from the value or use of the property
subject thereto or materially impair the operations of the Company.
3.8. AGREEMENTS; ACTION
(a) Except as disclosed to the Buyer, there are no
agreements, understandings, instruments, contracts, proposed transactions,
judgments, orders, writs or decrees to which the Company is a party or by
which it is bound which may involve (i) material obligations (contingent or
otherwise) of or material payments to the Company, or (ii) which would
otherwise materially adversely affect the operations of the Company.
(b) Except as disclosed to the Buyer, the Company has not
(other than in the ordinary course of business) (i) incurred any material
indebtedness for money borrowed to any party other than LHO, (ii) made any
material loans or advances to any person, or (iii) sold, exchanged, or
otherwise disposed of any of its assets or rights.
3.9. DEBT INSTRUMENTS
Except as disclosed to the Buyer, the Company is not a party, nor has
the Company assumed any mortgages, indentures, notes, guarantees or other
agreements for or relating to borrowed money (including, without
limitation, conditional sales agreements and capital leases) involving
payments by the Company other than loans from LHO.
3.10. BOOKS AND RECORDS
The books of account, stock records, minute books and other records
of the Company, all of which have been made available to the Buyer, are
true and accurate.
3.11. LITIGATION; DISPUTES
There are no actions, suits, proceedings or investigations pending
or, to the Company's knowledge, threatened against the Company or its
properties before any court or governmental agency that, if determined
adversely to the Company, would result in any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company. The Company is not a party or
subject to the provisions of any order, writ, injunction, judgment or
decree of any court or government agency or instrumentality.
3.12. ABSENCE OF EMPLOYEES
The Company has no employees.
3.13. COMPLIANCE WITH LAW; APPROVALS
The Company has not received notice of any violation (or of any
investigation, inspection, audit, or other proceeding by any governmental
authority involving allegations of any violation) of any law, nor are they
in material default with respect to any law, and to the Company's
knowledge, no investigation, inspection, audit, or other proceeding by any
governmental authority involving allegations of violation of any law is
threatened or contemplated.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants, to the Sellers as follows:
4.1. ORGANIZATION AND STANDING; BINDING OBLIGATION
The Buyer is a limited partnership, duly organized, validly existing
and in good standing under the laws of the state of Delaware and has the
full and unrestricted power and authority to enter into this Purchase
Agreement and all other documents contemplated hereby and to carry out the
transactions contemplated hereby. This Purchase Agreement constitutes a
valid and binding obligation of the Buyer and, when executed and delivered
by the Buyer, will be enforceable in accordance with its terms, will be in
full force and effect and will constitute a legal, valid and binding
obligation of, and is legally enforceable against, the Buyer (except as
enforceability may be limited or affected by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar laws
and equitable principles now or hereafter in effect and affecting the
rights and remedies of creditors generally); and each document to be
executed by the Buyer pursuant hereto, when executed and delivered in
accordance with the provisions thereof, shall be a valid and binding
obligation of the Buyer, enforceable in accordance with its terms.
4.2. AUTHORIZATION
The execution, delivery and performance by the Buyer of this Purchase
Agreement and all other documents contemplated hereby, the fulfillment of
and the compliance with the respective terms and provisions hereof and
thereof, and the consummation by the Buyer of the transactions contemplated
hereby and thereby have been duly authorized, and will not (a) conflict
with, or violate any term or provision of the Buyer's partnership agreement
or other governing documents or (b) conflict with, or result in any breach
of, or constitute a default under, any agreement to which either Buyer is a
party or by which the Buyer or its assets are bound. No other action is
necessary for the Buyer to enter into this Purchase Agreement and all other
documents contemplated hereby and to consummate the transactions
contemplated hereby and thereby.
4.3. NO REGISTRATION UNDER THE SECURITIES ACT
(a) The Buyer understands that the Shares to be purchased by
it at Closing pursuant to the terms of this Purchase Agreement have not and
will not be registered under the Securities Act or any state securities
laws, have been issued in reliance upon exemptions contained in the
Securities Act or interpretations thereof and in the applicable state
securities laws, and cannot be offered for sale, sold or otherwise
transferred unless the Shares being acquired hereunder are registered or
qualified for exemption from registration under the Securities Act.
(b) The Buyer understands that the certificates or other
instruments representing the Shares, except as set forth below, shall bear
a restrictive legend in substantially the following form (and the Company
may reasonably place a stop-transfer order against transfer of such stock
certificates):
(i) Securities Act legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE OR ANY CERTIFICATE
ISSUED IN EXCHANGE OR TRANSFER THEREFOR HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR APPLICABLE
STATE SECURITIES LAWS. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF (I) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE
SECURITIES ACT, OR APPLICABLE STATE SECURITIES LAWS, OR (II) AN OPINION OF
COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES
LAWS OR (III) UNLESS SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES ACT.
(ii) Any legend imposed or required by the bylaws of the
Company or applicable state securities laws.
4.4. ACQUISITION FOR INVESTMENT
The Shares are being acquired under this Purchase Agreement by the
Buyer solely for its own account, for investment not as a nominee or agent
and not with a view toward distribution, within the meaning of the
Securities Act. By executing this Purchase Agreement, the Buyer further
represents that the Buyer does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or any third person, with respect to the
Shares.
4.5. EVALUATION OF MERITS AND RISKS OF INVESTMENT
The Buyer has knowledge and experience in financial and business
matters such that it is capable of evaluating the merits and risks of its
investment in the Shares. The Buyer is an "accredited investor" within the
meaning of Rule 501(a) under the Securities Act. The Buyer understands and
is able to bear any economic risks associated with such investment
(including, without limitation, the necessity of holding the Shares for an
indefinite period of time).
4.6. ADDITIONAL INFORMATION
The Buyer has received from the Company all of the information which
the Buyer and its representatives have requested from the Company and
consider necessary or appropriate for deciding whether to purchase the
Shares. The Buyer acknowledges that it has been afforded the opportunity
to ask questions and receive answers concerning the Company and to obtain
additional information that it has requested to verify the accuracy of the
information contained herein. Notwithstanding the foregoing, nothing
contained herein shall operate to modify or limit in any respect the
representations and warranties of the Sellers or to relieve them from any
obligations to the Buyer for breach thereof or the making of misleading
statements or the omission of material facts in connection with the
transactions contemplated herein.
5. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other
actions required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following
conditions:
5.1. REPRESENTATIONS AND WARRANTIES TO BE TRUE AND CORRECT
The representations and warranties of the Sellers and the Company
contained in this Purchase Agreement shall be true, complete and correct in
all material respects on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and as of such
date, and an officer of each of the Sellers and the Company shall have
certified to such effect to the Buyer in writing on behalf of each of the
Sellers.
5.2. PERFORMANCE
Each Seller shall have performed and complied in all material
respects with all agreements contained herein required to be performed or
complied with by it prior to or at the Closing Date, and an officer of each
Seller shall have certified to the Buyer in writing to such effect on
behalf of each Seller.
5.3. NO ADVERSE CHANGE IN LAW
There shall have been no change in law or regulation which would
prevent the general partner of the Buyer from being taxed as a Real Estate
Investment Trust under Sections 856 through 860 of the Internal Revenue
Code of 1986, as amended after consummation of the transactions
contemplated by this Purchase Agreement.
5.4. ALL PROCEEDINGS TO BE SATISFACTORY
All corporate and other proceedings to be taken by the Company in
connection with the transactions contemplated hereby and all documents
incident thereto shall be reasonably satisfactory in form and substance to
the Buyer and its counsel and the Buyer and its counsel shall have received
all such counterpart originals or certified or other copies of such
documents as they reasonably may request.
5.5. SUPPORTING DOCUMENTS
The Company shall deliver a certificate dated as of the Closing Date
and certifying that attached thereto is a true and complete copy of the
Certificate of Incorporation and Bylaws of the Company as in effect on the
date of such certification.
5.6. CONSENTS
The Company shall have received all consents, authorizations and
approvals of governmental and private parties which are required to be
obtained in order to consummate the transactions contemplated hereby, and
such consents, authorizations and approvals shall be in full force and
effect on the Closing Date. All such documents shall be reasonably
satisfactory in form and substance to the Buyer and its counsel.
6. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE
Sellers' obligation to sell the Shares and to take the other actions
required to be taken by Sellers at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following
conditions:
6.1. CAPITAL ACCOUNT DISTRIBUTION
Prior to the Closing the Company shall make a Capital Account
Distribution as specified in Schedule II hereto.
6.2. RETAINED EARNINGS DISTRIBUTION
Prior to or contemporaneously with the Closing the Company shall
distribute all retained earnings determined in accordance with generally
accepted accounting principles ("Retained Earnings") from March 24, 1998
(inception) through December 31, 2000 (the "Retained Earnings
Distribution"). Any items of income or expense not received or incurred in
the ordinary course of the Company's business and are inconsistent with the
Company's past operations shall be excluded when calculating Retained
Earnings. The Company shall pay each of the Sellers their pro rata portion
of the Retained Earnings Distribution prior to or contemporaneously with
the Closing based upon the Company's good faith estimate of its Retained
Earnings as of December 31, 2000 (the "Retained Earnings Estimate"). Hotel
Co-Investment shall receive 45.5% of the Retained Earnings Estimate, LPI
shall receive 45.5% of the Retained Earnings Estimate and LHO shall receive
9.0% of the Retained Earnings Estimate.
6.3. REPRESENTATIONS AND WARRANTIES TO BE TRUE AND CORRECT
The representations and warranties of the Buyer contained in this
Purchase Agreement shall be true, complete and correct in all material
respects on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date, and
the general partner of the Buyer shall have certified to such effect to the
Sellers in writing on behalf of the Buyer.
6.4. CONSENTS
The Buyer shall have received all consents, authorizations and
approvals of governmental and private parties which are required to be
obtained in order to consummate the transactions contemplated hereby, and
such consents, authorizations and approvals be in full force and effect on
the Closing Date. All such documents shall be reasonably satisfactory in
form and substance to the Company and its counsel.
7. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION REMEDIES
7.1. SURVIVAL OF REPRESENTATIONS
All representations, warranties, covenants, and other agreements made
by any party to this Purchase Agreement herein or pursuant hereto shall
also be deemed made on and as of the Closing Date as though such
representations, warranties, covenants, indemnities and other agreements
were made on and as of such date, and all the representations, warranties,
covenants, indemnities and other agreements shall remain in full force and
effect until the close of business on January 1, 2002. No party to this
Purchase Agreement will have any liability with respect to any
representation, warranty, covenant, indemnification or other agreement to
be performed and complied with by it, unless on or before the close of
business on January 1, 2002 such party is notified of a claim specifying
the factual basis of that claim in reasonable detail to the extent then
known by the party giving such notice.
7.2. GENERAL INDEMNITY
The Sellers severally will indemnify and hold harmless the Buyer and
its successors and assigns and their respective directors, officers,
employees and agents against and in respect of any and all costs, expenses,
debts, liabilities and obligations incurred by any of them, including
reasonable attorney fees and expenses, for breach of any representation,
warranty or promise made to the Buyer by the Sellers; provided however,
each Seller shall only indemnify the Buyer with respect to breaches of any
representation, warranty or promise made with respect to it. The Buyer
hereby indemnifies and holds harmless the Sellers and their successors and
assigns and their respective directors, officers, employees and agents
against and in respect of any and all costs, expenses, debts, liabilities
and obligations incurred by any of them, including reasonable attorney fees
and expenses, for breach of any representation, warranty or promise made to
the Sellers by the Buyer.
8. COVENANTS
8.1. BEST EFFORTS
Each party shall use its best efforts timely to satisfy each of the
conditions to be satisfied by it as provided in Sections 5 and 6 of this
Purchase Agreement.
8.2. ADDITIONAL PAYMENT/ REBATE AMOUNT
(a) After completion of the Company's audit for the year
ended December 31, 2000, but in no event later than March 30, 2001, the
Buyer shall pay each of the Sellers an additional amount (the "Additional
Payment") if the Company's audited Retained Earnings (the "Audited Retained
Earnings") exceed the Retained Earnings Estimate. The Additional Payment
shall equal the Audited Retained Earnings less the Retained Earnings
Estimate. Hotel Co-Investment shall receive 45.5% of the Additional
Payment, LPI shall receive 45.5% of the Additional Payment and LHO shall
receive 9.0% of the Additional Payment.
(b) If the Retained Earnings Estimate exceeds the Audited
Retained Earnings, the Sellers shall make a payment to the Buyer (the
"Rebate Amount"). The Rebate Amount shall equal the Retained Earnings
Estimate less the Audited Retained Earnings. Hotel Co-Investment shall pay
45.5% of the Rebate Amount, LPI shall pay 45.5% of the Rebate Amount and
LHO shall pay 9% of the Rebate Amount.
8.3. 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 Purchase Agreement
to any third party.
9. MISCELLANEOUS
9.1. ADDITIONAL ACTIONS AND DOCUMENTS
After Closing, each of the parties hereto hereby agrees to take or
cause to be taken such further actions, to execute, deliver and file or
cause to be executed, delivered and filed such further documents, and will
obtain such consents, as may be necessary or as may be reasonably requested
in order to fully effectuate the purposes, terms and conditions of this
Purchase Agreement.
9.2. NO BROKERS
Each of the parties hereto represents and warrants to the other party
that such party has not engaged any broker, finder or agent in connection
with the transactions contemplated by this Purchase Agreement and has not
incurred (and will not incur) any unpaid liability to any broker, finder or
agent for any brokerage fees, finders' fees or commissions, with respect to
the transactions contemplated by this Purchase Agreement. Each party agrees
to indemnify, defend and hold harmless each of the other parties from and
against any and all claims asserted against such parties for any such fees
or commissions by any persons purporting to act or to have acted for or on
behalf of the indemnifying party.
9.3. 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 PURCHASE AGREEMENT OR ANY OF THE TRANSACTIONS OR
AGREEMENTS CONTEMPLATED HEREBY.
9.4. PUBLICITY
Neither the Buyer nor the Company 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.
9.5. EXPENSES
Each party hereto shall pay its own expenses incident to this
Purchase Agreement and the transactions contemplated hereunder, including
all legal and accounting fees and disbursements.
9.6. ASSIGNMENT
Neither party shall assign its rights and obligations under
this Purchase 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
Company or the Buyer of its rights or obligations under this Purchase
Agreement, whether before or after the Closing, release the Company or the
Buyer from their respective liabilities and obligations hereunder.
9.7. ENTIRE AGREEMENT; AMENDMENT
This Purchase 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 transactions
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 Purchase
Agreement shall be valid or binding unless set forth in writing and duly
executed and delivered by the Sellers and the Buyer.
9.8. WAIVER
No delay or failure on the part of any party hereto in exercising any
right, power or privilege under this Purchase Agreement or under any other
documents furnished in connection with or pursuant to this Purchase
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.
9.9. SEVERABILITY
If any part of any provision of this Purchase Agreement or any other
agreement or document given pursuant to or in connection with this Purchase
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 Purchase Agreement.
9.10. GOVERNING LAW
This Purchase 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 Delaware
(excluding the conflicts of law principles thereof).
9.11. 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 Purchase 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 the Buyer:
LaSalle Hotel Operating Partnership, L.P.
c/o LaSalle Hotel Properties
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Fax #: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇ & Wood LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax #: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to the Sellers:
LaSalle Hotel Co-Investment, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Fax # (▇▇▇) ▇▇▇-▇▇▇▇
LPI Charities
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Fax # (▇▇▇) ▇▇▇-▇▇▇▇
LaSalle Hotel Properties
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Fax #: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇ & Associates
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Fax # (▇▇▇) ▇▇▇-▇▇▇▇
(iii) If to the Company:
LaSalle Hotel Lessee, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Fax # (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇ & Associates
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Fax # (▇▇▇) ▇▇▇-▇▇▇▇
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.
9.12. HEADINGS
Section headings contained in this Purchase Agreement are inserted
for convenience of reference only, shall not be deemed to be a part of this
Purchase Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.
9.13. EXECUTION IN COUNTERPARTS
To facilitate execution, this Purchase 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 Purchase 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.
9.14. BINDING EFFECT
Subject to any provisions hereof restricting assignment, this
Purchase 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 undersigned have duly executed this Purchase
Agreement, or have caused this Purchase Agreement to be duly executed on
their behalf, as of the day and year first hereinabove set forth.
BUYER: THE COMPANY:
----- -----------
LASALLE HOTEL OPERATING LASALLE HOTEL LESSEE, INC.
PARTNERSHIP,L.P.
By: LaSalle Hotel Properties
its General Partner By:
------------------------------
Name:
By: Title
------------------------
Name:
Title:
SELLERS:
-------
LASALLE HOTEL CO-INVESTMENT, INC.
By:
--------------------------
Name:
Title
LPI CHARITIES
By:
--------------------------
Name:
Title
LASALLE HOTEL PROPERTIES
By:
--------------------------
Name:
Title
SCHEDULE I
PURCHASE
SELLER SHARES PRICE
------ ------ --------
LaSalle Hotel Co-Investment, Inc.. . 45.5 $227,500
LPI Charities. . . . . . . . . . . . 45.5 $227,500
LaSalle Hotel Properties . . . . . . 9.0 $ 45,000
----- --------
Total . . . . . . . . . . . . . 100.0 $500,000
===== ========
I-1
SCHEDULE II
Capital
Account
Seller Distribution
------ ------------
LaSalle Hotel Co-Investment, Inc.. . $33,375.16
LPI Charities. . . . . . . . . . . . $33,375.16
LaSalle Hotel Properties . . . . . . $ 6,601.68
----------
Total . . . . . . . . . . . . . $73,352.00
==========
II-1