Exhibit 2.2
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "First
Amendment") is made as of the 16th day of January, 2004, by and between
Convention Hotel Partners, LLC, an Indiana limited liability company
(hereinafter called "Seller"), and LHO Indianapolis Hotel One, L.L.C., a
Delaware limited liability company ("Purchaser").
W I T N E S S E T H:
WHEREAS, Seller and LaSalle Hotel Operating Partnership, L.P. ("LHOP")
entered into a Purchase and Sale Agreement, dated as of December 17, 2003 (the
"Agreement"), pursuant to which Seller agreed to sell and Purchaser agreed to
purchase the hotel known as the Marriott Hotel Downtown Indianapolis in
Indianapolis, Indiana (the "Project"); and
WHEREAS, LHOP assigned all of its rights and obligations under the
Agreement to Purchaser; and
WHEREAS, the Seller and Purchaser desire to amend the Agreement on the
terms and conditions set forth below;
NOW, THEREFORE, in consideration of the premises and the respective
undertakings of the parties hereinafter set forth, it is hereby agreed:
1. Subject to the terms of the Agreement and Paragraph 6 below, the
Closing Date (as defined in Section 1(B) of the Agreement) shall be February 10,
2004.
2. At Seller's election, in lieu of conveying title to the Project to
Purchaser, Seller may elect to convey title to the Project to a special purpose
entity (the "SPE") immediately prior to Closing and then convey one hundred
percent (100%) of the ownership interests in the SPE to Purchaser at Closing,
free and clear of any liens and encumbrances, on the following terms and
conditions:
(a) The organizational documents for the SPE shall (i) provide that the
ownership interests in the SPE are certificated and fully paid in and
non-assessable, and (ii) be otherwise satisfactory to Purchaser and
shall contain such provisions as Purchaser deems necessary to obtain a
securitized loan on the Project after Closing;
(b) The SPE shall be established immediately prior to Closing, and Seller
represents and warrants that at Closing the SPE will contain no assets
other than the Project and will carry on no business other than the
operation of the Project;
(c) Seller represents and warrants that the SPE shall have no liabilities
or obligations other than (i) the liabilities and obligations accruing
after Closing under the Project Agreements, the Service and Supply
Contracts, the Tenant Leases and the Equipment Leases, (ii) the first
mortgage loan on the Project which shall be repaid by Seller and
insured over by the Title Company on or prior to the Closing, and
(iii) expenses which are contemplated in the Agreement that are
incurred in the ordinary course of operating the Project;
(d) Seller represents and warrants to Purchaser that upon Closing
Purchaser will be the one hundred percent owner of the SPE free and
clear of all liens and encumbrances and that the SPE will have no
liabilities or obligations other than those described above;
(e) Seller acknowledges and agrees that Purchaser intends to cause the SPE
to convey the Project to Purchaser immediately after Closing and that
all of the terms and conditions in the Agreement, including Seller's
representations and warranties and indemnification obligations, shall
inure to the benefit of both the SPE and Purchaser; and Purchaser
acknowledges and agrees that (i)
Purchaser shall not be released from any of its obligations and
liabilities under the Agreement, including its representations and
warranties and indemnification obligations, by reason of having
acquired the SPE and (ii) Purchaser shall remain liable and
responsible for any obligations of Purchaser under the Agreement to
Seller with respect to prorations and credits;
(f) The conveyance documents used to convey the Project to the SPE shall
be in the same forms as are attached to the Agreement, and the
conveyance documents pursuant to which the ownership interests in the
SPE are conveyed to Purchaser shall be reasonably satisfactory to
Purchaser;
(g) Seller shall have provided Purchaser with UCC, judgment and tax lien
searches against Seller showing no liens or encumbrances against the
assets of the SPE or the ownerships interests of Seller in the SPE
other than the lien held by the holder of the first mortgage on the
Project which shall be paid off by Seller at or prior to the Closing;
(h) Seller shall have provided Purchaser with an opinion from Seller's
counsel confirming that Seller owns 100% of the ownership interests in
the SPE as of the Closing, free and clear to such counsel's knowledge
of any liens or encumbrances;
(i) Seller shall have provided Purchaser with reasonable evidence prior to
Closing that (i) the SPE and Purchaser have been named as additional
insureds on Seller's commercial liability insurance policies for the
Project which insurance shall be in an amount of not less than
$100,000,000, and (ii) such insurance policies cover the SPE and
Purchaser for occurrences at the Project prior to the date they were
named as additional insureds for the Project;
(j) Provided Purchaser delivers a deed at Closing to the Title Company for
the conveyance of the Project from the SPE to Purchaser, the Title
Company shall commit at Closing to issue the Subleasehold Policy
insuring that the Purchaser is the owner of the Project subject to no
liens and encumbrances other than the Permitted Exceptions and shall
contain an endorsement that any matters known to the Seller prior to
the Closing will not be imputed to Purchaser; and
(k) At Closing Seller shall deliver to Purchaser agreements, in form
reasonably satisfactory to Purchaser, from direct or indirect
investors in Seller with substantial assets other than their interests
in Seller or the proceeds thereof, which agreements shall provide
that, if a lawsuit is filed against Purchaser during the second year
after the Closing arising out of events occurring prior to the
Closing, which claim asserts that Purchaser has liability for such
lawsuit as a result of acquiring the SPE, such investors shall
contribute to the Seller or place in an escrow reasonably satisfactory
to Purchaser, in proportion to their ownership interests in Seller,
one hundred percent (100%) of such claim up to $2,000,000 in the
aggregate. Such contributions shall be in the form of letters of
credit reasonably satisfactory to Purchaser or in the form of cash.
Such contribution shall be made within thirty (30) days after such
investors received notice from Purchaser of such claim, and the
contributions shall remain in Seller or escrow until the earlier of
(i) the date such lawsuit is resolved in favor of Purchaser and Seller
has fulfilled its indemnity obligations under the Agreement, in which
case the contributions shall be return to such investors, (ii) the
date a final judgment is rendered against Purchaser in such lawsuit in
which case such funds shall be used to satisfy such judgment, or (iii)
until a final judgment is rendered against Seller in favor of
Purchaser for breach of Seller's obligation under the Agreement to
defend Purchaser in such lawsuit in which case such funds shall be
distributed to Purchaser for the costs of defending the lawsuit with
the balance distributed in accordance with (i) or (ii) above.
3. The first two sentences of Section 2(B) of the Agreement are deleted
and the following is substituted in lieu thereof: "Purchaser shall deposit FIVE
MILLION DOLLARS ($5,000,000) with the Title Company (the "▇▇▇▇▇▇▇ Money
Deposit") within three (3) business days after the latter of (i) the date
hereof, and (ii) the date Purchaser receives wiring instructions from the Title
Company for the ▇▇▇▇▇▇▇ Money Deposit.
4. A portion of the Purchase Price equal to the book value of the
Personal Property on Seller's financial statements as of December 31, 2003,
shall be allocated to the Personal Property and the balance of the Purchase
Price shall be allocated to the Land and Improvements.
5. Purchaser waives its right to terminate the Agreement pursuant to
Sections 6(A), 6(D), 6(J) 6(K) and 6(N) of the Agreement.
6. Seller acknowledges that, pursuant to Section 6(A) of the Agreement,
Purchaser has objected to any and all title exceptions except for those set
forth in the proforma title insurance policy, dated January 6, 2004, issued by
Chicago Title Insurance Company for the Project, as modified by that certain
e-mail from ▇▇▇▇▇▇ ▇▇▇▇▇ to ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇, dated January 14, 2004,
and that the Permitted Exceptions shall be those set forth in such proforma
title insurance policy as modified by such e-mail.
7. Purchaser has notified Seller that Purchaser has been unable to reach
agreement with Marriott on the New Franchise Agreement; and, as a result, Seller
acknowledges that Purchaser has extended the Inspection Period pursuant to
Section 6(G) for the First Extension Period.
8. Section 6(M) of the Agreement is deleted and the following is
substituted in lieu thereof: "M. As a condition to Purchaser's obligation to
perform hereunder, Seller shall have obtained and delivered to Purchaser
estoppel certificates substantially in the forms attached hereto as Exhibit O
from each of the parties indicated therein with such changes as Purchaser may
approval, which approval shall not be unreasonably withheld; and Seller shall
use commercially reasonable efforts to obtain such certificates."
9. Seller shall give Purchaser a credit at Closing for a prorata share of
the fees owed to Marriott International, Inc. ("Marriott") under its franchise
agreement for the Project for the portion of the Accounting Period (as defined
in such franchise agreement) in which the Closing occurs, which prorata share
shall based on the portion of such Accounting Period during which Seller owned
the Project. Purchaser shall be responsible to pay Marriott any franchise fees
which Seller has credited Purchaser at Closing.
10. Purchaser has notified Seller that Purchaser will be unable to obtain
liquor licenses for the Project by the Closing. As a result, Seller and
Purchaser shall commence to perform their obligations under Section 11 of the
Agreement such that Purchaser will be able to serve alcoholic beverages at the
Project after Closing using Seller's liquor licenses until Purchaser is able to
obtain its own liquor licenses for the Project
11. The following sentence is added at the end of Section 19 of the
Agreement: "Seller shall provide Purchaser with the final audited financial
statements for calendar year 2003 at least two (2) business days prior to the
Closing Date; and, if such financial statements vary materially and adversely
from the draft financial statements for calendar year 2003 delivered by Seller
to Purchaser prior to the execution of this First Amendment, Purchase may
terminate this Agreement and obtain a refund of the ▇▇▇▇▇▇▇ Money provided
Purchaser gives Seller notice of such termination no later than the Closing
Date. For purposes of the immediately preceding sentence, "materially" shall
mean a difference of two and one-half percent (2-1/2%) or more."
12. It shall be a condition of Closing that Seller obtain and deliver to
Purchaser the certificate of completion from the architect and the statement of
project completion from the agency referenced in Section 20 of that certain
Project Agreement dated as of June 23, 1999, by and between Seller and the
Department of Metropolitan Development of the Consolidated City of Indianapolis,
acting for and on behalf of the Metropolitan Development Commission of ▇▇▇▇▇▇
County, Indiana, in its capacity as the Redevelopment Commission of the City of
Indianapolis ("MCD").
13. The Assignment of the Project Agreements shall not include (a) that
certain Lease dated as of June 23, 1999 by and between the Capital Improvement
Board of Managers of ▇▇▇▇▇▇ County, Indiana and the MDC, and (b) that certain
Construction Management Agreement, dated June 23, 1999, between ▇▇▇▇▇, ▇▇▇▇ and
▇▇▇▇▇▇▇, Inc. and the Department of Metropolitan Development, acting on behalf
of the Metropolitan Development Commission of ▇▇▇▇▇▇ County, Indiana; but shall
include Sections 2.5 and 2.10 as well as Section 2.8 of that
certain Agreement for Architect's Services, dated June 14, 1999, between the
Department of Metropolitan Development, acting on behalf of the Metropolitan
Development Commission of ▇▇▇▇▇▇ County, Indiana, and Hellmuth, Obata &
Kassabaum. In addition, either the Assignment of Project Agreements shall not
include that certain Project Agreement dated as of June 23, 1999, by and between
Seller and the MDC, or Seller shall deliver to Purchaser the amendment to such
agreement referenced in the last sentence of Section 20 of such agreement, which
amendment shall be reasonably satisfactory to Purchaser.
14. Seller shall immediately withdraw any pending appeals or protests
regarding the real estate taxes for the Project upon deposit of the ▇▇▇▇▇▇▇
Money by Purchaser with the Title Company, and Seller shall not file any new
appeals or protests regarding the real estate taxes for the Project without the
prior written consent of Purchaser which Purchaser may withhold in its sole
discretion.
15. The Agreement with Hospitality Staffing Solutions shall not be
included in Exhibit C.
16. Seller shall deliver to Purchase on or prior to Closing a consent from
Starbucks Corporation to the assignment to Purchaser of the Master Licensing
Agreement, dated March 20, 2001, between Seller and Starbucks Corporation.
17. All terms used herein but not defined herein shall have the same
meaning for purposes of this First Amendment as they do for purposes of the
Agreement. Except as amended by this First Amendment, all of the terms and
conditions of the Agreement are ratified and confirmed. All references to the
"Agreement" in any agreements, correspondence or notices shall be deemed to
refer to the Agreement as amended by this First Amendment.
18. This First Amendment may be executed in counterparts and by facsimile
signature, each of which shall be deemed an original and together shall
constitute one and the same document.
IN WITNESS WHEREOF, the parties have executed this First Amendment as of
the day and year first above written.
"SELLER"
Convention Hotel Partners, LLC, an
Indiana limited liability company
By: Convention Hotel Partners, Inc., an
Indiana corporation, its manager
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Printed Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
"PURCHASER"
LHO Indianapolis Hotel One, L.L.C.,
a Delaware limited liability company
By: LHO Indianapolis Hotel One MM,
L.L.C., its managing member
By: LHO Indianapolis Hotel One CMM,
Inc., its managing member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory