PLACEMENT AGREEMENT AMONG HERSHA HOSPITALITY LIMITED PARTNERSHIP, HERSHA HOSPITALITY TRUST, HERSHA STATUTORY TRUST II AND CREDIT SUISSE FIRST BOSTON LLC Dated as of May 31, 2005
EXHIBIT
10.1
AMONG
HERSHA
HOSPITALITY LIMITED PARTNERSHIP,
HERSHA
STATUTORY TRUST II
AND
CREDIT
SUISSE FIRST BOSTON LLC
________________
Dated as
of May 31, 2005
________________
Hersha
Hospitality Limited Partnership
$25,000,000
Preferred Securities
Preferred
Securities
(Liquidation
Amount $1,000 per Preferred Security)
______________________
May 31,
2005
Credit
Suisse First Boston LLC
Eleven
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
Hersha
Hospitality Limited Partnership, a Virginia limited partnership (the “Company”),
its financing subsidiary, Hersha Statutory Trust II, a Delaware statutory trust
(the “Trust,” and hereinafter together with the Company, the “Offerors”), and
Hersha Hospitality Trust, a Maryland corporation (“HHT”), hereby confirm their
agreement (this “Agreement”) with you as placement agent (the “Placement
Agent”), as follows:
Section
1.
Issuance
and Sale of Securities.
1.1
Introduction. The
Offerors propose to issue and sell at the Closing (as defined in Section 2.3.1
hereof) TWENTY-FIVE
MILLION
($25,000,000) DOLLARS of the
Trust’s Preferred Securities, with a liquidation amount of $1,000 per preferred
security, bearing a fixed rate of interest equal to 7.173% per annum through the
interest payment date in July 2010 and, thereafter, a variable rate of interest,
per annum, reset quarterly, equal to LIBOR (as defined in the Indenture (as
defined below)) plus 3.00% (the “Preferred Securities”), directly or indirectly,
to Credit Suisse First Boston, acting through its Cayman Islands branch, a Swiss
banking corporation (the “Purchaser”), pursuant to the terms of the Preferred
Securities Subscription Agreement entered into, or to be entered into on or
prior to the Closing Date (as defined in Section 2.3.1 hereof), between the
Offerors, HHT and the Purchaser (the “Subscription Agreement”), the form of
which is attached hereto as Exhibit
A
and
incorporated herein by this reference.
1.2
Operative
Agreements. The
entire proceeds from the sale by the Trust to the holders of the Preferred
Securities shall be combined with the entire proceeds from the sale by the Trust
to the Company of its common securities (the “Common Securities”), and shall be
used by the Trust to purchase TWENTY-FIVE MILLION SEVEN HUNDRED SEVENTY-FOUR
THOUSAND
($25,774,000) DOLLARS in
principal amount of the Junior Subordinated Notes (the “Junior Subordinated
Notes”) of the Company. The Preferred Securities and the Common Securities of
the Trust shall be issued pursuant to an Amended and Restated Trust Agreement
among Wilmington Trust Company, as property trustee (the “Property Trustee”) and
as Delaware trustee (the “Delaware Trustee”), the Administrative Trustees named
therein and the Company, to be dated as of the Closing Date and in substantially
the form heretofore delivered to the Placement Agent (the “Trust Agreement”).
The Junior Subordinated Notes shall be issued pursuant to an Indenture (the
“Indenture”), to be dated as of the Closing Date, between the Company and
Wilmington Trust Company, as indenture trustee (the “Indenture Trustee”). The
documents identified in this Section
1.2 and in
Section
1.1 are
referred to herein as the “Operative Documents.” The Preferred Securities, the
Common Securities and the Junior Subordinated Notes are collectively referred to
as the “Securities.” All other capitalized terms used but not defined in this
Agreement shall have the meanings ascribed to them in the
Indenture.
2
1.3
Rights
of Purchaser. The
Preferred Securities shall be offered and sold by the Trust, directly or
indirectly, to the Purchaser without registration of any of the Preferred
Securities or the Junior Subordinated Notes under the Securities Act of 1933, as
amended (the “Securities Act”), or any other applicable securities laws in
reliance upon exemptions from the registration requirements of the Securities
Act and other applicable securities laws. The Offerors agree that this Agreement
shall be incorporated by reference into the Subscription Agreement and the
Purchaser shall be entitled to each of the benefits of the Placement Agent and
the Purchaser under this Agreement and shall be entitled to enforce obligations
of the Offerors under this Agreement as fully as if the Purchaser were a party
to this Agreement. The Offerors and the Placement Agent have entered into this
Agreement to set forth their understanding as to their relationship and their
respective rights, duties and obligations.
1.4
Legends. Upon
original issuance thereof, and until such time as the same is no longer required
under the applicable requirements of the Securities Act, the Preferred
Securities and Junior Subordinated Notes certificates shall each contain a
legend as required pursuant to any of the Operative Documents.
Section
2. Purchase
of Preferred
Securities.
2.1 Exclusive
Rights; Purchase Price. From the
date hereof until the Closing Date (which date may be extended by mutual
agreement of the Offerors and the Placement Agent), the Offerors hereby grant to
the Placement Agent the exclusive right to arrange for the sale to the Purchaser
of the Preferred Securities at a purchase price equal to $1,000 per Preferred
Security. The aggregate purchase price shall be TWENTY-FIVE
MILLION
($25,000,000) DOLLARS (the
“Purchase Price”), which Purchase Price is equal to 100% of the stated
liquidation amount of the Preferred Securities.
2.2 Subscription. The
Offerors hereby agree to evidence their acceptance of the subscription by
countersigning a copy of the Subscription Agreement and returning the same to
the Placement Agent.
2.3 Closing
and Delivery of Payment.
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2.3.1 Closing;
Closing Date. The
closing (the “Closing”) for the sale and purchase of the Preferred Securities
shall occur at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇ llp, Two
World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other place as the
parties hereto shall agree at 11:00 a.m. (New York time) on May 31, 2005, or
such other later date (not later than June 29, 2005) as the parties may
designate (such date and time of delivery and payment for the Preferred
Securities being herein called the “Closing Date”). The Preferred Securities
shall be transferred and delivered to the Purchaser or its designee against the
payment of the Purchase Price to the Offerors in immediately available funds on
the Closing Date to a U.S. account designated in writing by the Company at least
two (2) business days prior to the Closing Date.
2.3.2 Delivery. Delivery
of the Preferred Securities shall be made at such location, and in such names
and denominations, as the Purchaser shall designate at least two (2) business
days in advance of the Closing Date. The Company and the Trust agree to have the
Preferred Securities available for inspection and checking by the Purchaser in
New York, New York not later than 1:00 P.M., New York time, on the business day
prior to the Closing Date.
2.4
Placement
Agents’ Fees and Expenses.
2.4.1 Placement
Agents’ Compensation. The
Trust shall use the proceeds from the sale of the Preferred Securities, together
with the proceeds from the sale of the Common Securities, to purchase the Junior
Subordinated Notes. Because the proceeds from the sale of the Preferred
Securities shall be used to purchase the Junior Subordinated Notes from the
Company, the Company shall pay an aggregate of $30.00 for each $1,000 of
principal amount of Junior Subordinated Notes (3.00%) sold to the Trust
(excluding the Junior Subordinated Notes related to the Common Securities
purchased by the Company) (the “Commission”). Such amount shall be delivered to
the Placement Agent or such other person designated by the Placement Agent on
the Closing Date. The Placement Agent shall be responsible for the following
expenses: (i) rating agency costs and expenses and (ii) any fee payable to the
Company’s introducing agent; provided, that such introducing agent has an
agreement with the Placement Agent, but excluding the fees and expenses set
forth in Section
2.4.2 hereof.
2.4.2 Costs
and Expenses. The
Company hereby covenants and agrees that it shall pay or cause to be paid
(directly or by reimbursement) all costs and expenses incident to the
performance of the obligations of the Offerors under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated, including (i) all costs and expenses incident to the authorization,
issuance, sale and delivery of the Preferred Securities and any taxes payable in
connection therewith; (ii) the fees and expenses of qualifying the
Preferred Securities under the securities laws of the several jurisdictions as
provided in Section
6.4;
(iii) the fees and expenses of the counsel, the accountants and any other
experts or advisors retained by the Company or the Trust; (iv) the fees and all
reasonable expenses of the Property Trustee, the
Delaware Trustee, the
Indenture Trustee and any other trustee or paying agent appointed under the
Operative Documents, including the fees and disbursements of counsel for such
trustees; and (v) a due diligence fee in an amount equal to $5,000.
2.4.3 Reimbursement
of Expenses. If the
sale of the Preferred Securities provided for in this Agreement is not
consummated because any condition set forth in Section
3 to be
satisfied by either the Company or the Trust is not satisfied, because this
Agreement is terminated pursuant to Section
10 or
because of any failure, refusal or inability on the part of the Company or the
Trust to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder other than by a reason of a default by the
Placement Agent, the Company will reimburse the Placement Agent upon demand for
all reasonable out-of-pocket expenses (including the fees and expenses of each
of the Placement Agent’s or Purchaser’s counsel) that shall have been incurred
by the Placement Agent or Purchaser in connection with the proposed purchase and
sale of the Preferred Securities. The Company shall not in any event be liable
to the Placement Agent or Purchaser for the loss of anticipated profits from the
transactions contemplated by this Agreement.
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2.5 Failure
to Close. If any
of the conditions to the Closing specified in this Agreement shall not have been
fulfilled to the satisfaction of the Placement Agent or if the Closing shall not
have occurred on or before 11:00 a.m. (New York time) on June 29, 2005, then
each party hereto, notwithstanding anything to the contrary in this Agreement,
shall be relieved of all further obligations under this Agreement without
thereby waiving any rights it may have by reason of such nonfulfillment or
failure; provided,
however, that
the obligations of the parties under Sections
2.4, and
8 shall
not be so relieved and shall continue in full force and effect.
Section
3. Closing
Conditions. The
obligations of the parties under this Agreement on the Closing Date are subject
to the following conditions:
3.1
Accuracy
of Representations and Warranties. The
representations and warranties contained in this Agreement, and the statements
of the Offerors and of HHT made in any certificates pursuant to this Agreement,
shall be accurate as of the date of delivery of the Preferred
Securities:
3.2
Opinions
of Counsel. On the
Closing Date, the Placement Agent shall have received the following favorable
opinions or certificate, as the case may be, each dated as of the Closing Date:
(a) from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Wood llp, special
counsel for the Placement Agent and Purchaser and addressed to the Placement
Agent and Purchaser in substantially the form set forth on Exhibit
B-1 attached
hereto and incorporated herein by this reference, (b) from Hunton & ▇▇▇▇▇▇▇▇
LLP, counsel for the Offerors, or an Officers’ Certificate, addressed to the
Purchaser and the Placement Agent in substantially the form set forth on
Exhibit
B-2 attached
hereto and incorporated herein by this reference, (c) from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
& Wood llp, special
tax counsel for the Placement Agent and Purchaser and addressed to the Placement
Agent and Purchaser in substantially the form set forth on Exhibit
B-3 attached
hereto and incorporated herein by this reference, (d) from Morris, James,
Hitchens & ▇▇▇▇▇▇▇▇ LLP, special Delaware counsel to the Trust and addressed
to the Purchaser, the Placement Agent and the Offerors, in substantially the
form set forth on Exhibit
B-4 attached
hereto and incorporated herein by this reference, and (e) from Morris, James,
Hitchens & ▇▇▇▇▇▇▇▇ LLP, special counsel to the Indenture Trustee, the
Property Trustee and the Delaware Trustee and addressed to the Purchaser, the
Placement Agent and the Offerors, in substantially the form set forth on
Exhibit
B-5 attached
hereto and incorporated herein by this reference. Each opinion addressed to the
Purchaser shall state that the first entity, if any, to which the Purchaser
transfers any of the Preferred Securities (each, a “Subsequent Purchaser”) shall
be entitled to rely on such opinion.
3.3 Officer’s
Certificate. The
Company and HHT shall have furnished to the Placement Agent and the Purchaser a
certificate of the Company and HHT, signed by the General Partner of the Company
and by the President and Chief Operating Officer and by the Chief Financial
Officer of HHT, and the Trust shall have furnished to the Placement Agent and
the Purchaser a certificate of the Trust, signed by an Administrative Trustee of
the Trust, in each case dated the Closing Date, and, in the case of the Company
and HHT, as to 3.3.1 and
3.3.2 below
and, in the case of the Trust, as to 3.3.1
below:
3.3.1 the
representations and warranties in this Agreement are true and correct on and as
of the Closing Date with the same effect as if made on the Closing Date, and the
Company, HHT and the Trust have complied with all the agreements and satisfied
all the conditions on either of their part to be performed or satisfied at or
prior to the Closing Date; and
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3.3.2 since the
date of the Interim Financial Statements (as defined below), there has been no
material adverse change in the condition (financial or other), earnings,
business, prospects or assets of HHT and its subsidiaries, whether or not
arising from transactions occurring in the ordinary course of
business.
3.4
No
Subsequent Change.
Subsequent to the execution of this Agreement, there shall not have been any
change, in or affecting the condition (financial or other), earnings, business
or assets of the Company and its subsidiaries, whether or not occurring in the
ordinary course of business, the effect of which is, in the Placement Agent’s or
Purchaser’s judgment, so material and adverse as to make it impractical or
inadvisable to proceed with the purchase of the Preferred
Securities.
3.5 Purchase
Permitted by Applicable Laws; Legal Investment. The
purchase of and payment for the Preferred Securities as described in this
Agreement and pursuant to the Subscription Agreement shall (a) not be prohibited
by any applicable law or governmental regulation, (b) not subject the Purchaser
or the Placement Agent to any penalty or, in the reasonable judgment of the
Purchaser and the Placement Agent, other onerous conditions under or pursuant to
any applicable law or governmental regulation, and (c) be permitted by the laws
and regulations of the jurisdictions to which the Purchaser and the Placement
Agent are subject.
3.6 Consents
and Permits. The
Company and the Trust shall have received all consents, permits and other
authorizations, and made all such filings and declarations, as may be required
from any person or entity pursuant to any law, statute, regulation or rule
(federal, state, local and foreign), or pursuant to any agreement, order or
decree to which the Company or the Trust is a party or to which either is
subject, in connection with the transactions contemplated by this Agreement.
3.7 Information. Prior to
or on the Closing Date, the Offerors shall have furnished to the Placement
Agent, the Purchaser and their respective counsel such further information,
certificates, opinions and documents as the Placement Agent, Purchaser or their
respective counsel may reasonably request.
If any of
the conditions specified in this Section
3 shall
not have been fulfilled when and as required in this Agreement, or if any of the
opinions, certificates and documents mentioned above or elsewhere in this
Agreement shall not be reasonably satisfactory in form and substance to the
Placement Agent, the Purchaser or their respective counsel, this Agreement and
all the Placement Agent’s obligations hereunder may be canceled at, or any time
prior to, the Closing Date by the Placement Agent. Notice of such cancellation
shall be given to the Offerors in writing or by telephone or facsimile confirmed
in writing.
Each
certificate signed by any trustee of the Trust or any officer of the Company or
HHT and delivered to the Placement Agent, Purchaser or their respective counsel
in connection with the Operative Documents and the transactions contemplated
hereby and thereby shall be deemed to be a representation and warranty of the
Trust, the Company and/or HHT, as the case may be, and not by such trustee or
officer in any individual capacity.
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Section
4.
Representations
and Warranties of the Offerors and HHT. The
Offerors jointly and severally represent and warrant to the Placement Agent and
the Purchaser; and HHT represents and warrants to the Placement Agent and the
Purchaser as to the matters set forth in Sections 4.7, 4.15, 4.19, 4.20, 4.27
and 4.29 below, each as of the date hereof and as of the Closing Date as
follows:
4.1
Securities
Laws Matters.
(i)
Neither
the Company nor the Trust, nor any of their “Affiliates” (as defined in Rule
501(b) of Regulation D under the Securities Act (“Regulation D”)), nor any
person acting on any of their behalf (except for the Placement Agent, as to
which neither the Company nor the Trust make any representation) has, directly
or indirectly, made offers or sales of any security, or solicited offers to buy
any security, under circumstances that would require the registration under the
Securities Act of any of the Securities.
(ii)
Neither
the Company nor the Trust, nor any of their Affiliates, nor any person acting on
its or their behalf (except for the Placement Agent, as to which neither the
Company nor the Trust make any representation) has (i) offered for sale or
solicited offers to purchase the Securities, (ii) engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of any of the Securities, or (iii) engaged in
any “directed selling efforts” within the meaning of Regulation S under the
Securities Act (“Regulation S”) with respect to the Securities.
(iii) The
Securities (i) are not and have not been listed on a national securities
exchange registered under section 6 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), or quoted on a U.S. automated interdealer
quotation system and (ii) are not of an open-end investment company, unit
investment trust or face-amount certificate company that are, or are required to
be, registered under section 8 of the Investment Company Act of 1940, as amended
(the “Investment Company Act”), and the Securities otherwise satisfy the
eligibility requirements of Rule 144A(d)(3) promulgated pursuant to the
Securities Act (“Rule 144A(d)(3)”).
(iv) Neither
the Company nor the Trust is, and, immediately following consummation of the
transactions contemplated hereby and the application of the net proceeds
therefrom, neither the Company nor the Trust will be, an “investment company” or
an entity “controlled” by an “investment company,” in each case within the
meaning of section 3(a) of the Investment Company Act.
(v)
Neither
the Company nor the Trust has paid or agreed to pay to any person or entity,
directly or indirectly, any fees or other compensation for soliciting another to
purchase any of the Securities, except for the Commission and/or any fee payable
to the Company’s introducing agent; provided, that such introducing agent has an
agreement with the Placement Agent.
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4.2 Standing
and Qualification of the Trust. The
Trust has been duly created and is validly existing in good standing as a
statutory trust under the Delaware Statutory Trust Act, 12 Del. C. §3801,
et
seq. (the
“Statutory Trust Act”) with all requisite power and authority to own property
and to conduct the business it transacts and proposes to transact and to enter
into and perform its obligations under the Operative Documents to which it is a
party. The Trust is duly qualified to transact business as a foreign entity and
is in good standing in each jurisdiction in which such qualification is
necessary, except where the failure to so qualify or be in good standing would
not have a material adverse effect on the condition (financial or otherwise),
earnings, business, prospects or assets of the Trust, whether or not occurring
in the ordinary course of business. The Trust is not a party to, or otherwise
bound by, any agreement other than the Operative Documents. The Trust is, and
under current law will continue to be, classified for federal income tax
purposes as a grantor trust and not as an association or publicly traded
partnership taxable as a corporation.
4.3 Trust
Agreement. The
Trust Agreement has been duly authorized by the Company and, on the Closing Date
specified in Section
2.3.1, will
have been duly executed and delivered by the Company and the Administrative
Trustees of the Trust, and, assuming due authorization, execution and delivery
by the Property Trustee and the Delaware Trustee, will be a legal, valid and
binding obligation of the Company and the Administrative Trustees, enforceable
against them in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally and to general
principles of equity. Each of the Administrative Trustees of the Trust is an
employee of the Company or one of its subsidiaries and has been duly authorized
by the Company to execute and deliver the Trust Agreement. To the knowledge of
the Administrative Trustees, the Trust is not in violation of any provision of
the Statutory Trust Act.
4.4 The
Indenture. The
Indenture has been duly authorized by the Company and, on the Closing Date, will
have been duly executed and delivered by the Company, and, assuming due
authorization, execution and delivery by the Indenture Trustee, will be a legal,
valid and binding obligation of the Company enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and to general principles of
equity.
4.5 Preferred
Securities and Common Securities. The
Preferred Securities and the Common Securities have been duly authorized by the
Trust and, when issued and delivered against payment therefor on the Closing
Date to the Purchaser in accordance with this Agreement and the Subscription
Agreement, in the case of the Preferred Securities, and to the Company in
accordance with the Common Securities Subscription Agreement between the Company
and the Trust, dated as of the Closing Date, in the case of the Common
Securities, will be validly issued, fully paid and nonassessable and will
represent undivided beneficial interests in the assets of the Trust entitled to
the benefits of the Trust Agreement, enforceable against the Trust in accordance
with their terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and to general principles of equity. The
issuance of the Securities is not subject to preemptive or other similar rights.
On the Closing Date, all of the issued and outstanding Common Securities will be
directly owned by the Company free and clear of any pledge, security interest,
claim, lien or other encumbrance (each, a “Lien”).
8
4.6 Junior
Subordinated Notes. The
Junior Subordinated Notes have been duly authorized by the Company and, on the
Closing Date, will have been duly executed and delivered to the Indenture
Trustee for authentication in accordance with the Indenture and, when
authenticated in the manner provided for in the Indenture and delivered to the
Trust against payment therefor in accordance with the Junior Subordinated Note
Subscription Agreement between the Company and the Trust, dated as of the
Closing Date, will constitute legal, valid and binding obligations of the
Company entitled to the benefits of the Indenture enforceable against the
Company in accordance with their terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally and to general
principles of equity.
4.7 Placement
Agreement. This
Agreement has been duly authorized, executed and delivered by the Company, HHT
and the Trust and constitutes the legal, valid and binding obligation of the
Company, HHT and the Trust, enforceable against the Company, HHT and the Trust
in accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors’ rights generally and to general principles of
equity.
4.8 Defaults. Neither
the issue and sale of the Common Securities, the Preferred Securities or the
Junior Subordinated Notes, nor the purchase of the Junior Subordinated Notes by
the Trust, the execution and delivery of and compliance with the Operative
Documents by the Company or the Trust, the consummation of the transactions
contemplated herein or therein, or the use of the proceeds therefrom, (i) will
conflict with or constitute a breach of, or a default under, the Trust Agreement
or the charter or bylaws of the Company or any subsidiary of the Company or any
applicable law, statute, rule, regulation, judgment, order, writ or decree of
any government, governmental authority, agency or instrumentality or court,
domestic or foreign, having jurisdiction over the Trust, or the Company or any
of its subsidiaries, or their respective properties or assets (collectively,
“Governmental Entities”), (ii) will conflict with or constitute a violation or
breach of, or a default or Repayment Event (as defined below) under, or result
in the creation or imposition of any Lien upon any property or assets of the
Trust, the Company or any of the Company’s subsidiaries pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which (A) the Trust, the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or (B) any of the property or
assets of any of them is subject, or any judgment, order or decree of any court,
Governmental Entity or arbitrator, except, in the case of this clause (ii), for
such conflicts, breaches, violations, defaults, Repayment Events (as defined
below) or Liens which (X) would not, singly or in the aggregate, adversely
affect the consummation of the transactions contemplated by the Operative
Documents and (Y) would not, singly or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), earnings, business,
liabilities, prospects and assets (taken as a whole) or business prospects of
the Company and its subsidiaries taken as a whole, whether or not occurring in
the ordinary course of business (a “Material Adverse Effect”) or (iii) require
the consent, approval, authorization or order of any court or Governmental
Entity. As used herein, a “Repayment Event” means any event or condition which
gives the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the Trust or
the Company or any of its subsidiaries prior to its scheduled
maturity.
4.9 Organization,
Standing and Qualification of the Company. The
Company has been duly incorporated and is validly existing as a limited
partnership in good standing under the laws of Virginia, with all requisite
partnership power and authority to own, lease and operate its properties and
conduct the business it transacts and proposes to transact, and is duly
qualified to transact business and is in good standing in each jurisdiction
where the nature of its activities requires such qualification, except where the
failure of the Company to be so qualified would not, singly or in the aggregate,
have a Material Adverse Effect.
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4.10 Subsidiaries
of the Company. The
Company has no subsidiaries that are material to its business, financial
condition or earnings other than those subsidiaries listed in Schedule
1 attached
hereto (the “Significant Subsidiaries”). Each Significant Subsidiary has been
duly organized and is validly existing and in good standing under the laws of
the jurisdiction in which it is chartered or organized, with all requisite power
and authority to own its properties and conduct the business it transacts and
proposes to transact. Each Significant Subsidiary is duly qualified to transact
business and is in good standing as a foreign entity in each jurisdiction where
the nature of its activities requires such qualification, except where the
failure of any such Significant Subsidiary to be so qualified would not, singly
or in the aggregate, have a Material Adverse Effect.
4.11 Government
Licenses. Each of
the Trust, the Company and each of its subsidiaries hold all necessary
approvals, authorizations, orders, licenses, certificates and permits
(collectively, “Government Licenses”) of and from Governmental Entities
necessary to conduct its respective business as now being conducted, and neither
the Trust, the Company nor any of the Company’s subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
Government License, except where the failure to be so licensed or approved or
the receipt of an unfavorable decision, ruling or finding, would not, singly or
in the aggregate, have a Material Adverse Effect; all of the Government Licenses
are valid and in full force and effect, except where the invalidity or the
failure of such Government Licenses to be in full force and effect, would not,
singly or in the aggregate, have a Material Adverse Effect; and the Company and
its subsidiaries are in compliance with all applicable laws, rules, regulations,
judgments, orders, decrees and consents, except where the failure to be in
compliance would not, singly or in the aggregate, have a Material Adverse
Effect.
4.12 Stock. All of
the issued and outstanding partnership units of the Company and all of the
issued and outstanding shares of capital stock of or other ownership interests
in each of its subsidiaries are validly issued, fully paid and nonassesssable;
except as set forth on Schedule
2 attached
hereto, all of the issued and outstanding capital stock of or other ownership
interests in each subsidiary of the Company is owned by the Company, directly or
through subsidiaries, free and clear of any Lien, claim or equitable right; and
none of the issued and outstanding capital stock of the Company or any
subsidiary was issued in violation of any preemptive or similar rights arising
by operation of law, under the charter or by-laws of such entity or under any
agreement to which the Company or any of its subsidiaries is a
party.
4.13 Property. Each of
the Trust, the Company and each subsidiary of the Company has good and
marketable title to all of its respective real and personal properties, in each
case free and clear of all Liens and defects, except for those that would not,
singly or in the aggregate, have a Material Adverse Effect; and all of the
leases and subleases under which the Trust, the Company or any subsidiary of the
Company holds properties are in full force and effect, except where the failure
of such leases and subleases to be in full force and effect would not, singly or
in the aggregate, have a Material Adverse Effect and none of the Trust, the
Company or any subsidiary of the Company has any notice of any claim of any sort
that has been asserted by anyone adverse to the rights of the Trust, the Company
or any subsidiary of the Company under any such leases or subleases, or
affecting or questioning the rights of such entity to the continued possession
of the leased or subleased premises under any such lease or sublease, except for
such claims that would not, singly or in the aggregate, have a Material Adverse
Effect.
10
4.14 Conflicts,
Authorizations and Approvals. Neither
the Company nor any of its subsidiaries is (i) in violation of its respective
charter, bylaws or similar organizational documents or (ii) in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument to which either the Company or any such subsidiary
is a party or by which it or any of them may be bound or to which any of the
property or assets of any of them is subject, except, in the case of clause
(ii), where such default would not, singly or in the aggregate, have a Material
Adverse Effect. No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any Governmental Entity, other
than those that have been made or obtained, is necessary or required for the
performance by the Trust or the Company of their respective obligations under
the Operative Documents, as applicable, or the consummation by the Trust and the
Company of the transactions contemplated by the Operative
Documents.
4.15 Financial
Statements.
(a) The
audited consolidated financial statements (including the notes thereto) and
schedules of HHT and its consolidated subsidiaries at and for the fiscal year
ended December 31, 2004 (the “Financial Statements”) and the interim unaudited
consolidated financial statements of HHT and its consolidated subsidiaries at
and for the quarter ended March 31, 2005 (the “Interim Financial Statements”)
provided to the Placement Agent are the most recently available audited and
unaudited consolidated financial statements of HHT and its consolidated
subsidiaries, respectively, and fairly present in all material respects, in
accordance with U.S. generally accepted accounting principles (“GAAP”), the
financial position of HHT and its consolidated subsidiaries, and the results of
operations and changes in financial condition as of the dates and for the
periods therein specified, subject, in the case of Interim Financial Statements,
to year-end adjustments (which are expected to consist solely of normal
recurring adjustments). Such consolidated financial statements and schedules
have been prepared in accordance with GAAP consistently applied throughout the
periods involved (except as otherwise noted therein).
(b) Since the
respective dates of the Financial Statements and Interim Financial Statements,
there has not been (A) any material adverse change or development with respect
to the condition (financial or otherwise), earnings, business, assets or
business prospects of HHT and its subsidiaries, taken as a whole, or the Company
and its subsidiaries, taken as a whole, whether or not occurring in the ordinary
course of business or (B) any dividend or distribution of any kind declared,
paid or made by the Company on any of its partnership units or by HHT on any
class of its capital stock other than regular quarterly dividends on HHT’s
common stock.
11
(c) The
accountants of HHT who certified the Financial Statements are independent public
accountants of HHT and its subsidiaries within the meaning of the Securities Act
and the rules and regulations of the Securities and Exchange Commission (“SEC”)
thereunder.
4.16 No
Undisclosed Liabilities. None of
the Trust, the Company nor any of its subsidiaries has any material liability,
whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for taxes (and there
is no past or present fact, situation, circumstance, condition or other basis
for any present or future action, suit, proceeding, hearing, charge, complaint,
claim or demand against the Company or its subsidiaries that could give rise to
any such liability), except for (i) liabilities set forth in the Financial
Statements or the Interim Financial Statements and (ii) normal fluctuations
in the amount of the liabilities referred to in clause (i) above occurring
in the ordinary course of business of the Trust, the Company and all of its
subsidiaries since the date of the most recent balance sheet included in such
Financial Statements.
4.17 Litigation. There is
no action, suit or proceeding before or by any Governmental Entity, arbitrator
or court, domestic or foreign, now pending or, to the knowledge of the Company
or the Trust after due inquiry, threatened against or affecting the Trust or the
Company or any of the Company’s subsidiaries, except for such actions, suits or
proceedings that, if adversely determined, would not, singly or in the
aggregate, adversely affect the consummation of the transactions contemplated by
the Operative Documents or have a Material Adverse Effect; and the aggregate of
all pending legal or governmental proceedings to which the Trust or the Company
or any of its subsidiaries is a party or of which any of their respective
properties or assets is subject, including ordinary routine litigation
incidental to the business, are not expected to result in a Material Adverse
Effect.
4.18 No
Labor Disputes. No
labor dispute with the employees of the Trust, the Company or any of its
subsidiaries exists or, to the knowledge of the executive officers of the Trust
or the Company, is imminent, except those which would not, singly or in the
aggregate, have a Material Adverse Effect.
4.19 Filings
with the SEC. The
documents of HHT filed with the SEC in accordance with the Exchange Act, from
and including the commencement of the fiscal year covered by HHT’s most recent
Annual Report on Form 10-K, at the time they were or hereafter are filed by HHT
with the SEC (collectively, the “1934 Act Reports”), complied and will comply in
all material respects with the requirements of the Exchange Act and the rules
and regulations of the SEC thereunder (the “1934 Act Regulations”), and, at the
date of this Agreement and on the Closing Date, do not and will not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and other than
such instruments, agreements, contracts and other documents as are filed as
exhibits to HHT’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q or
Current Reports on Form 8-K, there are no instruments, agreements, contracts or
documents of a character described in Item 601 of Regulation S-K
promulgated by the SEC to which HHT or any of its subsidiaries is a party. HHT
is in compliance with all currently applicable requirements of the Exchange Act
that were added by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002.
12
4.20 Tax
Returns. The
Company, HHT and each of the Significant Subsidiaries have timely and duly filed
all Tax Returns (defined below) required to be filed by them, and all such Tax
Returns are true, correct and complete in all material respects. The Company,
HHT and each of the Significant Subsidiaries have timely and duly paid in full
all material Taxes required to be paid by them prior to the date hereof (whether
or not such amounts are shown as due on any Tax Return). To the Company’s
knowledge, there are no federal, state, or other Tax audits or deficiency
assessments proposed or pending with respect to the Company, HHT or any of the
Significant Subsidiaries, and to the Company’s knowledge no such audits or
assessments are threatened. As used herein, the terms “Tax” or
“Taxes” mean
(i) all federal, state, local, and foreign taxes, and other assessments of a
similar nature (whether imposed directly or through withholding), including any
interest, additions to tax, or penalties applicable thereto, imposed by any
Governmental Entity, and (ii) all liabilities in respect of such amounts arising
as a result of being a member of any affiliated, consolidated, combined, unitary
or similar group, as a successor to another person or by contract. As used
herein, the term “Tax
Returns” means
all federal, state, local, and foreign Tax returns, declarations, statements,
reports, schedules, forms, and information returns and any amendments thereto
filed or required to be filed with any Governmental Entity.
4.21 Taxes. The
Trust is not subject to United States federal income tax with respect to income
received or accrued on the Junior Subordinated Notes, interest payable by the
Company on the Junior Subordinated Notes is deductible by the Company, in whole
or in part, for United States federal income tax purposes, and the Trust is not,
or will not be within ninety (90) days of the date hereof, subject to more than
a de
minimis amount
of other taxes, duties or other governmental charges. There are no rulemaking or
similar proceedings before the United States Internal Revenue Service or
comparable federal, state, local or foreign government bodies which involve or
affect the Company or any subsidiary, which, if the subject of an action
unfavorable to the Company or any subsidiary, could result in a Material Adverse
Effect.
4.22 Books
and Records. The
books, records and accounts of the Company and its subsidiaries accurately and
fairly reflect, in reasonable detail, the transactions in, and dispositions of,
the assets of, and the results of operations of, the Company and its
subsidiaries. The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
13
4.23 Insurance. The
Company and the Significant Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts in
all material respects as are customary in the businesses in which they are
engaged or propose to engage after giving effect to the transactions
contemplated hereby, including, but not limited to, real or personal property
owned or leased against theft, damage, destruction, act of vandalism and all
other risks customarily insured against. All policies of insurance and fidelity
or surety bonds insuring the Company or any of the Significant Subsidiaries or
the Company’s or Significant Subsidiaries’ respective businesses, assets,
employees, officers and directors are in full force and effect. The Company and
each of the Significant Subsidiaries are in compliance with the terms of such
policies and instruments in all material respects. Neither the Company nor any
Significant Subsidiary has reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect. Within the
past twelve months, neither the Company nor any Significant Subsidiary has been
denied any insurance coverage which it has sought or for which it has
applied.
4.24 Corporate
Funds. The
Company and its subsidiaries or any person acting on behalf of the Company and
its subsidiaries including, without limitation, any director, officer, agent or
employee of the Company or its subsidiaries has not, directly or indirectly,
while acting on behalf of the Company and its subsidiaries (i) used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (ii) made any unlawful payment
to foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds; (iii) violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made
any other unlawful payment.
14
4.25 Environmental
Laws. Except
as would not, individually or in the aggregate, result in a Material Adverse
Effect, (i) the Company and its subsidiaries have been and are in compliance
with applicable Environmental Laws (as defined below), (ii) none of the Company,
any of its subsidiaries or, to the best of the Company’s knowledge, any other
owners of any of the real property owned, leased, operated or managed by the
Company or any of its subsidiaries (the “Properties”) at any time or any other
party, has at any time released (as such term is defined in CERCLA (as defined
below)) or otherwise disposed of Hazardous Materials (as defined below) on, to,
in, under or from the Properties or any other real properties previously owned,
leased or operated by the Company or any of its subsidiaries, (iii) neither the
Company nor any of its subsidiaries intends to use the Properties or any
subsequently acquired properties, other than in compliance with applicable
Environmental Laws, (iv) neither the Company nor any of its subsidiaries has
received any notice of, or has any knowledge of any occurrence or circumstance
which, with notice or passage of time or both, would give rise to a claim under
or pursuant to any Environmental Law with respect to the Properties, any other
real properties previously owned, leased or operated by the Company or any of
its subsidiaries, or their respective assets or arising out of the conduct of
the Company or its subsidiaries, (v) none of the Properties are included or, to
the best of the Company’s knowledge, proposed for inclusion on the National
Priorities List issued pursuant to CERCLA by the United States Environmental
Protection Agency or, to the best of the Company’s knowledge, proposed for
inclusion on any similar list or inventory issued pursuant to any other
Environmental Law or issued by any other Governmental Entity, (vi) none of the
Company, any of its subsidiaries or agents or, to the Company’s knowledge, any
other person or entity for whose conduct any of them is or may be held
responsible, has generated, manufactured, refined, transported, treated, stored,
handled, disposed, transferred, produced or processed any Hazardous Material at
any of the Properties, except in compliance with all applicable Environmental
Laws, and has not transported or arranged for the transport of any Hazardous
Material from the Properties or any other real properties previously owned,
leased or operated by the Company or any of its subsidiaries to another
property, except in compliance with all applicable Environmental Laws, (vii) no
lien has been imposed on the Properties by any Governmental Entity in connection
with the presence on or off such Property of any Hazardous Material, and (viii)
none of the Company, any of its subsidiaries or, to the Company’s knowledge, any
other person or entity for whose conduct any of them is or may be held
responsible, has entered into or been subject to any consent decree, compliance
order, or administrative order with respect to the Properties or any facilities
or improvements or any operations or activities thereon.
As used
herein, “Hazardous
Material” shall
include, without limitation, any flammable materials, explosives, radioactive
materials, hazardous materials, hazardous substances, hazardous wastes, toxic
substances or related materials, asbestos, petroleum, petroleum products and any
hazardous material as defined by any federal, state or local environmental law,
statute, ordinance, rule or regulation, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. §§ 9601-9675 (“CERCLA”), the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. §§ 5101-5127,
the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
§§ 6901-6992k, the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. §§ 11001-11050, the Toxic Substances Control Act, 15 U.S.C.
§§ 2601-2692, the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. §§ 136-136y, the Clean Air Act, 42 U.S.C. §§ 7401-7642, the
Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C.
§§ 1251-1387, the Safe Drinking Water Act, 42 U.S.C. §§ 300f-300j-26,
and the Occupational Safety and Health Act, 29 U.S.C. §§ 651-678, and any
analogous state laws, as any of the above may be amended from time to time and
in the regulations promulgated pursuant to each of the foregoing (including
environmental statutes and laws not specifically defined herein) (individually,
an “Environmental
Law” and
collectively, the “Environmental
Laws”) or by
any Governmental Entity.
15
4.26 Review
of Environmental Laws. In the
ordinary course of its business, the Company periodically reviews the effect of
Environmental Laws on the business, operations and properties of the Company and
its subsidiaries, and periodically identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties). On the
basis of such reviews and the amount of its established reserves, the Company
has reasonably concluded that such associated costs and liabilities would not,
individually or in the aggregate, result in a Material Adverse
Change.
4.27 REIT
Status. HHT is
organized in conformity with the requirements for qualification as a real estate
investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended
(the “Code”), and the present and contemplated method of operation of HHT and
its subsidiaries does and will enable HHT to meet the requirements for taxation
as a REIT under the Code.
4.28 OSHA
Compliance. Neither
the Company nor any of its subsidiaries is in violation of any federal or state
law or regulation relating to occupational safety and health and the Company and
its subsidiaries have received all permits, licenses or other approvals required
of them under applicable federal and state occupational safety and health and
environmental laws and regulations to conduct their respective businesses, and
the Company and each of its subsidiaries is in compliance with all terms and
conditions of any such permit, license or approval, except any such violation of
law or regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals which would not, singly or in the aggregate result in a
Material Adverse Effect.
4.29 Information. The
information provided by the Company, HHT and the Trust pursuant to this
Agreement does not, as of the date hereof, and will not, as of the Closing Date,
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
Section
5.
Representations
and Warranties of the Placement Agent. The
Placement Agent represents and warrants to, and agrees with, the Company and the
Trust as follows:
5.1 General
Solicitation. Neither
the Placement Agent, nor any of the Placement Agent’s affiliates, nor any person
acting on the Placement Agent’s or the Placement Agent’s Affiliate’s behalf has
engaged, or will engage, in any form of “general solicitation or general
advertising” (within the meaning of Regulation D under the Securities Act) in
connection with any offer or sale of the Preferred Securities.
16
5.2 Purchaser. The
Placement Agent has made such reasonable inquiry as is necessary to determine
that the Purchaser is acquiring the Preferred Securities for its own account,
the Purchaser does not intend to distribute the Preferred Securities in
contravention of the Securities Act or any other applicable securities
laws.
5.3 Qualified
Purchasers. The
Placement Agent has not offered or sold, and will not arrange for the offer or
sale of, the Preferred Securities except (i) to those the Placement Agent
reasonably believes are institutional “accredited investors” (within the meaning
of subparagraph (a)(1), (2), (3) or (7) of Rule 501 of Regulation D), (ii) in an
offshore transaction complying with Rule 903 of Regulation S or (iii) in any
other manner that does not require registration of the Preferred Securities
under the Securities Act. In connection with each such sale, the Placement Agent
has taken or will take reasonable steps to ensure that the Purchaser is aware
that (a) such sale is being made in reliance on an exemption under the
Securities Act and (b) future transfers of the Preferred Securities may not be
made except in compliance with applicable securities laws.
5.4 Offering
Circulars. Neither
the Placement Agent nor its representatives will include any nonpublic
information about the Company, the Trust or any of their affiliates in any
registration statement, prospectus, offering circular or private placement
memorandum used in connection with any purchase of Preferred Securities without
the prior written consent of the Trust and the Company.
Section
6. Covenants
of the Offerors. The
Offerors covenant and agree with the Placement Agent and the Purchaser as
follows:
6.1 Compliance
with Representations and Warranties. During
the period from the date of this Agreement to the Closing Date, the Offerors and
HHT shall use their reasonable best efforts and take all action necessary or
appropriate to cause their representations and warranties contained in
Section 4 hereof
to be true as of the Closing Date, after giving effect to the transactions
contemplated by this Agreement, as if made on and as of the Closing
Date.
6.2 Sale
and Registration of Securities. Neither
the Company nor the Trust will, nor will either of them permit any of its
Affiliates to, nor will either of them permit any person acting on its or their
behalf (other than the Placement Agent and the Purchaser and their respective
affiliates) to, directly or indirectly, (i) resell any Preferred Securities that
have been acquired by any of them, (ii) sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in the
Securities Act) that would or could be integrated with the sale of the Preferred
Securities in any manner that would require the registration of the Securities
under the Securities Act or (iii) make offers or sales of any such Security, or
solicit offers to buy any such Security, under any circumstances that would
require the registration of any of such Securities under the Securities
Act.
6.3 Lock
Up. Neither
the Company, HHT nor the Trust will, until one hundred eighty (180) days
following the Closing Date, without the Purchaser’s prior written consent,
offer, sell, contract to sell, grant any option to purchase or otherwise dispose
of, directly or indirectly, (i) any Preferred Securities or other securities of
the Trust other than as contemplated by this Agreement or (ii) any other
securities convertible into, or exercisable or exchangeable for, any Preferred
Securities or other securities of the Trust.
17
6.4 Qualification
of Securities. The
Company and the Trust will arrange for the qualification of the Preferred
Securities for sale under the laws of such jurisdictions as the Placement Agent
may designate and will maintain such qualifications in effect so long as
required for the sale of the Preferred Securities. The Company or the Trust, as
the case may be, will promptly advise the Placement Agent of the receipt by the
Company or the Trust, as the case may be, of any notification with respect to
the suspension of the qualification of the Preferred Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
6.5 Use of
Proceeds. The
Trust shall use the proceeds from the sale of the Preferred Securities and the
Common Securities to purchase the Junior Subordinated Notes from the
Company.
6.6 Investment
Company. So long
as any of the Securities are outstanding, (i) the Securities shall not be listed
on a national securities exchange registered under section 6 of the Exchange Act
or quoted in a U.S. automated interdealer quotation system, (ii) neither the
Company nor the Trust shall be an open-end investment company, unit investment
trust or face-amount certificate company that is, or is required to be,
registered under section 8 of the Investment Company Act, and, the Securities
shall otherwise satisfy the eligibility requirements of Rule 144A(d)(3) and
(iii) neither of the Offerors shall engage, or permit any subsidiary to engage,
in any activity which would cause it or any subsidiary to be an “investment
company” under the provisions of the Investment Company Act.
6.7 Solicitation
and Advertising. Neither
the Company nor the Trust will, nor will either of them permit any of their
Affiliates or any person acting on their behalf to (other than the Placement
Agent, the Purchaser or their respective affiliates), (i) engage in any
“directed selling efforts” within the meaning of Regulation S under the
Securities Act or (ii) engage in any form of “general solicitation or general
advertising” (within the meaning of Regulation D) in connection with any offer
or sale of any of the Securities.
6.8 Compliance
with Rule 144A(d)(4) under the Securities Act. So long
as any of the Securities are outstanding and are “restricted securities” within
the meaning of Rule 144(a)(3) under the Securities Act, the Offerors will,
during any period in which they are not subject to and in compliance with
Section 13 or 15(d) of the Exchange Act, or the Offerors are not exempt from
such reporting requirements pursuant to and in compliance with Rule 12g3-2(b)
under the Exchange Act, provide to each holder of such restricted securities and
to each prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser in
connection with any proposed transfer, any information required to be provided
by Rule 144A(d)(4) under the Securities Act, if applicable. The information
provided by the Offerors pursuant to this Section
6.8 will
not, at the date thereof, contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. If the
Company and the Trust are required to register under the Exchange Act, such
reports filed in compliance with Rule 12g3-2(b) shall be sufficient information
as required above. This covenant is intended to be for the benefit of the
Purchaser, the holders of the Securities, and the prospective purchasers
designated by such holders, from time to time, of the Securities.
18
6.9 Reports. HHT
shall furnish to (i) the Placement Agent, (ii) the Purchaser and any subsequent
holder of the Securities, and (iii) any beneficial owner of the Securities
reasonably identified to HHT (which identification may be made by either such
beneficial owner or by the Purchaser), a duly completed and executed certificate
in the form attached hereto as Annex F, including the financial statements
referenced in such Annex, which certificate and financial statements shall be so
furnished by HHT not later than forty-five (45) days after the end of each of
the first three fiscal quarters of each fiscal year of HHT and not later than
ninety (90) days after the end of each fiscal year of HHT. The
delivery requirements under this Section 6.9 may be satisfied by compliance with
Section 7.3(b) of the Indenture.
Section
7.
Covenants
of the Placement Agent. The
Placement Agent covenants and agrees with the Offerors that, during the period
from the date of this Agreement to the Closing Date, the Placement Agent shall
use its best efforts and take all action necessary or appropriate to cause its
representations and warranties contained in Section
5 to be
true as of the Closing Date, after giving effect to the transactions
contemplated by this Agreement, as if made on and as of the Closing Date. The
Placement Agent further covenants and agrees not to engage in hedging
transactions with respect to the Preferred Securities unless such transactions
are conducted in compliance with the Securities Act.
Section
8.
Indemnification
& Contribution.
8.1 Indemnification.
8.1.1
The
Company, HHT and the Trust agree jointly and severally to indemnify and hold
harmless the Placement Agent, the Purchaser, the Placement Agent’s affiliates, a
Subsequent Purchaser (collectively, the “Indemnified Parties”) and the
Indemnified Parties’ respective directors, officers, employees and agents and
each person who “controls” the Indemnified Parties within the meaning of either
the Securities Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in any information or documents furnished or made
available to the Purchaser or the Placement Agent by or on behalf of the
Company, (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (iii) the breach or alleged breach of any representation,
warranty or agreement of either Offeror or HHT contained herein, and agrees to
reimburse each such Indemnified Party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which the Company, HHT or the
Trust may otherwise have.
19
8.1.2 Promptly
after receipt by an Indemnified Party under this Section 8 of
notice of the commencement of any action, such Indemnified Party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8,
promptly notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve
the indemnifying party from liability under Section
8.1.1 above
unless and to the extent that such failure results in the forfeiture by the
indemnifying party of material rights and defenses and (ii) will not, in
any event, relieve the indemnifying party from any obligations to any
Indemnified Party other than the indemnification obligation provided in
Section
8.1.1 above.
The Placement Agent shall be entitled to appoint counsel to represent the
Indemnified Party in any action for which indemnification is sought. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the Indemnified Party) also be counsel to the
Indemnified Party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all Indemnified Parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. An
indemnifying party will not, without the prior written consent of the
Indemnified Parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not the Indemnified Parties are actual or potential parties to such claim,
action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of each Indemnified Party from all liability
arising out of such claim, action, suit or proceeding.
8.2 Contribution.
8.2.1
In order
to provide for just and equitable contribution in circumstances under which the
indemnification provided for in Section
8.1 hereof
is for any reason held to be unenforceable for the benefit of an Indemnified
Party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such Indemnified Party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Offerors, on the
one hand, and the Placement Agent, on the other hand, from the offering of the
Securities or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause
(i) above,
but also the relative fault of the Offerors, on the one hand, and the Placement
Agent, on the other hand, in connection with the statements, omissions or
breaches, which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
8.2.2 The
relative benefits received by the Offerors and HHT, on the one hand, and the
Placement Agent, on the other hand, in connection with the offering of the
Securities shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Securities (before deducting expenses)
received by the Offerors and HHT and the Commission received by the Placement
Agent bear to the aggregate of such net proceeds and
Commission.
20
8.2.3 The
Offerors and HHT and the Placement Agent agree that it would not be just and
equitable if contribution pursuant to this Section 8.2 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 8.2. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an Indemnified Party and referred to above in this Section 8.2 shall be
deemed to include any legal or other expenses reasonably incurred by such
Indemnified Party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement, omission or alleged omission or breach or
alleged breach.
8.2.4 Notwithstanding
any provision of this Section 8 to the
contrary, the Placement Agent shall not be required to contribute any amount in
excess of the amount of the Commission.
8.2.5 No person
guilty of fraudulent misrepresentation (within the meaning of section 11(f)
of the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
8.2.6 For
purposes of this Section 8.2, the
Placement Agent, each person, if any, who controls the Placement Agent within
the meaning of section 15 of the Securities Act or section 20 of the
Exchange Act and the respective partners, directors, officers, employees and
agents of the Placement Agent or any such controlling person shall have the same
rights to contribution as the Placement Agent, while each officer and director
of the Company, each trustee of the Trust and each person, if any, who controls
the Company within the meaning of section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution
as the Offerors.
8.3 Additional
Remedies. The
indemnity and contribution agreements contained in this Section
8 are in
addition to any liability that the Offerors and HHT may otherwise have to any
Indemnified Party.
8.4 Additional
Indemnification. The
Company shall indemnify and hold harmless the Trust against all loss, liability,
claim, damage and expense whatsoever, as due from the Trust under Sections
8.1 through
8.3
hereof.
Section
9.
Rights
and Responsibilities of Placement Agent.
9.1 Reliance. In
performing its duties under this Agreement, the Placement Agent shall be
entitled to rely upon any notice, signature or writing which it shall in good
faith believe to be genuine and to be signed or presented by a proper party or
parties. The Placement Agent may rely upon any opinions or certificates or other
documents delivered by the Offerors, HHT or their counsel or designees to either
the Placement Agent or the Purchaser.
9.2 Rights
of Placement Agent. In
connection with the performance of its duties under this Agreement, the
Placement Agent shall not be liable for any error of judgment or any action
taken or omitted to be taken unless the Placement Agent was grossly negligent or
engaged in willful misconduct in connection with such performance or
non-performance. No provision of this Agreement shall require the Placement
Agent to expend or risk its own funds or otherwise incur any financial liability
on behalf of the Purchaser in connection with the performance of any of its
duties hereunder. The Placement Agent shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement.
21
Section
10.
Termination. This
Agreement shall be subject to termination in the absolute discretion of the
Placement Agent, by notice given to the Company and the Trust prior to delivery
of and payment for the Preferred Securities, if prior to such time (i) a
downgrading shall have occurred in the rating accorded the Company’s or HHT’s
debt securities or preferred stock by any “nationally recognized statistical
rating organization,” as that term is used by the SEC in Rule
15c3-1(c)(2)(vi)(F) under the Exchange Act, or such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of the Company’s or HHT’s debt securities or
preferred stock, (ii) the Trust shall be unable to sell and deliver to the
Purchaser at least $25,000,000 stated liquidation value of Preferred Securities,
(iii) a suspension or material limitation in trading in securities generally
shall have occurred on the New York Stock Exchange, (iv) a suspension or
material limitation in trading in any of the Company’s or HHT’s securities shall
have occurred on the exchange or quotation system upon which the Company’s or
HHT’s securities are traded, if any, (v) there shall have occurred any
outbreak or escalation of hostilities, or declaration by the United States of a
national emergency or war or other calamity or crisis the effect of which on
financial markets is such as to make it, in the Placement Agent’s or Purchaser’s
judgment, impracticable or inadvisable to proceed with the offering or delivery
of the Preferred Securities.
Section
11.
Miscellaneous.
11.1 Disclosure
Schedule. The term
“Disclosure Schedule,” as used herein, means the schedule, if any, attached to
this Agreement that sets forth items the disclosure of which is necessary or
appropriate as an exception to one or more representations or warranties
contained in Section
4 hereof.
The Disclosure Schedule shall be arranged in paragraphs corresponding to the
section numbers contained in Section
4. Nothing
in the Disclosure Schedule shall be deemed adequate to disclose an exception to
a representation or warranty made herein unless the Disclosure Schedule
identifies the exception with reasonable particularity and describes the
relevant facts in reasonable detail. Without limiting the generality of the
immediately preceding sentence, the mere listing (or inclusion of a copy) of a
document or other item in the Disclosure Schedule shall not be deemed adequate
to disclose an exception to a representation or warranty made herein unless the
representation or warranty has to do with the existence of the document or other
item itself. Information provided by the Company in response to any due
diligence questionnaire shall not be deemed part of the Disclosure Schedule and
shall not be deemed to be an exception to one or more representations or
warranties contained in Section
4 hereof
unless such information is specifically included on the Disclosure Schedule in
accordance with the provisions of this Section
11.1.
11.2 Notices. All
communications hereunder will be in writing and effective only on receipt, and
will be mailed, delivered by hand or courier or sent by facsimile and
confirmed:
22
If to the
Placement Agent, to:
Credit
Suisse First Boston LLC
Eleven
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
The CDO Group
with a
copy to:
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇ llp
Two World
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
if to the
Offerors or HHT, to:
Hersha
Hospitality Limited Partnership
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
Telephone:
▇▇▇-▇▇▇-▇▇▇▇
Attention:
Chief Financial Officer
with a
copy to:
Hunton
& ▇▇▇▇▇▇▇▇ llp
Riverfront
Plaza, East Tower
▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Esq.
All such
notices and communications shall be deemed to have been duly given (i) at the
time delivered by hand, if personally delivered, (ii) five business days after
being deposited in the mail, postage prepaid, if mailed, (iii) when answered
back, if telexed, (iv) the next business day after being telecopied, or (v) the
next business day after timely delivery to a courier, if sent by overnight air
courier guaranteeing next-day delivery. From and after the Closing, the
foregoing notice provisions shall be superseded by any notice provisions of the
Operative Documents under which notice is given. The Placement Agent, the
Company, HHT and their respective counsel, may change their respective notice
addresses, from time to time, by written notice to all of the foregoing
persons.
11.3 Parties
in Interest, Successors and Assigns. This
Agreement will inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
other than the parties hereto and the affiliates, directors, officers,
employees, agents and controlling persons referred to in Section
8 hereof,
their successors, assigns, heirs and legal representatives, and any Subsequent
Purchaser, any right or obligation hereunder. None of the rights or obligations
of the Company, HHT or the Trust under this Agreement may be assigned, whether
by operation of law or otherwise, without the Placement Agent’s prior written
consent. The rights and obligations of the Placement Agent and Purchaser under
this Agreement may be assigned by such party without the Company’s, HHT’s or the
Trust’s consent; provided that the assignee assumes the obligations of such
party under this Agreement.
23
11.4 Amendments. This
Agreement may not be modified, amended, altered or supplemented, except upon the
execution and delivery of a written agreement by each of the parties
hereto.
11.5 Counterparts
and Facsimile. This
Agreement may be executed by any one or more of the parties hereto in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument. This
Agreement may be executed by any one or more of the parties hereto by
facsimile.
11.6 Headings. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
11.7 Governing
Law. THIS
AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW
(OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).
11.8 Submission
to Jurisdiction. ANY
LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR
ARISING OUT OF THIS AGREEMENT MAY BE BROUGHT IN OR REMOVED TO THE COURTS OF THE
STATE OF NEW YORK, IN AND FOR THE COUNTY OF NEW YORK, OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE SITTING IN THE
BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY
ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS (AND COURTS OF APPEALS
THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT.
11.9 Entire
Agreement. This
Agreement, together with the Operative Documents and the other documents
delivered in connection with the transactions contemplated by this Agreement, is
intended by the parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein. This Agreement, together with
the Operative Documents and the other documents delivered in connection with the
transaction contemplated by this Agreement, supersedes all prior agreements and
understandings between the parties with respect to such subject
matter.
24
11.10
Severability. In the
event that any one or more of the provisions contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected, it being
intended that all of the Placement Agent’s and the Purchaser’s rights and
privileges shall be enforceable to the fullest extent permitted by
law.
11.11
Survival. The
respective agreements, representations, warranties, indemnities and other
statements of the Company, HHT and the Trust and their respective officers or
trustees and of the Placement Agent set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of the Placement Agent, the Purchaser, the Company, HHT or
the Trust or any of their respective officers, directors, trustees or
controlling persons, and will survive delivery of and payment for the Preferred
Securities. The provisions of Sections
2.4 and
8 shall
survive the termination or cancellation of this Agreement.
Signatures
appear on the following page
25
If this
Agreement is satisfactory to you, please so indicate by signing the acceptance
of this Agreement and deliver such counterpart to the Offerors whereupon this
Agreement will become binding between us in accordance with its
terms.
Very
truly yours,
|
Hersha
Hospitality Limited Partnership | ||
|
By:
Hersha Hospitality Trust, its general partner | ||
|
By: |
||
|
Name: | ||
|
Title: | ||
|
By: |
| |
|
Name: | ||
|
Title: | ||
|
Hersha
Statutory Trust II | ||
|
By:
Hersha Hospitality Limited Partnership, as Depositor | ||
|
By: |
||
|
Name: | ||
|
Title: | ||
CONFIRMED
AND ACCEPTED
as of the
date first set forth above
|
Credit
Suisse First Boston LLC, as Placement Agent |
||
|
By: |
||
|
Name: |
||
|
Title: |
||
26
Schedule
1
List of
Significant Subsidiaries
44 New
England Management Company, a Virginia corporation
27
EXHIBIT
A
FORM OF
SUBSCRIPTION AGREEMENT
PREFERRED
SECURITIES SUBSCRIPTION AGREEMENT
May 31,
2005
THIS
PREFERRED SECURITIES SUBSCRIPTION AGREEMENT (this
“Agreement”) made among Hersha Statutory Trust II (the “Trust”), a statutory
trust created under the Delaware Statutory Trust Act (12 Del. C. §3801,
et
seq.),
Hersha Hospitality Limited Partnership, a Virginia limited partnership, with its
principal offices located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the “Company” and, together with the Trust,
the “Offerors”), Hersha Hospitality Trust, a Maryland corporation (“HHT”) and
Credit Suisse First Boston, acting through its Cayman Islands branch, a Swiss
banking corporation (the “Purchaser”), and Credit Suisse First Boston LLC (as to
Sections 1.2, 1.3 and Article III).
RECITALS:
A. The Trust
desires to issue TWENTY-FIVE
MILLION
($25,000,000) DOLLARS of its
Preferred Securities (the “Preferred Securities”), liquidation amount $1,000 per
Preferred Security, representing an undivided beneficial interest in the assets
of the Trust (the “Offering”), to be issued pursuant to an Amended and Restated
Trust Agreement (the “Trust Agreement”) by and among the Company, Wilmington
Trust Company, as Property Trustee (the “Property Trustee”), Wilmington Trust
Company, as Delaware Trustee the administrative trustees named therein and the
Holders (as defined therein); and
B. The
proceeds from the sale of the Preferred Securities will be combined with the
proceeds from the sale by the Trust to the Company of its Common Securities, and
will be used by the Trust to purchase an equivalent amount of Junior
Subordinated Notes of the Company (the “Notes”) to be issued by the Company
pursuant to an indenture (the “Indenture”) to be executed by the Company and
Wilmington Trust Company as Indenture Trustee; and
C. In
consideration of the premises and the mutual representations and covenants
hereinafter set forth, the parties hereto agree as follows:
Article
I
PURCHASE
AND SALE OF PREFERRED SECURITIES
1.1 Upon the
execution of this Agreement, the Purchaser hereby agrees to purchase, directly
or indirectly, from the Trust, Preferred Securities at a price equal to $1,000
per Preferred Security for an aggregate purchase price equal to TWENTY-FIVE
MILLION
($25,000,000) DOLLARS (the
“Purchase Price”) and the Trust agrees to sell such Preferred Securities to the
Purchaser for said Purchase Price. The rights and preferences of the Preferred
Securities are set forth in the Trust Agreement. The closing of the sale and
purchase of the Preferred Securities shall occur on May 31, 2005, or such other
later date (not later than June 29, 2005) as the parties may designate (the
“Closing Date”). The Purchase Price is payable in immediately available funds on
the Closing Date. The Offerors shall provide the Purchaser payment instructions
no later than two (2) days prior to the Closing Date.
A-1
1.2 The
Placement Agreement, dated as of May 31, 2005 (the “Placement Agreement”), among
the Offerors, HHT and the Placement Agent identified therein (the “Placement
Agent”) includes certain representations and warranties, covenants and
conditions to closing and certain other matters governing the Offering. The
Placement Agreement is hereby incorporated by reference into this Agreement, and
the Purchaser shall be entitled to each of the benefits of the Placement Agent
and the Purchaser under the Placement Agreement and shall be entitled to enforce
the obligations of the Offerors and HHT under such Placement Agreement as fully
as if the Purchaser were a party to such Placement Agreement.
1.3 The
Purchaser is purchasing the Preferred Securities in its capacity as a warehouse
lender, and Purchaser may resell the Preferred Securities to a subsequent
purchaser (any such purchaser from the Purchaser being referred to hereinafter
as a “Subsequent Purchaser”). Upon transfer of the Preferred Securities to a
Subsequent Purchaser, the Subsequent Purchaser shall be entitled to each of the
benefits of the Placement Agent and the Purchaser under the Placement Agreement
and this Agreement, and shall be entitled to enforce the obligations of the
Offerors and HHT under the Placement Agreement and this Agreement, as fully as
if the Subsequent Purchaser were a party to the Placement Agreement and this
Agreement.
Article
II
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
2.1 The
Purchaser understands and acknowledges that the Preferred Securities and the
Notes (i) have not been registered under the Securities Act of 1933, as amended
(the “Securities Act”), or any other applicable securities law, (ii) are being
offered for sale by the Offerors in transactions not requiring registration
under the Securities Act and (iii) may not be offered, sold, pledged or
otherwise transferred by the Purchaser except in compliance with the
registration requirements of the Securities Act or any other applicable
securities laws, pursuant to an exemption therefrom or in a transaction not
subject thereto.
2.2 Neither
the Purchaser nor any
of the Purchaser’s affiliates, nor any person acting on the Purchaser’s or the
Purchaser’s Affiliate’s behalf has engaged, or will engage, in any form of
"general solicitation or general advertising" (within the meaning of Regulation
D under the Securities Act) or "directed selling efforts" (within the meaning of
Regulation S under the Securities Act) in connection with any offer or sale of
the Preferred Securities.
2.3 The
Purchaser represents and warrants that it is purchasing the Preferred Securities
for its own account and not with a view to, or for offer or sale in connection
with, any distribution thereof in violation of the Securities Act or other
applicable securities laws, subject to any requirement of law that the
disposition of its property be at all times within its control and subject to
its ability to resell such Preferred Securities pursuant to an effective
registration statement under the Securities Act or under Rule 144A or any other
exemption from registration available under the Securities Act or any other
applicable securities law. The Purchaser understands that no public market
exists for any of the Preferred Securities, and that it is unlikely that a
public market will ever exist for the Preferred Securities.
A-2
2.4 The
Purchaser represents and warrants that (a) it has consulted with its own legal,
regulatory, tax, business, investment, financial and accounting advisers in
connection herewith to the extent it has deemed necessary; (b) it has had a
reasonable opportunity to ask questions of and receive answers from officers and
representatives of the Offerors concerning their respective financial condition
and results of operations and the purchase of the Preferred Securities and any
such questions have been answered to its satisfaction; (c) it has had the
opportunity to review all publicly available records and filings concerning the
Offerors and it has carefully reviewed such records and filings that it
considers relevant to making an investment decision; and (d) it has made its own
investment decisions based upon its own judgment, due diligence and advice from
such advisers as it has deemed necessary and not upon any view expressed by the
Offerors or the Placement Agent.
2.5 The
Purchaser represents and warrants that it is an institutional “accredited
investor” within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
of Regulation D under the Securities Act.
Article
III
MISCELLANEOUS
3.1 Any
notice or other communication given hereunder shall be deemed sufficient if in
writing and sent by registered or certified mail, return receipt requested,
international courier or delivered by hand against written receipt therefor, or
by facsimile transmission and confirmed by telephone, to the following
addresses, or such other address as may be furnished to the other parties as
herein provided:
|
To
the Offerors and HTT: |
Hersha
Hospitality Limited Partnership |
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
Attention:
Chief Financial Officer
|
To
the Purchaser: |
Credit
Suisse First Boston, acting through its Cayman Islands
branch |
c/o
Credit Suisse First Boston LLC
Eleven
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
The CDO Group
Unless
otherwise expressly provided herein, notices shall be deemed to have been given
on the date of mailing, except notice of change of address, which shall be
deemed to have been given when received.
3.2 This
Agreement shall not be changed, modified or amended except by a writing signed
by the parties to be charged, and this Agreement may not be discharged except by
performance in accordance with its terms or by a writing signed by the party to
be charged.
A-3
3.3 Upon the
execution and delivery of this Agreement by the Purchaser, this Agreement shall
become a binding obligation of the Purchaser with respect to the purchase of
Preferred Securities as herein provided.
3.4 NOTWITHSTANDING
THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE
PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND PROVISIONS HEREOF SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
3.5 The
parties agree to execute and deliver all such further documents, agreements and
instruments and take such other and further action as may be necessary or
appropriate to carry out the purposes and intent of this Agreement.
3.6 This
Agreement may be executed in one or more counterparts each of which shall be
deemed an original, but all of which shall together constitute one and the same
instrument.
3.7 In the
event that any one or more of the provisions contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected, it being
intended that all of the Offerors’ and the Purchaser’s rights and privileges
shall be enforceable to the fullest extent permitted by law.
Signatures
appear on the following page
A-4
IN
WITNESS WHEREOF, this Agreement is agreed to and accepted as of the day and year
first written above.
|
CREDIT
SUISSE FIRST BOSTON,
acting through its Cayman Islands branch, as Purchaser |
|||
|
By: |
|
||
|
Name: |
|||
|
Title: |
|||
|
By: |
|
||
|
Name: |
|||
|
Title: |
|||
|
CREDIT
SUISSE FIRST BOSTON LLC
(for
purposes of the rights and obligations in Sections
1.2, 1.3 and Article III only) |
|||
|
By: |
|
||
|
Name: |
|||
|
Title: |
|||
|
HERSHA
HOSPITALITY LIMITED PARTNERSHIP |
|||
|
By:
Hersha Hospitality Trust, its general partner |
|||
|
By: |
|
||
|
Name: |
|||
|
Title: |
|||
|
(for
purpose of the rights and obligations in Sections 1.2, 1.3 and Article III
only) |
|||
|
By: |
|
||
|
Name: |
|||
|
Title: |
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FORM OF
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP OPINION
Pursuant
to Section 3.2(a) of the Placement Agreement, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Wood LLP,
special counsel for the Placement Agent and Purchaser, shall deliver an opinion
to the effect that:
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(i) |
the
Company and each Significant Subsidiary is validly existing as a
corporation in good standing under the laws of the jurisdiction in which
it is chartered or organized; the Company has corporate power and
authority to (a) execute and deliver, and to perform its obligations
under, the Operative Documents to which it is a party and (b) issue and
perform its obligations under the Notes; |
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(ii) |
neither
the issue and sale of the Common Securities, the Preferred Securities or
the Junior Subordinated Notes, nor the purchase by the Trust of the Junior
Subordinated Notes, nor the execution and delivery of and compliance with
the Operative Documents by the Company or the Trust nor the consummation
of the transactions contemplated thereby will constitute a breach or
violation of the Trust Agreement or the charter or by-laws of the
Company; |
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(iii) |
the
Amended and Restated Trust Agreement has been duly authorized, executed
and delivered by the Company and duly executed and delivered by the
Administrative Trustees; |
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(iv) |
the
Indenture has been duly authorized, executed and delivered by the Company
and, assuming it has been duly authorized, executed and delivered by the
Indenture Trustee, constitutes a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights generally and to general principles of
equity; |
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(v) |
the
Junior Subordinated Notes have been duly authorized and executed by the
Company and delivered to the Indenture Trustee for authentication in
accordance with the Indenture and, when authenticated in accordance with
the provisions of the Indenture and delivered to the Trust against payment
therefor, will constitute legal, valid and binding obligations of the
Company entitled to the benefits of the Indenture and enforceable against
the Company in accordance with their terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors’ rights
generally and to general principles of equity;
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(vi) |
the
Trust is not, and, following the issuance of the Preferred Securities and
the consummation of the transactions contemplated by the Operative
Documents and the application of the proceeds therefrom, the Trust will
not be, an “investment company” or an entity “controlled” by an
“investment company,” in each case within the meaning of the Investment
Company Act; |
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(vii) |
assuming
(a) the accuracy of the representations and warranties, and compliance
with the agreements contained in the Placement Agreement and (b) that the
Preferred Securities are sold in a manner contemplated by, and in
accordance with the Placement Agreement, Subscription Agreement and the
Amended and Restated Trust Agreement, it is not necessary in connection
with the offer, sale and delivery of the Preferred Securities by the Trust
to the Purchaser, to register any of the Securities under the Securities
Act or to require qualification of the Indenture under the Trust Indenture
Act of 1939, as amended; |
B-1-1
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(viii) |
the
Placement Agreement and Subscription Agreement have been duly authorized,
executed and delivered by the Company; |
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(ix) |
the
Subscription Agreement has been duly executed and delivered by the
Administrative Trustees; and |
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(x) |
the
Indenture constitutes the legal, valid and binding obligation of
Wilmington Trust Company enforceable against Wilmington Trust Company in
accordance with its terms, subject to applicable bankruptcy, insolvency
and similar laws affecting creditors’ rights generally and to general
principles of equity. |
In
rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of New York, the Delaware General
Corporation Law and the federal laws of the United States; (B) as to
matters involving the application of laws of any jurisdiction other than the
State of New York and the Delaware General Corporation Law or the federal
laws of the United States, (i) rely, to the extent deemed proper and
specified in such opinion, upon the opinion of other counsel of good standing
believed to be reliable and who are satisfactory to the Purchaser or (ii) assume
such law is substantially similar to the law of the State of New York and, (C)
as to matters of fact, rely to the extent deemed proper, on certificates of
responsible officers of the Company and public officials.
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FORM OF
COMPANY COUNSEL OPINION
OR
OFFICERS’ CERTIFICATE
Pursuant
to Section 3.2(b) of the Placement Agreement, counsel for the Company shall
deliver an opinion, or the Company shall provide an Officers’ Certificate, to
the effect that:
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(i) |
all
of the issued and outstanding shares of capital stock of each Significant
Subsidiary are owned of record by the Company, and the issuance of the
Preferred Securities and the Common Securities is not subject to any
contractual preemptive rights known to such
officer; |
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(ii) |
no
consent, approval, authorization or order of any court or governmental
authority is required for the issue and sale of the Common Securities, the
Preferred Securities or the Junior Subordinated Notes, the purchase by the
Trust of the Junior Subordinated Notes, the execution and delivery of and
compliance with the Operative Documents by the Company or the Trust or the
consummation of the transactions contemplated in the Operative Documents,
except such approvals (specified in such certificate) as have been
obtained; |
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(iii) |
to
the knowledge of such officer, there is no action, suit or proceeding
before or by any government, governmental instrumentality, arbitrator or
court, domestic or foreign, now pending or threatened against or affecting
the Trust or the Company or any Significant Subsidiary that could
adversely affect the consummation of the transactions contemplated by the
Operative Documents or could have a Material Adverse
Effect; |
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(iv) |
the
Company is not and, immediately following consummation of the transactions
contemplated hereby and the application of the net proceeds therefrom, the
Company will not be, an “investment company” or an entity “controlled” by
an “investment company” by virtue of section [ ] of the Investment Company
Act; and the Trust is not, and immediately following the consummation of
the transactions contemplated hereby and the application of the net
proceeds therefrom, the Trust will not be, an “investment company” or an
entity “controlled” by an “investment company,” within the meaning of the
Investment Company Act; |
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(v) |
The
execution, delivery and performance of the Operative Documents, as
applicable, by the Company and the Trust and the consummation by the
Company and the Trust of the transactions contemplated by the Operative
Documents, as applicable, (a) will not result in any violation of the
charter or bylaws of the Company, the charter or bylaws of any Significant
Subsidiary, the Amended and Restated Trust Agreement or the Certificate of
Trust, and (b) will not conflict with, or result in a breach of any of the
terms or provisions of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or
result in the creation or imposition of any lien, charge and encumbrance
upon any assets or properties of the Company or any Significant Subsidiary
under, (A) any agreement, indenture, mortgage or instrument that the
Company or any Significant Subsidiary of the Company is a party to or by
which it may be bound or to which any of its assets or properties may be
subject, or (B) any existing applicable law, rule or administrative
regulation of any court or governmental agency or authority having
jurisdiction over the Company or any Significant Subsidiary of the Company
or any of their respective assets or properties, except in case of (b),
where any such violation, conflict, breach, default, lien, charge or
encumbrance, would not have a material adverse effect on the assets,
properties, business, results of operations or financial condition of the
Company and its subsidiaries, taken as
whole. |
B-2-1
All terms
used but not defined herein shall have the meanings assigned to them in the
Placement Agreement. A Subsequent Purchaser shall be entitled to rely on this
certificate.
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FORM OF
TAX COUNSEL OPINION
Pursuant
to Section 3.2(c) of the Placement Agreement, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
special tax counsel for the Placement Agent and Purchaser, shall deliver an
opinion to the effect that:
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(i) |
the
Trust will be classified for United States federal income tax purposes as
a grantor trust and not as an association or a publicly traded partnership
taxable as a corporation; and |
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(ii) |
for
United States federal income tax purposes, the Junior Subordinated Notes
will constitute indebtedness. |
In
rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of New York and the federal laws of the
United States and (B) rely as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of the Company and public
officials.
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FORM OF
DELAWARE COUNSEL TRUST OPINION
Pursuant
to Section 3.2(d) of the Placement Agreement, Morris,
James, Hitchens & ▇▇▇▇▇▇▇▇ LLP, special
Delaware counsel for the Trust, shall deliver an opinion to the effect
that:
| (i) |
The
Trust has been duly created and is validly existing in good standing as a
statutory trust under the Act, and all filings required under the laws of
the State of Delaware with respect to the creation and valid existence of
the Trust as a statutory trust have been
made. |
| (ii) |
Under
the Act and the Trust Agreement, the Trust has the trust power and
authority (i) to own property and conduct its business, all as described
in the Trust Agreement, (ii) to execute and deliver, and to perform its
obligations under, each of the Trust Documents, the Preferred Securities
and the Common Securities, and (iii) to purchase and hold the
Notes. |
| (iii) |
Under
the Act, the certificate attached to the Trust Agreement as Exhibit C is
an appropriate form of certificate to evidence ownership of the Preferred
Securities. The Preferred Securities have been duly authorized by the
Trust Agreement and, when issued in accordance with the Trust Agreement
and delivered against payment therefor in accordance with the Trust
Agreement and the Subscription Agreement, the Preferred Securities will be
validly issued and (subject to the qualifications set forth in this
paragraph) fully paid and nonassessable and will represent undivided
beneficial interests in the assets of the Trust, and the Preferred
Security Holders will be entitled to the benefits of the Trust Agreement.
The Preferred Security Holders as beneficial owners of the Trust, will be
entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware. The Preferred Security
Holders may be obligated to make payments or provide indemnity or security
as set forth in the Trust
Agreement. |
| (iv) |
The
Common Securities have been duly authorized by the Trust Agreement and,
when issued in accordance with the Trust Agreement and delivered against
payment therefor in accordance with the Trust Agreement and the Common
Securities Subscription Agreement, will be validly issued and will
represent undivided beneficial interests in the assets of the Trust, and
the Common Security Holder will be entitled to the benefits of the Trust
Agreement. |
| (v) |
Under
the Act and the Trust Agreement, the issuance of the Trust Securities is
not subject to preemptive or other similar
rights. |
| (vi) |
Under
the Act and the Trust Agreement, the execution and delivery by the Trust
of the Trust
Documents, and the performance by the Trust of its obligations thereunder,
have been duly authorized by all necessary trust action on the part of the
Trust. |
| (vii) |
The
Trust Agreement constitutes a legal, valid and binding obligation of the
Company and the Trustees, enforceable against the Company and the Trustees
in accordance with its terms. |
B-4-1
| (viii) |
The
issuance and sale by the Trust of the Trust Securities, the purchase by
the Trust of the Notes, the execution, delivery and performance by the
Trust of the Trust Documents, the consummation by the Trust of the
transactions contemplated by the Trust Documents, and compliance by the
Trust with its obligations thereunder are not prohibited by (i) the
Certificate of Trust or the Trust Agreement, or (ii) any law or regulation
of the State of Delaware applicable to the
Trust. |
| (ix) |
No
filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any Delaware court or Delaware
governmental authority or Delaware agency is required solely in connection
with the issuance and sale by the Trust of the Trust Securities, the
purchase by the Trust of the Notes, the execution, delivery and
performance by the Trust of the Trust Documents, the consummation by the
Trust of the transactions contemplated by the Trust Documents, and
compliance by the Trust with its obligations
thereunder. |
| (x) |
The
Preferred Security Holders (other than those Preferred Security Holders
who reside or are domiciled in the State of Delaware) will have no
liability for income taxes imposed by the State of Delaware solely as a
result of their participation in the Trust
and the Trust wi1l not be liable for any income tax imposed by the State
of Delaware. |
In
rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware and (B) rely as to matters of
fact, to the extent deemed proper, on certificates of responsible officers of
the Company and public officials.
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FORM OF
TRUSTEE COUNSEL OPINION
Pursuant
to Section 3.2(e) of the Placement Agreement, Morris,
James, Hitchens & ▇▇▇▇▇▇▇▇ LLP, special
counsel for the Property Trustee, the Delaware Trustee and the Indenture
Trustee, shall deliver an opinion to the effect that:
| (i) |
WTC
is duly incorporated and validly existing as a Delaware banking
corporation in good standing under the laws of the State of Delaware with
trust powers and its principal place of business in the State of
Delaware. |
| (ii) |
WTC
has requisite corporate power and authority to execute and deliver, and to
perform its obligations under, the Trustee
Documents. |
| (iii) |
The
execution, delivery, and performance by WTC of the Trustee Documents have
been duly authorized by all necessary corporate action on the part of WTC,
and the Trustee Documents have been duly executed and delivered by
WTC. |
| (iv) |
The
Trust Agreement is a legal, valid and binding obligation of WTC,
enforceable against WTC, in accordance with its terms.
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| (v) |
No
approval, authorization or other action by, or filing with, any
governmental authority or agency under any law or regulation of the State
of Delaware or the United States of America governing the trust powers of
WTC is required solely in connection with the execution, delivery and
performance by WTC of the Trustee Documents, except for the filing of the
Certificate of Trust with the Secretary of State, which Certificate of
Trust has been duly filed with the Secretary of State.
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| (vi) |
The
execution, delivery and performance of the Trustee Documents by WTC are
not prohibited by (i) the Charter or Bylaws of WTC, (ii) any law or
regulation of the State of Delaware or the United States of America
governing the trust powers of WTC, or (iii) to our knowledge (based and
relying solely on the Officer Certificates), any agreements or instruments
to which WTC is a party or by which WTC is bound or any judgment or order
applicable to WTC. |
| (vii) |
The
Notes delivered on the date hereof have been authenticated by due
execution thereof and delivered by WTC, as Note Trustee, in accordance
with the Company Order. The Preferred Securities delivered on the date
hereof have been authenticated by due execution thereof and delivered by
WTC, as Property Trustee, in accordance with the Trust
Order. |
In
rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware and the federal laws of the
United States governing the trust powers of WTC and (B) rely as to
matters of fact, to the extent deemed proper, on certificates of responsible
officers of WTC and public officials.
B-5-1
FORM OF
OFFICER’S FINANCIAL CERTIFICATE
The
undersigned, the [Chief Financial Officer/Treasurer/Assistant Treasurer/
Secretary/ Assistant Secretary, Chairman/ViceChairman/Chief Executive
Officer/President/Vice President] hereby certifies, pursuant to Section 6.9 of
the Placement Agreement, dated as of May 31, 2005, that, as of [date], HTT had
the following ratios and balances, on a consolidated basis:
As of
[Quarterly/Annual
Financial Date]
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Senior
secured indebtedness for borrowed money (“Debt”) |
$_____ |
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Senior
unsecured Debt |
$_____ |
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Subordinated
Debt |
$_____ |
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Total
Debt |
$_____ |
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Ratio
of (x) senior secured and unsecured Debt to (y) total Debt |
_____% |
[FOR
FISCAL YEAR END: Attached hereto are the audited consolidated financial
statements (including the balance sheet, income statement and statement of cash
flows, and notes thereto, together with the report of the independent
accountants thereon) of HHT and its consolidated subsidiaries for the three
years ended [date], 20__.]
[FOR
FISCAL QUARTER END: Attached hereto are the unaudited consolidated and
consolidating financial statements (including the balance sheet and income
statement) of HHT and its consolidated subsidiaries for the fiscal quarter ended
[date], 20__.]
The
financial statements fairly present in all material respects, in accordance with
U.S. generally accepted accounting principles (“GAAP”), the financial position
of HHT and its consolidated subsidiaries, and the results of operations and
changes in financial condition as of the date, and for the [quarter] [annual]
period ended [date], 20__, and such financial statements have been prepared in
accordance with GAAP consistently applied throughout the period involved (expect
as otherwise noted therein).
1
IN
WITNESS WHEREOF, the undersigned has executed this Officer’s Financial
Certificate as of this _____ day of _____________, 20__.
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By:
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Name: |
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