CONTRIBUTION AGREEMENT dated as of January 17, 2007 between Shree Associates, Kunj Associates, Devi Associates, Shanti III Associates, Trust FBO Jay H. Shah under The Hasu And Hersha Shah 2004 Trust dated August 18, 2004, Trust FBO Neil H. Shah under...
dated
as
of January 17, 2007
between
Shree
Associates, Kunj Associates, Devi Associates,
Shanti
III Associates, Trust FBO ▇▇▇ ▇. ▇▇▇▇ under The Hasu
And
▇▇▇▇▇▇ ▇▇▇▇ 2004 Trust dated August 18, 2004,
Trust
FBO
▇▇▇▇ ▇. ▇▇▇▇ under The Hasu and ▇▇▇▇▇▇ ▇▇▇▇
2004
Trust dated August 18, 2004, and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
as
Contributors,
and
HERSHA
HOSPITALITY LIMITED PARTNERSHIP
as
Acquiror
IN
CONNECTION WITH THE CONTRIBUTION AND ACQUISITION
OF
LLC
INTERESTS IN H. METRO DELAWARE, LLC
THIS
CONTRIBUTION AGREEMENT (the “Agreement”), dated this 17th day of January, 2007,
between [Shree Associates, Kunj Associates, Devi Associates, Shanti III
Associates, Trust FBO ▇▇▇ ▇. ▇▇▇▇ under The Hasu And ▇▇▇▇▇▇ ▇▇▇▇ 2004 Trust
dated August 18, 2004, Trust FBO ▇▇▇▇ ▇. ▇▇▇▇ under The Hasu and ▇▇▇▇▇▇ ▇▇▇▇
2004 Trust dated August 18, 2004, and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, (the “Contributors”), AND
HERSHA HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited partnership (the
“Acquiror” or “HHLP”) and provides:
ARTICLE
I
DEFINITIONS;
RULES OF CONSTRUCTION
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1.1
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Definitions.
The following terms shall have the indicated
meanings:
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"Act
of Bankruptcy"
shall
mean if a party hereto or any general partner thereof shall (a) apply for
or consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a substantial part
of
its property, (b) admit in writing its inability to pay its debts as they
become due, (c) make a general assignment for the benefit of its creditors,
(d) file a voluntary petition or commence a voluntary case or proceeding
under the Federal Bankruptcy Code (as now or hereafter in effect), (e) be
adjudicated a bankrupt or insolvent, (f) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts, (g) fail to controvert in
a timely and appropriate manner, or acquiesce in writing to, any petition
filed
against it in an involuntary case or proceeding under the Federal Bankruptcy
Code (as now or hereafter in effect), or (h) take any corporate or
partnership action for the purpose of effecting any of the foregoing; or
if a
proceeding or case shall be commenced, without the application or consent
of a
party hereto or any general partner thereof, in any court of competent
jurisdiction seeking (1) the liquidation, reorganization, dissolution or
winding-up, or the composition or readjustment of debts, of such party or
general partner, (2) the appointment of a receiver, custodian, trustee or
liquidator or such party or general partner or all or any substantial part
of
its assets, or (3) other similar relief under any law relating to
bankruptcy, insolvency, reorganization, winding-up or composition or adjustment
of debts, and such proceeding or case shall continue undismissed; or an order
(including an order for relief entered in an involuntary case under the Federal
Bankruptcy Code, as now or hereafter in effect) judgment or decree approving
or
ordering any of the foregoing shall be entered and continue unstayed and
in
effect, for a period of 60 consecutive days.
“Assignment
and Assumption Agreements”
shall
mean those certain assignment and assumption agreements whereby the Contributors
assign and HHLP assumes the Interests.
"Authorizations"
shall
mean all licenses, permits and approvals required by any governmental or
quasi-governmental agency, body or officer for the ownership, operation and
use
of the Property or any part thereof.
"Closing"
shall
mean the closing of the contribution and acquisition of the Interests pursuant
to this Agreement.
"Closing
Date"
shall
mean the date on which the Closing occurs.
“Consideration”
shall
mean Seven
Million Seven Hundred Fifty Thousand Dollars ($7,750,000.00)
payable
to the Contributors at Closing in the manner described in Article
II.
“Continuing
Liabilities”
shall
include liabilities arising under operating agreements, equipment leases,
loan
agreements, or proration credits at Closing, but shall exclude any liabilities
arising from any other arrangement, agreement or pending
litigation.
"FIRPTA
Certificates"
shall
mean the affidavit of each of the Contributors under Section 1445 of the
Internal Revenue Code certifying that such Contributor is not a foreign
corporation, foreign partnership, foreign trust, foreign estate or foreign
person (as those terms are defined in the Internal Revenue Code and the Income
Tax Regulations), in form and substance satisfactory to the
Acquiror.
"Governmental
Body"
means
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign.
"Hotel"
shall
mean the hotel and related amenities located on the Land.
“Interest”
shall
mean all right, title and interest of a Contributor in the LLC.
"Insurance
Policies"
shall
mean those certain policies of insurance described on Exhibit C
attached
hereto.
“Interests”
shall
mean all right, title and interest of all of the Contributors in the
LLC.
"Inventory"
shall
mean all "inventories of merchandise" and "inventories of supplies", as such
terms are defined in the Uniform System of Accounts for Hotels [9th
Revised
Edition] as published by the Hotel Association of New York City, Inc., as
revised, and similar consumable supplies.
"Land"
shall
mean that certain parcel of real estate lying and being at, more commonly
known
as the, as more particularly described on Exhibit A
attached
hereto.
"Lease"
shall
mean that certain lease of real property attached hereto as Exhibit
D.
"LLC"
shall
mean H. METRO DELAWARE, LLC, a Delaware limited liability company.
"Operating
Agreements"
shall
mean the management agreements, service contracts, supply contracts, leases
(other than the Leases) and other agreements, if any, in effect with respect
to
Furniture, Fixture, and Equipment existing at the Hotel. All of the Operating
Agreements in force and effect as of the date hereof are listed on Exhibit E
attached
hereto.
“Organizational
Documents”
shall
mean the current operating agreement and certificate of organization of the
LLC,
true and correct copies of which are attached hereto as Exhibit
F.
"Permitted
Title Exceptions"
shall
mean those exceptions to title to the Real Property that are satisfactory
to the
Acquiror.
"Property"
shall
mean collectively the Inventory, the Tangible Personal Property, and the
Intangible Personal Property.
"Tangible
Personal Property"
shall
mean the items of tangible personal Property consisting of all furniture,
fixtures and equipment situated on, attached to, or used in the operation
of the
Hotel, and all furniture, furnishings, equipment, machinery, and other personal
property of every kind located on or used in the operation of the Hotel and
owned by the LLC.
1.2 Rules
of Construction.
The
following rules shall apply to the construction and interpretation of this
Agreement:
(a) Singular
words shall connote the plural number as well as the singular and vice versa,
and the masculine shall include the feminine and the neuter.
(b) All
references herein to particular articles, sections, subsections, clauses
or
exhibits are references to articles, sections, subsections, clauses or exhibits
of this Agreement.
(c) The
headings
contained herein are solely for convenience of reference and shall not
constitute a part of this Agreement nor shall they affect its meaning,
construction or effect.
(d) Each
party hereto and its counsel have reviewed and revised (or requested revisions
of) this Agreement, and therefore any usual rules of construction requiring
that
ambiguities are to be resolved against a particular party shall not be
applicable in the construction and interpretation of this Agreement or any
exhibits hereto.
ARTICLE
II
CONTRIBUTION
OF INTERESTS IN EXCHANGE FOR PARTNERSHIP INTERESTS IN HHLP
2.1 Contribution.
Each of
the Contributors agrees to contribute, assign and transfer its respective
Interest to HHLP, and HHLP agrees to accept each Contributor’s Interest in
exchange for units of HHLP, all on the terms and conditions set forth
herein.
2.2 Value
of Interests.
The
total value of all Interests of the Contributors is Seven Million Seven Hundred
Fifty Thousand Dollars ($7,750,000.00). If consideration is paid in limited
partnership units, the price of the limited partnership units will be determined
by utilizing the five day volume weighted average closing price for Priority
Class A Common Stock of Hersha Hospitality Trust as of the Closing
Date.
2.3 Effect
of Contributions.
Upon
completion of the capital contributions contemplated by this
Agreement:
(a) The
Contributors will own units in HHLP with a total value of $7,750,000.00 in
the
percentages as set forth in detail in Exhibit “B” attached hereto and made a
part hereof by this reference.
(b) HHLP
shall
beneficially own the Interests, free and clear of any encumbrance, pledge
or any
other third party interests.
(c) HHLP
shall
have assumed and be responsible for the Continuing Liabilities.
The
parties agree that the transfer of the Interests to HHLP pursuant to this
Agreement shall be treated for federal income tax purposes as a contribution
of
such Interests solely in exchange for partnership interests in HHLP that
qualifies as a tax-free contribution under Section 721 of the Internal Revenue
Code of 1986, as amended.
ARTICLE
III
CONTRIBUTORS’
REPRESENTATIONS, WARRANTIES AND COVENANTS
To
induce
the Acquiror to enter into this Agreement and to acquire the Interests, the
Contributors hereby make the following representations, warranties and covenants
on a joint and several basis, upon each of which the Contributors acknowledge
and agree that the Acquiror is entitled to rely and has relied:
3.1 Organization
and Power.
The
Contributors are each individuals residing in the United States of America,
and
the Corporate Contributor is a corporation duly formed, validly existing
and in
good standing under the laws of the Commonwealth of Pennsylvania and have
all
requisite powers and all governmental licenses, authorizations, consents
and
approvals necessary to carry on its business as now conducted, to own, lease
and
operate its properties, to execute and deliver this Agreement and any document
or instrument required to be executed and delivered on behalf of the
Contributors hereunder, to perform their obligations under this Agreement
and
any such other documents or instruments and to consummate the transactions
contemplated hereby.
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3.2
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Authorization,
No Violations and Notices.
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(a) The
execution, delivery and performance of this Agreement by the Contributors,
and
the consummation of the transactions contemplated hereby have been duly
authorized, adopted and approved by the Contributors, and the shareholders
of
the Corporate Contributor, to the extent required by their organizational
documents and applicable law. No other proceedings are necessary to authorize
this Agreement and the transactions contemplated hereby. This Agreement has
been
duly executed by or on behalf of each Contributor and is a valid and binding
obligation enforceable against them in accordance with its terms.
(b) Neither
the
execution, delivery, or performance by the Contributors of this Agreement,
nor
the consummation of the transactions contemplated hereby, nor compliance
by the
Contributors with any of the provisions hereof, will:
(i) violate,
conflict with, result in a breach of any provision of, constitute a default
(or
an event that, which, with or lapse of time or both, would constitute a default)
under, result in the termination of, accelerate the performance required
by, or
result in a right of termination or acceleration, or the creation of any
lien,
security interest, charge, or encumbrance upon any of the properties or assets
of the LLC, under any of the terms, conditions, or provisions of, its Operating
Agreement, or any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement, or other instrument, or obligation to which the LLC is
a
party, or by which the LLC may be bound, or to which the LLC or its properties
or assets may be subject; or
(ii) violate
any
judgment, ruling, order, writ, injunction, decree, statute, rule, or regulation
applicable to the LLC or its property or assets that would not be violated
by
the execution, delivery or performance of this Agreement or the transactions
contemplated hereby by the Contributors or compliance by the Contributors
with
any of the provisions hereof.
3.3 Litigation
with respect to Contributors.
There is
no action, suit, claim or proceeding pending or, to the Contributors’ knowledge,
threatened against or affecting the Contributors or their assets in any court,
before any arbitrator or before or by any governmental body or other regulatory
authority (i) that would adversely affect the Interests, (ii) that seeks
restraint, prohibition, damages or other relief in connection with this
Agreement or the transactions contemplated hereby, or (iii) would delay the
consummation of any of the transactions contemplated hereby. The Contributors
are not subject to any judgment, decree, injunction, rule or order of any
court
relating to the Contributors’ participation in the transactions contemplated by
this Agreement.
3.4 Interests.
The
Interests will be free and clear of all liens and encumbrances on the Closing
Date and the Contributors have good, merchantable title thereto and the
right to
convey same in accordance with the terms of this Agreement. Upon delivery
of the
Assignment and Assumption Agreements to the Acquiror at Closing, good valid
and
merchantable title to the Interests, free and clear of all liens and
encumbrances, will pass to the Acquiror.
3.5 Bankruptcy
with Respect to Contributors.
No Act
of Bankruptcy has occurred with respect to the Contributors.
3.6 Brokerage
Commission.
The
Contributors have not engaged the services of, nor are they or will they
or
Acquiror become liable to, any real estate agent, broker, finder or any other
person or entity for any brokerage or finder’s fee, commission or other amount
with respect to the transactions described herein on account of any action
by
the Contributors.
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3.7
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The
LLC.
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(a) The
LLC is a
limited liability company duly formed, validly existing and in good standing
under the laws of the State of Delaware and has all requisite powers necessary
to carry on its business as now conducted, to own, lease and operate its
properties.
(b) Neither
the
execution, delivery, or performance by the Contributors of this Agreement,
nor
the consummation of the transactions contemplated hereby, nor compliance
by the
Contributors with any of the provisions hereof, will:
(i) violate,
conflict with, result in a breach of any provision of, constitute a default
(or
an event that, with notice or lapse of time or both, would constitute a default)
under, result in the termination of, accelerate the performance required
by, or
result in a right of termination or acceleration, or the creation of any
lien,
security interest, charge, or encumbrance upon any of the properties or assets
of the LLC, under any of the terms, conditions, or provisions of, its
certificate of organization, or any note, bond, mortgage, indenture, deed
of
trust, license, lease, agreement, or other instrument or obligation to which
the
LLC is a party, or by which the LLC may be bound, or to which the LLC or
its
properties or assets may be subject; or
(ii) violate
any
judgment, ruling, order, writ, injunction, decree, statute, rule, or regulation
applicable to the LLC or any of the LLC’s properties or assets.
(c) Except
for the Contributors, no party has any interest in the LLC or the right or
option to acquire any interest in the LLC or the property or any portion
thereof. The LLC has no subsidiaries and does not directly or indirectly
own any
securities of or interest in any other entity, including, without limitation,
any partnership or joint venture.
3.8 Liabilities,
Debts and Obligations.
Except
for the Continuing Liabilities, the LLC has no liability, debt or
obligation.
3.9 Tax
Matters with respect to LLC.
(a) The
LLC has
filed all income tax information returns on IRS Form 1065 (including K-1s
for
each partner) and applicable state and local income tax forms required to
be
filed with the United States Government and with all states and political
subdivisions thereof where any such returns are required to be filed and
where
the failure to file such return or report would subject the LLC or its members
to any material liability or penalty. All taxes (other than sale taxes, rental
taxes or the equivalent and real property taxes) imposed by the United States,
or by any foreign country, or by any state, municipality, subdivision, or
instrumentality of the United States or of any foreign country or by any
other
taxing authority, which are due and payable by the LLC have been paid in
full or
adequately provided for by reserves shown in their records and books of account
and in the LLC’s financial information. The LLC has not obtained or received any
extension of time (beyond the Closing Date) for the assessment of deficiencies
for any years or waived or extended the statute of limitations for the
determination or collection of any tax. To the Contributors’ knowledge no
unassessed tax deficiency is proposed or threatened against the
LLC.
(b) All
taxes,
rental taxes or the equivalent, and all interest and penalties due thereon,
required to be paid or collected by the LLC in connection with the operation
of
the Property as of the Closing Date will have been collected and/or paid
to the
appropriate governmental authorities, as required or such amounts shall be
pro-rated as of the Closing Date. The LLC shall file all necessary returns
and
petitions required to be filed through the Closing Date. The LLC shall prepare
and file all federal and state income tax returns for the tax period ending
on
the Closing Date, which shall reflect the termination for tax purposes of
the
LLC. If requested by the Acquiror, the Contributors shall cause the LLC to
make
an election under Section 754 of the Code for the period ending on the Closing
Date.
3.10 Contracts
and Agreements.
There is
no loan agreement, guarantee, note, bond, indenture and other debt instrument,
lease and other contract to which the LLC is a party or by which its assets
are
bound other than Permitted Title Encumbrances, the Leases, and the Operating
Agreements.
3.11 No
Special Taxes.
The
Contributors have no actual knowledge of, nor have they received any written
notice of, any special taxes or assessments relating to the LLC or Property
or
any part thereof or any planned public improvements that may result in a
special
tax or assessment against the Property.
3.12 Compliance
with Existing Laws.
The LLC
possesses all Authorizations, each of which is valid and in full force and
effect, and, to Contributors’ actual knowledge, no provision, condition or
limitation of any of the Authorizations has been breached or violated. The
LLC
has not misrepresented or failed to disclose any relevant fact in obtaining
all
Authorizations, and the Contributors have no actual knowledge of any change
in
the circumstances under which those Authorizations were obtained that result
in
their termination, suspension, modification or limitation. The Contributors
have
no actual knowledge, nor have they received written notice within the past
three
years, of any existing violation of any provision of any applicable building,
zoning, subdivision, environmental or other governmental ordinance, resolution,
statute, rule, order or regulation, including but not limited to those of
environmental agencies or insurance boards of underwriters, with respect
to the
ownership, operation, use, maintenance or condition of the Property or any
part
thereof, or requiring any repairs or alterations other than those that have
been
made prior to the date hereof.
3.13 Operating
Agreements.
The LLC
has performed all of its obligations under each of the Operating Agreements
and
no fact or circumstance has occurred which, by itself or with the passage
of
time or the giving of notice or both, would constitute a material default
under
any of the Operating Agreements. The LLC shall not enter into any new management
agreement, maintenance or repair contract, supply contract, lease in which
it is
lessee or other agreements with respect to the Property, nor shall the LLC
enter
into any agreements modifying the Operating Agreements, unless (a) any such
agreement or modification will not bind the Acquiror or the Property after
the
date of Closing or (b) the Contributors have obtained the Acquiror’s prior
written consent to such agreement or modification, which consent shall not
be
unreasonably withheld or delayed.
3.14 Warranties
and Guaranties.
The LLC
shall not before Closing, release or modify any warranties or guarantees,
if
any, of manufacturers, suppliers and installers relating to the Property
or any
part thereof, except with the prior written consent of the Acquiror, which
consent shall not be unreasonably withheld or delayed. A complete list of
all
such warranties and guaranties in effect as of this date is attached hereto
as
Exhibit G.
3.15 Insurance.
All of
the LLC’s Insurance Policies are valid and in full force and effect, all
premiums for such policies were paid when due and all future premiums for
such
policies (and any replacements thereof) shall be paid by the LLC on or before
the due date therefore. The LLC shall pay all premiums on, and shall not
cancel
or voluntarily allow to expire, any of the LLC’s Insurance Policies prior to the
Closing Date unless such policy is replaced, without any lapse of coverage,
by
another policy or policies providing coverage at least as extensive as the
policy or policies being replaced. The LLC shall name the Acquiror as an
additional insured on each of the LLC’s Insurance Policies.
3.16 Condemnation
Proceedings; Roadways.
The LLC
has received no written notice of any condemnation or eminent domain proceeding
pending or threatened against the Property or any part thereof.
3.17 Litigation
with respect to LLC.
Except
as set forth on Exhibit
H
there is
no action, suit or proceeding pending or known to be threatened against or
affecting the LLC or its property in any court, before any arbitrator or
before
or by any governmental agency which (a) in any manner raises any question
affecting the validity or enforceability of this Agreement or any other material
agreement or instrument to which the LLC is a party or by which it is bound
and
that is or is to be used in connection with, or is contemplated by, this
Agreement, (b) could materially and adversely affect the business, financial
position or results of operations of the LLC, (c) could materially and adversely
affect the ability of the LLC to perform its obligations hereunder, or under
any
document to be delivered pursuant hereto, (d) could create a lien on the
Property, any part thereof or any interest therein, or (e) could otherwise
materially adversely affect the Property, any part thereof or any interest
therein or the use, operation, condition or occupancy thereof.
3.18 Financial
Information.
To the
best of the Contributors’ knowledge except as otherwise disclosed in writing to
the Acquiror prior to the closing, for each of the LLC’s accounting years, when
a given year is taken as a whole, all of the LLC’s financial information
previously delivered or to be delivered to the Acquiror is and shall be correct
and complete in all material respects and presents accurately the results
of the
operations of the Property for the periods indicated, except such statements
do
not have footnotes or schedules that may otherwise be required by GAAP. If
requested by the Acquiror, Contributors will forward promptly all four-week
period ending financial information they receive from the LLC. Contributors’
financial information is prepared based on information provided by the LLC
based
on books and records maintained by the LLC in accordance with the LLC’s
accounting system. LLC financial information provided to the Acquiror has
been
provided to the Acquiror without any changes or alteration thereto. To the
best
of Contributors’ knowledge, since the date of the last financial statement
included in the LLC’s financial information, there has been no material adverse
change in the financial condition or in the operations of the
Property.
3.19 Organizational
Documents.
The
LLC’s Organizational Documents are in full force and effect and have not been
modified or supplemented, and no fact or circumstance has occurred that,
by
itself or with the giving of notice or the passage of time or both, would
constitute a default thereunder.
3.20 Bankruptcy
with respect to Partnership.
No Act
of Bankruptcy has occurred with respect to the LLC.
3.21 Bulk
Sale Compliance.
Contributors shall indemnify Acquiror against any claim, loss or liability
arising under the bulk sales law in connection with the transaction contemplated
herein.
3.22 Leases.
True,
complete copy of the Lease is attached as Exhibit D hereto. The Lease is,
and
will at Closing be, in full force and effect and LLC, is not in default and
will
make good faith efforts not to be in default with respect thereto (with or
without the giving of any notice and/or lapse of time).
3.23 Securities
Law Matters.
Contributors further represent and warrant that they have (i) received,
reviewed, been given the opportunity to ask questions of representatives
of the
Operating Partnership and the REIT regarding, and understands the Acquiror’s
Partnership Agreement, as amended, and each filing of the REIT under the
Securities Act, and (ii) Contributors are "accredited investors" as defined
under Regulation D promulgated under the Securities Act.
3.24 Tax
Matters with Respect to Contributors.
The
Contributors represent and warrant that they (and each of their partners)
have
obtained from their own counsel advice regarding the tax consequences of
(i) the
transfer of the Interests to the Acquiror and the receipt of the limited
partnership units of Hersha Hospitality Limited Partnership as consideration
therefore, (ii) the Contributors’ admission as partners of the Acquiror, and
(iii) any other transaction contemplated by this Agreement. The Contributors
further represent and warrant that they have not relied on the Acquiror or
the
Acquiror’s representatives or counsel for such advice.
3.25 Noncontravention.
The
execution and delivery of, and the performance by the Contributors of their
obligations under this Agreement do not and will not contravene, or constitute
a
default under, any provision of applicable law or regulation, or any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Contributors, or result in the creation of any lien or other encumbrance
on any
asset of the Contributors. There are no outstanding agreements (written or
oral)
pursuant to which the Contributors (or any predecessor to or representative
of
the Contributors) have agreed to contribute or have granted an option or
right
of first refusal to acquire the Property or any part thereof.
Each
of
the representations, warranties and covenants contained in this Article
III
and its
various subparagraphs are intended for the benefit of the Acquiror and may
be
waived in whole or in part, by the Acquiror, but only by an instrument in
writing signed by the Acquiror. Each of said representations, warranties
and
covenants shall survive the closing of the transaction contemplated hereby
for
twenty-four (24) months, and no investigation, audit, inspection, review
or the
like conducted by or on behalf of the Acquiror shall be deemed to terminate
the
effect of any such representations, warranties and covenants, it being
understood that the Acquiror has the right to rely thereon and that each
such
representation, warranty and covenant constitutes a material inducement to
the
Acquiror to execute this Agreement and to close the transaction contemplated
hereby and to issue the Units of HHLP to the Contributors. Acquiror acknowledges
and agrees that, except for the representations and warranties expressly
set
forth herein, Acquiror is acquiring the Interests "AS-IS, WHERE-IS" with
no
representations or warranties by or from Contributors or any of its affiliates,
express or implied, or any nature whatsoever.
ARTICLE
IV
ACQUIROR’S
REPRESENTATIONS, WARRANTIES AND COVENANTS
To
induce
the Contributors to enter into this Agreement and to transfer the Interests,
the
Acquiror hereby makes the following representations, warranties and covenants,
upon each of which the Acquiror acknowledges and agrees that the Contributors
are entitled to rely and have relied:
4.1 Organization
and Power.
The
Acquiror is a limited partnership duly organized, validly existing and in
good
standing under the laws of the Commonwealth of Virginia, and has all partnership
powers and all governmental licenses, authorizations, consents and approvals
to
carry on its businesses as now conducted and to enter into and perform its
obligations under this Agreement and any document or instrument required
to be
executed and delivered on behalf of the Acquiror hereunder.
4.2 Noncontravention.
The
execution and delivery of this Agreement and the performance by the Acquiror
of
its obligations hereunder do not and will not contravene, or constitute a
default under, any provisions of applicable law or regulation, the Acquiror’s
partnership agreements or any agreements, judgment, injunction, order, decree
or
other instrument binding upon the Acquiror or result in the creation of any
lien
or other encumbrance on any asset of the Acquiror.
4.3 Litigation.
There is
no action, suit or proceeding, pending or known to be threatened, against
or
affecting the Acquiror in any court or before any arbitrator or before any
Governmental Body which (a) in any manner raises any question affecting the
validity or enforceability of this Agreement or any other agreement or
instrument to which the Acquiror is a party or by which it is bound and that
is
to be used in connection with, or is contemplated by, this Agreement,
(b) could materially and adversely affect the business, financial position
or results of operations of the Acquiror, (c) could materially and
adversely affect the ability of the Acquiror to perform its obligations
hereunder, or under any document to be delivered pursuant hereto, (d) could
create a lien on the Units, any part thereof or any interest therein or
(e) could adversely affect the Units, any part thereof or any interest
therein or the use, operation, condition or occupancy thereof.
4.4 Bankruptcy.
No Act
of Bankruptcy has occurred with respect to the Acquiror.
4.5 No
Brokers.
The
Acquiror has not engaged the services of, nor is it or will it become liable
to,
any real estate agent, broker, finder or any other person or entity for any
brokerage or finder's fee, commission or other amount with respect to the
transaction described herein.
ARTICLE
V
CONDITIONS
AND ADDITIONAL COVENANTS
The
Acquiror’s obligations hereunder are subject to the satisfaction of the
following conditions precedent and the compliance by the Contributors with
the
following covenants:
5.1 Contributors’
Deliveries.
The
Contributors shall have delivered to the Escrow Agent or the Acquiror, as
the
case may be, on or before the date of Closing, all of the documents and other
information required of Contributors pursuant to Section 6.2.
5.2 Representations,
Warranties and Covenants; Obligations of Contributors;
Certificate.
All of
the Contributors’ representations and warranties made in this Agreement shall be
true and correct as of the date hereof and as of the date of Closing as if
then
made, there shall have occurred no material adverse change in the financial
condition of the LLC since the date hereof, the Contributors shall have
performed all of their material covenants and other obligations under this
Agreement and the Contributors shall have executed and delivered to the Acquiror
at Closing a certificate to the foregoing effect.
5.3 Condition
of Property.
The
Property and the Tangible Personal Property leased by the LLC shall be in
the
same condition at Closing as they are as of the date hereof, reasonable wear
and
tear accepted. Prior to Closing, the Contributors shall not have diminished
the
quality or quantity of maintenance and upkeep services heretofore provided
to
the Property and the Tangible Personal Property and the Contributors shall
not
have diminished the Inventory.
ARTICLE
VI
CLOSING
6.1 Closing.
Closing
shall be held at a location that is mutually acceptable to the parties, on
or
before March 31, 2007.
6.2 Contributors’
Deliveries.
At
Closing, the Contributors shall deliver to Acquiror all of the following
instruments, each of which shall have been duly executed and, where applicable,
acknowledged on behalf of the Contributors and shall be dated as of the date
of
Closing:
(a) The
certificate required by Section 5.2.
(b) The
Assignment and Assumption Agreements.
(c) Such
agreements, affidavits or other documents as may be required by the Title
Company to issue the Owner's Title Policy with affirmative coverage over
mechanics' and materialmen's liens.
(d) True,
correct
and complete copies of all warranties, if any, of manufacturers, suppliers
and
installers possessed by the Contributors and relating to the Property, or
any
part thereof.
(e) Certified
copies of the LLC’s Organizational Documents.
(f) Appropriate
resolutions of the partners of the Partnership Contributors, together with
all
other necessary approvals and consents of the Contributors, authorizing
(A) the execution on behalf of the Contributors of this Agreement and the
documents to be executed and delivered by the Contributors prior to, at or
otherwise in connection with Closing, and (B) the performance by the
Contributors of their obligations hereunder and under such
documents.
(g) Such
proof as
the Acquiror may reasonably require with respect to Contributors’ compliance
with the bulk sales laws or similar statutes.
(h) A
written
instrument executed by the Contributors, conveying and transferring to the
Acquiror all of the Contributors’ right, title and interest in any telephone
numbers and facsimile numbers relating to the Property, and, if the Contributors
maintains a post office box, conveying to the Acquiror all of its interest
in
and to such post office box and the number associated therewith, so as to
assure
a continuity in operation and communication.
(i) All
books,
records, operating reports, appraisal reports, files and other materials
in the
Contributors’ possession or control which are necessary in the Acquiror’s
discretion to maintain continuity of operation of the Property.
(j) An
assignment
of all warranties and guarantees from all contractors and subcontractors,
manufacturers, and suppliers in effect with respect to the
Improvements.
(k) Such
agreements, affidavits or other documents as may be required
(l) Any
other
document or instrument reasonably requested by the Acquiror or required
hereby.
6.3 Acquiror’s
Deliveries.
At
Closing, HHLP shall issue or deliver to the Contributors the
following:
(a) The
Units of
HHLP described in ARTICLE II.
(b) The
Assignment and Assumption Agreements.
(c) Any
other
document or instrument reasonably requested by the Contributors or required
hereby.
6.4 Closing
Costs.
The
Acquiror shall pay all legal fees and expenses. All filing fees for the
recording or other similar taxes due with respect to the transfer of title
and
all charges for title insurance premiums shall be paid by the Acquiror. The
Contributors shall pay reasonable fees for the preparation of the documents
to
be delivered by the Contributors hereunder. Acquiror shall pay for the releases
of any deeds of trust, mortgages and other financing encumbering the Property
and for any costs associated with any corrective instruments. The Acquiror
shall
pay all other costs, including all franchise license transfer fees, in carrying
out the transactions contemplated hereunder.
ARTICLE
VII
LIABILITY
OF ACQUIROR; INDEMNIFICATION BY CONTRIBUTORS;
TERMINATION
RIGHTS
7.1 Liability
of Acquiror.
Except
for any obligation expressly assumed or agreed to be assumed by the Acquiror
hereunder and in the Assignment and Assumption Agreement, the Acquiror does
not
assume any obligation of the Contributors or any liability for claims arising
out of any occurrence prior to Closing.
7.2 Indemnification
by Contributors.
The
Contributors hereby indemnify and hold the Acquiror harmless from and against
any and all claims, costs, penalties, damages, losses, liabilities and expenses
(including reasonable attorneys' fees), subject to Section
8.11
that may
at any time be incurred by the Acquiror, whether before or after Closing,
as a
result of any breach by the Contributors of any of their representations,
warranties, covenants or obligations set forth herein or in any other document
delivered by the Contributors pursuant hereto.
7.3 Termination
by Acquiror.
If any
condition set forth herein cannot or will not be satisfied prior to Closing,
or
upon the occurrence of any other event that would entitle the Acquiror to
terminate this Agreement and its obligations hereunder, and the Contributors
fail to cure any such matter within ten business days after notice thereof
from
the Acquiror, the Acquiror, at its option and as its sole remedy, shall elect
either (a) to terminate this Agreement and all other rights and obligations
of the Contributors and the Acquiror hereunder shall terminate immediately,
or
(b) to waive its right to terminate and, instead, to proceed to Closing.
7.4 Termination
by Contributors.
If,
prior to Closing, the Acquiror defaults in performing any of its obligations
under this Agreement (including its obligation to acquire the Interests),
and
the Acquiror fails to cure any such default within ten business days after
notice thereof from the Contributors, then the Contributors’ sole remedy for
such default shall be to terminate this Agreement.
ARTICLE
VIII
MISCELLANEOUS
PROVISIONS
8.1 Completeness;
Modification.
This
Agreement constitutes the entire agreement between the parties hereto with
respect to the transactions contemplated hereby and supersedes all prior
discussions, understandings, agreements and negotiations between the parties
hereto. This Agreement may be modified only by a written instrument duly
executed by the parties hereto.
8.2 Assignments.
The
Acquiror may assign its rights hereunder to any affiliate of Acquiror without
the consent of the Contributors. No such assignment shall relieve the Acquiror
of any of its obligations and liabilities hereunder.
8.3 Successors
and Assigns.
The
benefits and burdens of this Agreement shall inure to the benefit of and
bind
the Acquiror and the Contributors and their respective party
hereto.
8.4 Days.
If any
action is required to be performed, or if any notice, consent or other
communication is given, on a day that is a Saturday or Sunday or a legal
holiday
in the jurisdiction in which the action is required to be performed or in
which
is located the intended recipient of such notice, consent or other
communication, such performance shall be deemed to be required, and such
notice,
consent or other communication shall be deemed to be given, on the first
business day following such Saturday, Sunday or legal holiday. Unless otherwise
specified herein, all references herein to a "day" or "days" shall refer
to
calendar days and not business days.
8.5 Governing
Law.
This
Agreement and all documents referred to herein shall be governed by and
construed and interpreted in accordance with the laws of the Commonwealth
of
Pennsylvania.
8.6 Counterparts.
To
facilitate execution, this Agreement may be executed in as many counterparts
as
may be required. It shall not be necessary that the signature on behalf of
both
parties hereto appear on each counterpart hereof. All counterparts hereof
shall
collectively constitute a single agreement.
8.7 Severability.
If any
term, covenant or condition of this Agreement, or the application thereof
to any
person or circumstance, shall to any extent be invalid or unenforceable,
the
remainder of this Agreement, or the application of such term, covenant or
condition to other persons or circumstances, shall not be affected thereby,
and
each term, covenant or condition of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
8.8 Costs.
Regardless of whether Closing occurs hereunder, and except as otherwise
expressly provided herein, each party hereto shall be responsible for its
own
costs in connection with this Agreement and the transactions contemplated
hereby, including without limitation fees of attorneys, engineers and
accountants.
8.9 Notices.
All
notices, requests, demands and other communications hereunder shall be in
writing and shall be delivered by hand, transmitted by facsimile transmission,
sent prepaid by Federal Express (or a comparable overnight delivery service)
or
sent by the United States mail, certified, postage prepaid, return receipt
requested, at the addresses and with such copies as designated below. Any
notice, request, demand or other communication delivered or sent in the manner
aforesaid shall be deemed given or made (as the case may be) when actually
delivered to the intended recipient.
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If
to the Contributors:
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Phone:
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Fax:
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With
a copy to:
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Phone:
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Fax:
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If
to the Acquiror:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||
| ▇▇▇▇▇▇ Hospitality Limited Partnership | |||
| ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | |||
| Phone: (▇▇▇) ▇▇▇-▇▇▇▇ | |||
| Fax: (▇▇▇) ▇▇▇-▇▇▇▇ | |||
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With
a copy to:
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire | ||
| ▇▇▇▇▇▇, Wolfson, Sheffey, ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ LLP | |||
| ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ | |||
| ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | |||
| Phone: (▇▇▇) ▇▇▇-▇▇▇▇ | |||
| Fax: (▇▇▇) ▇▇▇-▇▇▇▇ | |||
Or
to
such other address as the intended recipient may have specified in a notice
to
the other party. Any party hereto may change its address or designate different
or other persons or entities to receive copies by notifying the other party
and
the Escrow Agent in a manner described in this Section.
8.10 Incorporation
by Reference.
All of
the exhibits attached hereto are by this reference incorporated herein and
made
a part hereof.
8.12 Further
Assurances.
The
Contributors and the Acquiror each covenant and agree to sign, execute and
deliver, or cause to be signed, executed and delivered, and to do or make,
or
cause to be done or made, upon the written request of the other party, any
and
all agreements, instruments, papers, deeds, acts or things, supplemental,
confirmatory or otherwise, as may be reasonably required by either party
hereto
for the purpose of or in connection with consummating the transactions described
herein.
8.13 No
Partnership.
This
Agreement does not and shall not be construed to create a partnership, joint
venture or any other relationship between the parties hereto except the
relationship of Contributors and Acquiror specifically established
hereby.
8.14 Time
of Essence.
Time is
of the essence with respect to every provision hereof.
8.15 Confidentiality.
Except
as hereinafter provided, from and after the execution of this Agreement,
the
Acquiror and the Contributors
shall keep the terms, conditions and provisions of this Agreement confidential
and neither shall make any public announcements hereof unless the other first
approves of same in writing, nor shall either disclose the terms, conditions
and
provisions hereof, except to persons who "need to know", such as their
respective attorneys, accountants, engineers, surveyors, financiers and bankers.
Notwithstanding the foregoing, it is acknowledged that the Acquiror has elected
to be a real estate investment trust ("REIT") and that the REIT has sold
shares
and may seek to sell additional shares to the general public and that in
connection therewith, the Acquiror will have the absolute and unbridled right
to
market such securities and prepare and file all necessary or reasonably required
registration statements, disclosure statements, and other papers, documents
and
instruments necessary or reasonably required in the Acquiror’s judgment and that
of its attorneys and underwriters with respect to the REIT's shares with
the
U.S. Securities and Exchange Commission and/or similar state authorities
and to
cause same to become effective and to disclose therein and thus to its
underwriters, to the U.S. Securities and Exchange Commission and/or to similar
state authorities and to the public all of the terms, conditions and provisions
of this Agreement.
[SIGNATURE
PAGE TO FOLLOW.]
IN
WITNESS WHEREOF, the Contributors and the Acquiror have caused this Agreement
to
be executed in their names by their respective duly-authorized
representatives.
CONTRIBUTORS:
| Shree Associates | ||
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By
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▇. ▇▇▇▇
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| Kunj Associates | ||
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By
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▇▇▇▇▇
▇. ▇▇▇▇▇
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| Devi Associates | ||
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By
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▇▇▇▇▇▇
▇▇▇▇▇
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| Shanti III Associates | ||
| By |
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▇.▇.
▇▇▇▇▇
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| Trust FBO ▇▇▇ ▇. ▇▇▇▇ under The Hasu And ▇▇▇▇▇▇ ▇▇▇▇ 2004 Trust dated August 18, 2004 | ||
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By
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▇▇▇
▇. ▇▇▇▇
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| By | ||
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▇▇▇▇▇
▇▇▇▇▇
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| Trust FBO ▇▇▇▇ ▇. ▇▇▇▇ under The Hasu and ▇▇▇▇▇▇ ▇▇▇▇ 2004 Trust Dated August 18, 2004 | ||
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By
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▇▇▇▇
▇. ▇▇▇▇
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By
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▇. ▇▇▇▇▇▇
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ACQUIROR:
| HERSHA HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited partnership | |||||
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By:
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HERSHA
HOSPITALITY TRUST, a Maryland business trust, its sole general
partner
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By:
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Name:
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Title:
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