CONTRIBUTION AGREEMENT dated as of July 1, 2007 by and among HERSHA NORWICH ASSOCIATES, LLC, KIRIT PATEL, ASHWIN SHAH and K&D INVESTMENT ASSOCIATES, L.L.C. as Contributors, and HERSHA HOSPITALITY LIMITED PARTNERSHIP and as Acquirers, IN CONNECTION...
dated
as
of July 1, 2007
by
and
among
HERSHA
NORWICH ASSOCIATES, LLC,
XXXXX
XXXXX,
XXXXXX
XXXX and
K&D
INVESTMENT ASSOCIATES, L.L.C.
as
Contributors,
and
HERSHA
HOSPITALITY LIMITED PARTNERSHIP and
44
NORWICH MANAGER, LLC
as
Acquirers,
IN
CONNECTION WITH THE PURCHASE AND SALE OF
MEMBERSHIP
INTERESTS IN 44 HERSHA NORWICH ASSOCIATES, LLC, OWNER OF HOLIDAY INN NORWICH,
LOCATED AT
00
XXXXX
XXXXXXXXX, XXXXXXX, XX
THIS
CONTRIBUTION AGREEMENT, dated as of July 1, 2007 (the “Agreement”), by Hersha
Norwich Associates, LLC, a Delaware limited liability company (the “Hersha
Contributor”), Xxxxx Xxxxx, an individual (the “Xxxxx Contributor”), Xxxxxx
Xxxx, an individual (the “Shah Contributor”), K&D Investment Associates,
L.L.C., a Michigan limited liability company (the “K&D Contributor”,
collectively, the “Contributors”), 44 Hersha Norwich Associates, LLC, a
Connecticut limited liability company (the “LLC”), 44 Norwich Manager, LLC, a
Delaware limited liability company (the “Manager Acquirer”) and Hersha
Hospitality Limited Partnership, a Virginia limited partnership (the
“Partnership Acquirer”, collectively, the “Acquirers”), provides:
ARTICLE
I
DEFINITIONS;
RULES OF CONSTRUCTION
1.1 Definitions. The
following terms shall have the indicated meanings:
“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 limited liability company 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.
“Apportionment
Date” shall mean the day immediately preceding the Closing
Date.
“Articles
of Organization” shall mean the Articles of Organization of the LLC filed
with the Secretary of State of the State of Connecticut, a true and correct
copy
of which is attached hereto as Exhibit F.
“Assignment
and Assumption Agreement” shall mean that certain Assignment and Assumption
Agreement with respect to the Interests (defined herein below), dated as of
the
Closing Date, by and between Contributors and
Acquirers.
“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 the value of Sixteen Million Eighty Thousand Dollars ($16,080,000.00)
less the principal amount of the first Existing Mortgage outstanding on the
Closing Date, payable in limited partnership units of Partnership Acquirer
payable to the Contributors at Closing in the manner described in Section
2.3 and the assumption or modification by Partnership Acquirer of the
existing loans from New Alliance Bank, a Connecticut banking corporation,
successor by merger to Westbank, a Massachusetts banking corporation to the
LLC,
dated July 28, 2005 and amended September 26, 2006, in the total original
principal amount of Eight Million Four Hundred Twenty-Three Thousand Dollars
($8,423,000.00).
“Continuing
Liabilities” shall include liabilities arising under Operating Agreements,
Leases, equipment leases, loan agreements, or proration credits at Closing,
but
shall exclude any liabilities arising from any other arrangement, agreement
or
pending litigation.
“Deposit”
shall have the meaning set forth in Section 2.3.
“Employment
Agreements” shall mean any and all employment agreements, written or oral,
between the Contributors or its managing agent and the persons employed with
respect to the Property. A schedule indicating all pertinent
information with respect to each Employment Agreement in effect as of the date
hereof, name of employee, social security number, wage or salary, accrued
vacation benefits, other fringe benefits, etc., is attached hereto as
Exhibit B.
“Escrow
Agent” shall mean __________.
“Existing
Mortgage” shall mean the existing loans from New Alliance Bank, a
Connecticut banking corporation, successor by merger to Westbank, a
Massachusetts banking corporation to the LLC, dated July 28, 2005 and amended
September 26, 2006, in the total original principal amount of Eight Million
Four
Hundred Twenty-Three Thousand Dollars ($8,423,000.00).
“FIRPTA
Certificate” shall mean the affidavit of the Contributors under Section 1445
of the Internal Revenue Code certifying that such Contributors are not a foreign
corporation, foreign partnership, foreign limited liability company, 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 Acquirer.
“Governmental
Body” means any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign.
“Hersha”
shall mean Hersha Hospitality Trust, a Maryland business trust.
“Hotel”
shall mean the hotel and related amenities located on the Land.
“Improvements”
shall mean the Hotel and all other buildings, improvements, fixtures and other
items of real estate located on the Land.
“Insurance
Policies” shall mean those certain policies of insurance described on
Exhibit C attached hereto.
“Intangible
Personal Property” shall mean all intangible personal property owned or
possessed by the Contributors or the LLC and used in connection with the
ownership, operation, leasing, occupancy or maintenance of the Property,
including, without limitation, the right to use the trade name “Holiday Inn
Norwich” and all variations thereof, the Authorizations, escrow accounts,
insurance policies, general intangibles, business records, plans and
specifications, surveys and title insurance policies pertaining to the real
property and the personal property, all licenses, permits and approvals with
respect to the construction, ownership, operation, leasing, occupancy or
maintenance of the Property, any unpaid award for taking by condemnation or
any
damage to the Land by reason of a change of grade or location of or access
to
any street or highway, and the share of the Tray Ledger as hereinafter defined,
excluding (a) any of the aforesaid rights the Acquirer elects not to
acquire, (b) the Contributor’s cash on hand, in bank accounts and invested
with financial institutions and (c) accounts receivable except for the above
described share of the Tray Ledger.
“Hersha
Interests” shall mean all right, title and interest of Hersha Contributor in
the LLC, consisting of a 50% membership interest in the LLC.
“Xxxxx
Interests” shall mean all right, title and interest of Xxxxx Contributor in
the LLC, consisting of a 20% membership interest in the LLC.
“Shah
Interests” shall mean all right, title and interest of Shah Contributor in
the LLC, consisting of a 15% membership interest in the LLC.
“K&D
Interests” shall mean all right, title and interest of K&D Contributor
in the LLC, consisting of a 15% membership interest in the LLC.
“Interests”
shall mean the Hersha Interests, the Xxxxx Interests, the Shah Interests
and
the
K&D Interests.
“Inventory”
shall mean all inventory located at the Hotel, including without limitation,
all
mattresses, pillows, bed linens, towels, paper goods, soaps, cleaning supplies
and other such supplies.
“Joinder”
shall have the meaning set forth in Section 2.3(c).
"Knowledge"
shall mean the actual knowledge of the Contributors that they would have had
after making reasonable investigation.
“LP
Units” shall mean the value of _________ limited partnership units of
Partnership Acquirer.
“Land”
shall mean that certain parcel of real estate lying and being in the Town of
Norwich, County of New London and State of Connecticut at 00 Xxxxx Xxxxxxxxx,
Xxxxxxx, Xxxxxxxxxxx, as more particularly described on Exhibit A
attached hereto, together with all easements, rights, privileges, remainders,
reversions and appurtenances thereunto belonging or in any way appertaining,
and
all of the estate, right, title, interest, claim or demand whatsoever of the
Contributor therein, in the streets and ways adjacent thereto and in the beds
thereof, either at law or in equity, in possession or expectancy, now or
hereafter acquired.
“Leases”
shall mean those leases of real property listed on Exhibit D attached
hereto.
“LLC”
shall mean 44 Hersha Norwich Associates, LLC, a Connecticut limited liability
company that owns, as its only assets, the fee interest in the Land, and the
Hotel and Improvements located on the Land.
“LLC
Operating Agreement” shall mean the current operating agreement of the LLC,
a true and correct copy of which is attached hereto as
Exhibit G.
“Manager”
shall mean Hersha Hospitality Management, LP, a Pennsylvania limited
partnership.
“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 the construction, ownership, operation, occupancy or
maintenance of the Property. All of the Operating Agreements in force
and effect as of the date hereof are listed on Exhibit E attached
hereto.
“Owner's
Title Policy” shall mean an owner's policy of title insurance issued to the
Acquirers by the Title Company, dated as of the Closing Date, pursuant to which
the Title Company insures the Acquirers’ ownership of title to the fee interest
in the Real Property (including the marketability thereof) subject only to
Permitted Title Exceptions. The Owner's Title
Policy shall insure the Acquirers in the amount of the Consideration and shall
be acceptable in form and substance to the Acquirers. The description
of the Land in the Owner's Title Policy shall be by courses and distances and
shall be identical to the description shown on a survey provided by the
Contributors to the Acquirers.
“Permitted
Title Exceptions” shall mean those exceptions to title to the Real Property
that are satisfactory to the Acquirers as determined pursuant to
Section 2.2.
“Property”
shall mean collectively the Land, Improvements, the Inventory, the Reservation
System, the Tangible Personal Property and the Intangible Personal
Property.
“Real
Property” shall mean the Land and the Improvements.
“Reservation
System” shall mean the Contributors’ Reservation Terminal and Reservation
System equipment and software, if any.
“Securities
Act” shall mean the Securities Act of 1933, as amended.
“Study
Period” shall mean the period commencing as of the date hereof, and
continuing through the time of Closing.
“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 Contributors or the LLC.
“Title
Commitment” shall mean the commitment by the Title Company to issue the
Owner's Title Policy.
“Title
Company” shall mean _________.
“Tray
Ledger” shall mean the final night's room revenue (revenue from rooms
occupied as of 11:59:59 p.m. on the Apportionment Date, inclusive of food,
beverage, telephone and similar charges), net of any sales taxes, room taxes
or
other taxes thereon.
“Utilities”
shall mean public sanitary and storm sewers, natural gas, telephone, public
water facilities, electrical facilities and all other utility facilities and
services necessary for the operation and occupancy of the Property as a
hotel.
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) 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
AND ACQUISITION; STUDY PERIOD;
PAYMENT
OF CONSIDERATION
2.1 Contribution
and Acquisition. The Contributors agree to contribute, assign and
transfer their Interests to the Acquirers and the Acquirers agree to accept
the
Interests in exchange for the Consideration and in accordance with the other
terms and conditions set forth herein.
2.2 Study
Period. (a) The Acquirers shall have the right, until
the end of the Study Period, to enter upon the Real Property and to perform,
at
the Acquirers’ expense, such economic, surveying, engineering, environmental,
topographic and marketing tests, studies and investigations as the Acquirers
may
deem appropriate. If such tests, studies and investigations warrant,
in the Acquirers’ sole, absolute and unreviewable discretion, the purchase of
the Interests for the purposes contemplated by the Acquirers, then the Acquirers
may elect to proceed to Closing and shall so notify the Contributors prior
to
the expiration of the Study Period. If for any reason the Acquirers
do not so notify the Contributors of their determination to proceed to Closing
prior to the expiration of the Study Period, or if the Acquirers notify the
Contributors, in writing, prior to the expiration of the Study Period that
it
has determined not to proceed to Closing, this Agreement automatically shall
terminate, and the Acquirers shall be released from any further liability or
obligation under this Agreement.
(b) During
the Study Period, the Contributors shall make available to the Acquirers, its
agents, auditors, engineers, attorneys and other designees, for inspection
copies of all existing architectural and engineering studies, surveys, title
insurance policies, zoning and site plan materials, correspondence,
environmental audits and other related materials or information if any, relating
to the Property which are in, or come into, the Contributors’ possession or
control.
(c) The
Acquirers hereby indemnify and defend the Contributors against any loss, damage
or claim arising from entry upon the Real Property by the Acquirers or any
agents, contractors
or employees of the Acquirers. The Acquirers, at its own expense,
shall restore any damage to the Real Property caused by any of the tests or
studies made by the Acquirers.
2.3 Payment
of the Consideration. The Consideration shall be paid to the Contributors in
the following manner:
(a) Partnership
Acquirer has made a deposit to Contributors in the sum of Two Million Dollars
($2,000,000.00) (the “Deposit”) as a refundable deposit, paid directly to the
Contributors. The Deposit shall be refunded to Partnership Acquirer should
the
Acquirers terminate the Agreement. Contributors agree to pay interest to
Partnership Acquirer on the Deposit at a rate of Ten Percent (10%) per annum
from date of receipt of the Deposit until date of closing or termination of
the
Agreement and return of the Deposit to the Partnership Acquirer. Should closing
occur, Contributors shall refund Deposit to Partnership Acquirer and Partnership
Acquirer shall pay to Contributor the LP Units, the price of such LP Units
to be
determined on the date of closing calculated as the Purchase Price less the
principal amount of the Existing Mortgage outstanding on the Closing Date,
divided by the average volume-weighted closing price of Hersha Hospitality
Trust
common shares over a twenty (20) trading day period that ends at the conclusion
of the previous trading day.
(b) At
Closing, the lender shall give consent to such contribution and within a
reasonable period of time, lender shall cause modification or assumption of
the
Existing Mortgage,
as appropriate. Any adjustments and prorations to be made pursuant to the terms
of this Agreement shall be paid by wire transfer of immediately available funds
to an account specified by the party due to receive same.
(c) Notwithstanding
the foregoing, no LP Units shall be issued by the Partnership Acquirer, and
following such issuance no LP Units shall be transferred by the Contributors
to,
any person or entity that is not an accredited investor within the meaning
of
Regulation D promulgated by the United States Securities and Exchange Commission
(“SEC”) under the Securities Act of 1933, as amended (the “Securities
Act”), and to the extent any such non-accredited person or entity is
entitled to receive any portion of the Consideration, such portion shall be
paid
in cash rather than LP Units and the number of LP Units issuable in payment
of
the Consideration shall be reduced accordingly. The Contributors agree to take
such actions as Partnership Acquirer may reasonably request in order to assure
that the issuance of any LP Units pursuant to this Agreement complies with
the
requirements of the Securities Act and Regulation D promulgated thereunder.
Except as otherwise expressly set forth in this Agreement, the Contributors
acknowledge and agree that once the Closing occurs, the Contributors shall
no
longer hold any right, title or interest in the Property (except through its
ownership of Partnership Acquirer). Contributors hereby direct Acquirers to
pay,
issue and distribute (as applicable) the Consideration on the Closing Date
to
the Contributors in such amounts set forth in this
Agreement. The Contributors that acquire LP Units
acknowledge that any certificates evidencing the LP Units will bear appropriate
legends indicating (i) that the LP Units have not been registered under the
Securities Act, and (ii) that Partnership Acquirer’s Limited Partnership
Agreement (the “Acquirer’s Limited Partnership Agreement”) restricts the
transfer of the LP Units. The Contributors shall upon receipt of the LP Units
at
Closing become a limited partner of Acquirer by executing the form of joinder
(the “Joinder”) to the Partnership Acquirer’s Limited Partnership
Agreement attached hereto as Exhibit J and deliver the executed Joinder
at closing pursuant to the terms of Section 6.2 hereof;
provided, however, that if any Contributor is presently a
limited partner of the Partnership Acquirer, such Contributor shall not be
required to execute and deliver the Joinder. By executing and
delivering the Joinder in accordance with the terms hereof, each Contributor
acknowledges that it will be bound by the terms and provisions of the Acquirer’s
Limited Partnership Agreement.
ARTICLE
III
CONTRIBUTOR’S
REPRESENTATIONS, WARRANTIES AND COVENANTS
To
induce
the Acquirers to enter into this Agreement and to purchase the Property,
Contributors hereby make the following representations, warranties and
covenants, upon each of which Contributors acknowledge and agree that the
Acquirers are entitled to rely and has relied:
3.1 Identity
and Power.
(a) The
Hersha Contributor is a Delaware limited liability company and has 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 Hersha
Contributor hereunder, to perform its obligations under this Agreement and
any
such other documents or instruments and to consummate the transactions
contemplated hereby.
(b) The
Xxxxx Contributor is an individual and has all requisite powers and all
governmental licenses, authorizations, consents and approvals necessary to
carry
on his 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 Xxxxx Contributor hereunder, to perform
his obligations under this Agreement and any such other documents or instruments
and to consummate the transactions contemplated hereby.
(c) The
Shah Contributor is an individual and has all requisite powers and all
governmental licenses, authorizations, consents and approvals necessary to
carry
on his 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 Shah Contributor hereunder, to perform
his obligations under this Agreement and any such other documents or instruments
and to consummate the transactions contemplated hereby.
(d) The
K&D Contributor is a Michigan limited liability company and has 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 K&D
Contributor hereunder, to perform its obligations under this Agreement and
any
such other documents or instruments and to consummate the transactions
contemplated hereby.
3.2 Authorization,
No Violations and Notices.
(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. No other
proceedings are necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed by the
Contributors 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
Property or assets of the LLC, under any of the terms, conditions, or
provisions of, the Articles of Organization, the LLC Operating Agreement, or
any
note, bond, mortgage, indenture, deed of trust, license (including without
limitation, the 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 the Property 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 materially adversely affect the Contributors or 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.
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3.4
|
Interests
and Property.
|
(a) The
Interests are, on the date hereof, and will be on the Closing Date, free and
clear of all liens and encumbrances and the Contributors have good, marketable
title thereto and the right to convey same in accordance with the terms of
this
Agreement. Upon delivery of the Contributors’ Assignment and
Assumption Agreement to the Acquirers at Closing, good valid and marketable
title to the Contributors’ Interests, free and clear of all liens and
encumbrances, will pass to the Acquirers. The Interests constitute
the only outstanding securities and membership interests of the
LLC.
(b) Except
for the lien created in connection with the Existing Mortgage, the Property
is,
on the date hereof, and will be on the Closing Date, free and clear of all
liens
and encumbrances, and the LLC has good, marketable title thereto and the right
to convey same. The LLC is the fee simple owner of the Real Property
and the sole owner of the Property.
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3.5
|
Bankruptcy.
No Act of Bankruptcy has occurred with respect to the
LLC.
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3.6 Brokerage
Commission. The Contributors have not engaged the services of,
nor is it or will it or Acquirer 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
Contributor.
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3.7
|
The
LLC.
|
(a) The
LLC is a limited liability company duly formed, validly existing and in good
standing under the laws of the State of Connecticut 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 or the LLC 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 Property or other
assets of the LLC, under any of the terms, conditions, or provisions of, the
Articles of Organization or LLC 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 any of the LLC’s properties or
assets.
(c) Except
for the Contributors, no party has any interest in the LLC or the Property
or
any portion thereof, 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 LLC or joint
venture.
(d) The
LLC has conducted no business other than the ownership and operation of the
Property.
3.8 Liabilities,
Debts and Obligations. Except for the Continuing Liabilities and
the Existing Mortgage, the LLC has no liabilities, debts or
obligations.
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3.9
|
Tax
Matters.
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(a) Notwithstanding
anything to the contrary contained in this Agreement, including without
limitation the use of words and phrases such as “sell,” “sale,” purchase,” and
“pay,” the parties hereto acknowledge and agree that it is their intent that the
transaction contemplated
hereby shall be treated for federal income tax purposes pursuant to
Section 721 of the Internal Revenue Code of 1986, as amended, as the
contribution of the Interests by the Contributors to the Acquirers in exchange
for the Consideration, and not as a transaction in which any Contributors are
acting other than in the capacity as a prospective partner in the Partnership
Acquirer.
(b) The
Contributors represent and warrant that they has obtained from their own counsel
advice regarding the tax consequences of (i) the transfer of the Interests
to
the Acquirers and the receipt of the Consideration therefor, (ii) the
Contributors’ admission as a limited partner of the Partnership Acquirer, and
(iii) any other transaction contemplated by this Agreement. Each
Contributor further represents and warrants that it has not relied on the
Acquirers or the Acquirers’ representatives or counsel for such tax
advice.
(c) The
Contributors have caused the LLC to file within the time and in the manner
prescribed by law all federal, state, and local tax returns and reports,
including but not limited to income, gross receipts, intangible, real property,
excise, withholding, franchise, sales, use, employment, personal property,
and
other tax returns and reports, required to be filed by the LLC under the laws
of
the United States and of each state or other jurisdiction in which the LLC
conducts business activities requiring the filing of tax returns or
reports. All tax returns and reports filed by the LLC are true and
correct in all material respects. The LLC has paid in full all taxes
of whatever kind or nature for the periods covered by such
returns. The LLC has not been delinquent in the payment of any tax,
assessment, or governmental charge or deposit and has no tax deficiency or
claim
outstanding, assessed, threatened, or proposed against it. The
charges, accruals, and reserves for unpaid taxes on the books and records of
the
LLC as of the Closing Date are sufficient in all respects for the payment of
all
unpaid federal, state, and local taxes of the LLC accrued for or applicable
to
all periods ended on or before the Closing Date. There are no tax
liens, whether imposed by the United States, any state, local, or other taxing
authority, outstanding against the LLC or any of its assets. The
federal, state, and local tax returns of the LLC have not been audited, nor
has
the LLC or the Contributor received any notice of any federal, state, or local
audit. 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.
(d) All
taxes, including real property taxes and 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
Contributors shall cause the LLC to file, all necessary returns and petitions
required to be filed through the Closing Date. The Contributors shall
cause the LLC to 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.
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 Existing Mortgage,
Permitted Title Exceptions, the Leases, and the Operating
Agreements.
3.11 No
Special Taxes. The Contributors have no 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’ 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 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 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. Without the prior written consent of the Acquirers, which
consent will not be unreasonably withheld or delayed, the Contributors shall
cause the LLC not to 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 Contributors cause the
LLC to enter into any agreements modifying the Operating
Agreements.
3.14 Warranties
and Guaranties. The Contributors shall cause the LLC not to
release or modify any warranties or guarantees, if any, of manufacturers,
suppliers and installers relating to the Improvements and the Tangible Personal
Property or any part thereof, except with the prior written consent of the
Acquirers, which consent shall not be unreasonably withheld or
delayed. A complete list of all such warranties and guaranties in
effect as of the date of this Agreement is attached hereto as
Exhibit H.
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 the Contributors shall cause
the LLC to pay all future premiums for such policies (and any replacements
thereof) on or before the due date therefor. The Contributors shall
cause the LLC to pay all premiums on, and shall cause the LLC not to cancel
or
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 Contributors shall cause the LLC to name
the Acquirers as additional insureds 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. The Contributors have no Knowledge of
any change or proposed change in the route, grade or width of, or otherwise
affecting, any street or road adjacent to or serving the Real
Property.
3.17 Litigation
with Respect to LLC. Except as set forth on Exhibit I
there is no action, suit or proceeding pending or known to be threatened against
or affecting the LLC or any part of or interest in the 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 material lien on the Property, any part thereof or any
interest therein, or (e) could otherwise materially and adversely affect the
Property, any part thereof or any interest therein or the use, operation,
condition or occupancy thereof.
3.18 Labor
Disputes and Agreements. There are not currently any labor
disputes pending or, threatened as to the operation or maintenance of the
Property or any part thereof. The LLC is not a party to any
union or other collective bargaining agreement with employees employed in
connection with the ownership, operation or maintenance of the
Property. The Acquirers will not be obligated to give or pay any
amount to any employee of the LLC, and the Acquirers shall not have any
liability under any pension or profit sharing plan that the LLC may have
established with respect to the Property or their or its employees.
3.19 Financial
Information. To the Contributors’ Knowledge, except as otherwise
disclosed in writing to the Acquirers prior to the end of the Study Period,
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 Acquirers is and shall be correct and complete in all material respects
and
presents accurately the financial condition of the LLC and results of the
operations of the Property for the periods indicated, except that such
statements do not have footnotes or schedules that may otherwise be required
by
GAAP. If requested by the Acquirers, the Contributors shall cause the
LLC to deliver promptly all four-week period ending financial information
available to the LLC. The LLC’s financial information is prepared
based on books and records maintained by the LLC in accordance with the LLC’s
accounting system. The LLC’s financial information has been provided
to the Acquirer 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.
3.20 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.
3.21 Operation
of Property. The Contributors covenant that between the date
hereof and the Closing Date, Contributors shall cause the LLC to (a) operate
the
Property only in the usual, regular and ordinary manner consistent with the
LLC’s prior practice, (b) maintain the books of account and records in the
usual, regular and ordinary manner, in accordance with sound accounting
principles applied on a basis consistent with the basis used in keeping its
books in prior years, and (c) use all reasonable efforts to preserve intact
the
present business organization, keep available the services of the present
officers and employees and preserve their relationships with suppliers and
others having business dealings with them. The Contributors shall
cause the LLC to continue to make good faith efforts to take guest room
reservations and to book functions and meetings and otherwise to promote the
business of the Property in generally the same manner as the LLC did prior
to
the execution of this Agreement. Except as otherwise permitted
hereby, from the date hereof until Closing, the Contributors shall use their
good faith efforts to ensure that the LLC shall not take any action or fail
to
take action the result of which (i) would have a material adverse effect on
the
Property or the Acquirers’ ability to continue the operation thereof after the
Closing Date in substantially the same manner as presently conducted, (ii)
reduce or cause to be reduced any room rents or any other charges over which
Contributors have operational control, or (iii) would cause any of the
representations and warranties contained in this Article III to be untrue
as of Closing.
3.22 Bankruptcy
with respect to LLC. No Act of Bankruptcy has occurred with
respect to the LLC.
3.23 Hazardous
Substances. Except for matters in LLC’s or Acquirers’ audits,
Contributors have no Knowledge: (a) of the presence of any
“Hazardous Substances” (as defined below) on the Property, or any portion
thereof, or, (b) of any spills, releases, discharges, or disposal of
Hazardous Substances that have occurred or are presently occurring on or onto
the Property, or any portion thereof, or (c) of the presence of any PCB
transformers serving, or stored on, the Property, or any portion thereof, and
Contributors have no Knowledge of any failure to comply with any applicable
local, state and federal environmental laws, regulations, ordinances and
administrative and judicial orders relating to the generation, recycling, reuse,
sale, storage, handling, transport and disposal of any Hazardous Substances
(as
used herein, “Hazardous Substances” shall mean any substance or material whose
presence, nature, quantity or intensity of existence, use, manufacture,
disposal, transportation, spill, release or effect, either by itself or in
combination with other materials is either: (1) potentially
injurious to the public health, safety or welfare, the environment or the
Property, (2) regulated, monitored or defined as a hazardous or toxic
substance or waste by any Governmental Body, or (3) a basis for liability
of the
owner
of the Property to any Governmental Body or third party, and Hazardous
Substances shall include, but not be limited to, hydrocarbons, petroleum,
gasoline, crude oil, or any products, by-products or components thereof, and
asbestos). Notwithstanding anything to the contrary contained herein
Contributor shall have no liability to Acquirer for any Hazardous Substances
of
which Contributor has no Knowledge.
3.24 Room
Furnishings. All public spaces, lobbies, meeting rooms, and each
room in the Hotel available for guest rental is furnished in accordance with
commercially reasonable standards for the Hotel and room type.
3.25 Intentionally
Omitted.
3.26 Independent
Audit. Contributors shall provide access by Acquirers’
representatives, to all financial and other information relating to the
Property
and the LLC.
3.27 Bulk
Sale Compliance. Contributors shall indemnify Acquirers against
any claim, loss or liability arising under the bulk sales law in connection
with
the transaction contemplated herein.
3.28 Sufficiency
of Certain Items. The Property contains not less
than:
(a) a
sufficient amount of furniture, furnishings, color television sets, carpets,
drapes, rugs, floor coverings, mattresses, pillows, bedspreads and the like,
to
furnish each guest room, so that each such guest room is, in fact, fully
furnished; and
(b) a
sufficient amount of towels, washcloths and bed linens, so that there are three
sets of towels, washcloths and linens for each guest room (one on the beds,
one
on the shelves, and one in the laundry), together with a sufficient supply
of
paper goods, soaps, cleaning supplies and other such supplies and materials,
as
are reasonably adequate for the current operation of the Hotel.
3.29 Intentionally
Omitted.
3.30 Leases. True,
complete copies of the Leases, are attached as Exhibit D
hereto. The Leases are, and will at Closing be, in full force and
effect and neither Contributors nor the LLC, is in default and the Contributors
shall make good faith efforts for themselves and the LLC not to be in default
with respect thereto (with or without the giving of any notice and/or lapse
of
time). The Leases are, or will be at Closing, freely assignable by
Contributors and Contributors will have obtained all consents of any third
party
necessary to assign the Leases to Acquirers.
3.31 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 has granted an option or right of first refusal to acquire the Interests
or
the Property or any part thereof.
3.32 Securities
Law Matters.
(a) The
Contributors are knowledgeable, sophisticated and experienced in business and
financial matters; the Contributors have previously invested in securities
similar to the LP Units and fully understand the limitations on transfer imposed
by the federal securities laws and as described in this Agreement. The
Contributors are able to bear the economic risk of holding the LP Units for
an
indefinite period and are able to afford the complete loss of its investment
in
the LP Units; the Contributors have received and reviewed all information and
documents about or pertaining to Partnership Acquirer and Hersha, the business
and prospects of Partnership Acquirer and Hersha and the issuance of the LP
Units as the Contributors deem necessary or desirable; and the Contributors
have
had the opportunity to review public filings made with the SEC pursuant to
the
Exchange Act related to Partnership Acquirer and Hersha; and the Contributors
have been given the opportunity to obtain any additional information or
documents and to ask questions and receive answers about such information and
documents, Partnership Acquirer, Hersha, the business and prospects of
Partnership Acquirer and Hersha and the LP Units which the Contributors deem
necessary or desirable to evaluate the merits and risks related to their
investment in the LP Units and to conduct their own independent valuation of
the
LP Units; and the Contributors understand and have taken cognizance of all
risk
factors related to the purchase of the LP Units. The Contributors
were at no time presented with or solicited by any form of general solicitation
or general advertising, including, but not limited to, any advertisement,
article, notice or other communication published in any newspaper, magazine,
or
similar media or broadcast over television or radio, or any seminar or meeting
whose attendees have been invited by any general solicitation or general
advertising in connection with the acquisition of the LP Units contemplated
hereby. The Contributors are sophisticated real estate investors. In
acquiring the LP Units and engaging in this transaction, the Contributors are
not relying upon any representations made to it by Acquirers or Hersha, or
any
of the officers, employees, or agents of Acquirers or Hersha not contained
herein. The Contributors are relying upon their own independent analysis and
assessment (including with respect to taxes), and the advice of such
Contributors’ advisors (including tax advisors), and not upon that of Acquirers
or Hersha or any of Acquirers’ or Hersha’s advisors or affiliates, for purposes
of evaluating, entering into, and consummating the transactions contemplated
by
this Agreement. The Contributors represent and warrant that they has reviewed
and approved the form of the Partnership Acquirer’s Limited Partnership
Agreement attached hereto as Exhibit K.
(b) The
Contributors understand that the LP Units have not been registered under the
Securities Act or any state securities acts and are instead being offered and
sold in reliance on an exemption from such registration requirements. The LP
Units issuable to the Contributors are being acquired solely for the
Contributors’ own accounts, for investment, and are not being acquired with a
view to, or for resale in connection with, any distribution, subdivision, or
fractionalization thereof, in violation of such laws, and the Contributors
have
no present
intention to enter into any contract, undertaking, agreement, or arrangement
with respect to any such resale. The Contributors understand that any
certificates evidencing the LP Units will contain appropriate legends as
required by the Partnership Acquirer’s Limited Partnership Agreement that
reflect the non-negotiability of the certificate and that the LP Units
represented by the certificate are governed by and are transferable only in
accordance with the provisions of the Partnership Acquirer’s Limited Partnership
Agreement.
(c) Each
Contributor is an "accredited investor" as that term is defined in Rule 501
of
Regulation D under the Securities Act. In order to be an “accredited
investor”, as such term is defined in Rule 501 of Regulation D promulgated under
the Securities Act, you must be one of the following:
(i) a
bank as defined in Section 3(a)(2) of the Securities Act, or a savings and
loan
association or other institution as defined in Section 3(a)(5)(A) of the
Securities Act, whether acting in its individual or fiduciary
capacity;
(ii) a
broker or dealer registered pursuant to Section 15 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”);
(iii) an
insurance company as defined in Section 2(13) of the Securities
Act;
(iv) an
investment company registered under the Investment Company Act of 1940, as
amended;
(v) a
business development company as defined in Section 2(a)(48) of the Investment
Company Act of 1940, as amended;
(vi) a
Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment
Act
of 1958, as amended;
(vii) a
plan established and maintained by a state, its political subdivisions, or
any
agency or instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess
of Five Million Dollars ($5,000,000.00);
(viii)
an employee benefit
plan within the meaning of the Employee Retirement Income Security Act of 1974,
as amended if the investment decision is made by a plan fiduciary, as defined
in
Section 3(21) of such Act, which is either a bank, savings and loan association,
insurance company or registered investment adviser, or if the employee benefit
plan has total assets in excess of Five Million Dollars ($5,000,000.00) or,
if a
self-directed plan, with investment decisions made sole by persons that are
accredited investors;
(ix) a
private business development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940, as amended;
(x) an
(a) organization described in Section 501(c)(3) of the Internal Revenue Code
of
1986, as amended, (b) corporation, (c) Massachusetts or similar business trust,
(d) partnership, or (e) limited liability company, in each case not formed
for
the specific purpose of acquiring LP Units of the Acquirer or shares of Hersha’s
common stock, with total assets in excess of Five Million Dollars
($5,000,000.00);
(xi) a
director or executive officer of Acquirer or Hersha;
(xii) a
natural person whose individual net worth, or joint net worth with his or her
spouse, at the time of his or her acquisition of the LP Units exceeds One
Million Dollars ($1,000,000.00);
(xiii)
a natural person
who has an individual income in excess of Two Hundred Thousand Dollars
($200,000.00) in each of the two most recent years or joint income with that
person’s spouse in excess of Three Hundred Thousand Dollars ($300,000.00) in
each of those years and has a reasonable expectation of reaching the same income
level in the current year;
(xiv)
a trust, with total
assets in excess of Five Million Dollars ($5,000,000.00), not formed for the
specific purpose of acquiring LP Units of the Acquirer or shares of Hersha’s
common stock whose acquisition of LP Units of the Acquirer or shares of Hersha’s
common stock is directed by a sophisticated person as described in Rule
506(b)(2)(ii) of Regulation D under the Securities Act; or
(xv)
an entity in which
all of the equity owners are accredited investors.
3.33 Patriot
Act Representations. Each Contributor and, to the actual
knowledge of each such Contributor, any direct or indirect owner of the LLC
or
such Contributor, (i) are not included on any Government List (as defined
below), (ii) are not persons who have been determined by competent authority
to
be subject to the prohibitions contained in the Presidential Executive Order
No.
13224 or any other similar prohibitions contained in the rules and regulations
of the OFAC or in any enabling legislation or other Presidential Executive
Orders in respect thereof, (iii) have not been indicted or convicted of any
Patriot Act Offenses, or (iv) are not currently under investigation by any
governmental authority for alleged criminal activity. For purposes of this
Agreement, (i) “Government List” means (A) the Specially Designated Nationals
and Blocked Persons List maintained by OFAC, (B) any other list of terrorists,
terrorist organizations or narcotics traffickers maintained pursuant to any
of
the Rules and Regulations of OFAC, or (C) any similar list maintained by the
United States Department of State, the United States Department of Commerce
or
any other governmental authority or pursuant to any Executive Order of the
President of the United States of America; (ii) “OFAC” means
the
Office of Foreign Asset Control, U.S. Department of the Treasury, (iii) “Patriot
Act” means the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001,
as
the same may be amended from time to time, and corresponding provisions of
future laws, and (iv) “Patriot Act Offense” means any violation of the criminal
laws of the United States of America or of any of the several states, or that
would be a criminal violation if committed within the jurisdiction of the United
States of America or any of the several states, relating to terrorism or the
laundering of monetary instruments, including any offense under (A) the criminal
laws against terrorism, (B) the criminal laws against money laundering, (C)
the
Bank Secrecy Act, as amended, (D) the Money Laundering Control Act of 1986,
as
amended, or (E) the Patriot Act and also includes the crimes of conspiracy
to
commit, or aiding and abetting another to commit, any of the
foregoing.
Each
of
the representations, warranties and covenants contained in this Article
III and its various subparagraphs are intended for the benefit of the
Acquirers and may be waived in whole or in part, by the Acquirers, but only
by
an instrument in writing signed by the Acquirers. Each of said
representations, warranties and covenants shall survive the closing of the
transaction contemplated hereby for twelve (12) months, and no investigation,
audit, inspection, review or the like conducted by or on behalf of the Acquirers
shall be deemed to terminate the effect of any such representations, warranties
and covenants, it being understood that the Acquirers have the right to rely
thereon and that each such representation, warranty and covenant constitutes
a
material inducement to the Acquirers to execute this Agreement and to close
the
transaction contemplated hereby and to pay the Consideration to the
Contributors. Acquirers acknowledge and agree that, except for the
representations and warranties expressly set forth herein, Acquirers are
acquiring the LLC and Property “AS-IS, WHERE-IS” with no representations or
warranties by or from Contributors, express or implied, or any nature
whatsoever.
ARTICLE
IV
ACQUIRER'S
REPRESENTATIONS, WARRANTIES AND COVENANTS
To
induce
the Contributors to enter into this Agreement and to sell the Interests, the
Acquirers hereby make the following representations, warranties and covenants
upon each of which the Acquirers acknowledge and agree that the Contributors
are
entitled to rely and has relied:
4.1 Organization
and
Power.
(a) The
Partnership Acquirer 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 business 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 Acquirer
hereunder.
(b) The
Manager Acquirer is a Delaware limited liability company and has 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 Manager
Acquirer hereunder.
4.2 Noncontravention. The
execution and delivery of this Agreement and the performance by the Acquirers
of
their obligations hereunder do not and will not contravene, or constitute a
default under, any provisions of applicable law or regulation, the Partnership
Acquirer’s partnership agreement, the Manager Acquirer’s operating agreement, or
any agreement, judgment, injunction, order, decree or other instrument binding
upon the Acquirers or result in the creation of any lien or other encumbrance
on
any asset of the Acquirers.
4.3 Litigation. There
is no action, suit or proceeding, pending or known to be threatened, against
or
affecting the Acquirers 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 Acquirers are a party or by which they are bound and
that is to be used in connection with, or is contemplated by, this Agreement,
(b) could materially and adversely affect the ability of the Acquirers to
perform their obligations hereunder, or under any document to be delivered
pursuant hereto.
4.4 Bankruptcy. No
Act of Bankruptcy has occurred with respect to the Acquirers.
4.5 No
Brokers. The Acquirers have not engaged the services of, nor are
they or will they 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
Acquirers’ 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 Acquirers, 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 Closing Date as if then made, there shall have occurred
no
material adverse change in the financial condition of the Property or 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 Acquirers at Closing a certificate to the
foregoing effect.
5.3 Title
Insurance. Good and indefeasible title to the fee interest in the
Real Property shall be insurable as such by the Title Company at or below its
regularly scheduled rates subject only to Permitted Title Exceptions as
determined in accordance with Section 2.2.
5.4 Condition
of
Improvements. The Improvements and the Tangible Personal Property
(including but not limited to the mechanical systems, plumbing, electrical,
wiring, appliances, fixtures, heating, air conditioning and ventilating
equipment, elevators, boilers, equipment, roofs, structural members and
furnaces) shall be in the same condition at Closing as they are as of the date
hereof, reasonable wear and tear excepted. Prior to Closing, the
Contributors shall not have diminished the quality or quantity of maintenance
and upkeep services heretofore provided to the Real Property and the Tangible
Personal Property and the Contributors shall not have diminished the
Inventory. The Contributors shall not have removed or caused or
permitted to be removed any part or portion of the Real Property or the Tangible
Personal Property unless the same is replaced, prior to Closing, with similar
items of at least equal quality and acceptable to the Acquirers.
5.5 Utilities. All
of the Utilities shall be installed in and operating at the Property, and
service shall be available for the removal of garbage and other waste from
the
Property.
5.6 Intentionally
Omitted.
5.7 Interests. From
the date hereof to and including the Closing Date, Contributors shall not sell,
assign, pledge, hypothecate or otherwise transfer the Interests, except as
contemplated by this Agreement, nor shall the Contributors cause or permit
the
LLC to issue any securities or membership interests to any person or to sell,
pledge, transfer or otherwise dispose of the Property or any interest
therein.
5.8 Existing
Mortgage. Acquirer acknowledges that the Property and the LLC are
subject to the Existing Mortgage, loans in the total original principal sum
of
Eight Million Four Hundred Twenty-Three Thousand Dollars ($8,423,000.00) from
New Alliance Bank, a Connecticut banking corporation, successor by merger to
Westbank, a Massachusetts banking corporation. Acquirer will assume
or modify the Existing Mortgage.
5.9 Third
Party
Consents. In the event of an assumption or modification of the
Existing Mortgage as contemplated in Section 2.3(b) and 5.8, then as a
condition to Closing, the LLC shall receive approval from New Alliance Bank
(i)
to the contribution of the Interests to Acquirers as contemplated hereunder
and
(ii) to the percentage lease structure whereby, on the Closing Date, the LLC
shall lease the Property to a REIT subsidiary (“Lessee”) pursuant to a
percentage lease, and Lessee shall enter into a new management agreement with
Manager.
ARTICLE
VI
CLOSING
6.1
Closing. Closing
shall be held at a location that is mutually acceptable to the parties, on
or
before July 1, 2007.
6.2 Contributor’
Deliveries. At Closing, the Contributors shall deliver to
Acquirers 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) Certificates
representing the Interests.
(b) The
certificate required by Section 5.2.
(c) The
Assignment and Assumption Agreement.
(d)
Any and all service contracts, space leases, and agreements, including but
not
limited to that certain Agreement of Lease between 44 Hersha Norwich Associates,
LLC, and Chelsearose, L.L.C., dated June 1, 2006 (the “Restaurant
Lease”).
(e) 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.
(f) The
FIRPTA Certificates.
(g) True,
correct and complete copies of all warranties, if any, of manufacturers,
suppliers and installers possessed by the Contributors and relating to the
Improvements and the Personal Property, or any part thereof.
(h) Copies
of the LLC’s Organizational Documents.
(i) Appropriate
consent of the LLC, authorizing (A) the execution of any documents to be
executed and delivered by the LLC prior to, at or otherwise in connection
with
Closing and in connection with the transactions contemplated by this Agreement,
and (B) the performance by the LLC of its obligations hereunder and under
such documents.
(j) Valid,
final and unconditional certificate(s) of occupancy for the Real Property
and
Improvements, issued by the appropriate Governmental Body.
(k) Such
proof as the Acquirer may reasonably require with respect to Contributors’
compliance with the bulk sales laws or similar statutes.
(l) A
written instrument executed by the Contributors, conveying and transferring
to
the Acquirers all of the Contributors’ right, title and interest in any
telephone numbers and facsimile numbers relating to the Property, and, if
the
Contributors maintain a post office box, conveying to the Acquirers all of
their
interest in and to such post office box and the number associated therewith,
so
as to assure a continuity in operation and communication.
(m) All
current real estate and personal property tax bills in the Contributors’
possession or under their control.
(n) A
complete set of all guest registration cards, guest transcripts, guest
histories, and all other available guest information.
(o) An
updated schedule of employees, showing salaries and duties with a statement
of
the length of service of each such employee, brought current to a date not
more
than 48 hours prior to the Closing.
(p) A
complete list of all advance room reservations, functions and the like, in
reasonable detail so as to enable the Acquirers to honor the Contributors’
commitments in that regard.
(q) A
list of the Contributors’ outstanding accounts receivable as of midnight on the
date prior to the Closing, specifying the name of each account and the amount
due the Contributors.
(r)
Possession of the Property and all keys for the Property.
(s) All
books, records, operating reports, appraisal reports, files and other materials
in the Contributors’ possession or control which are necessary in the Acquirers’
discretion to maintain continuity of operation of the Property.
(t)
To the extent permitted under applicable law, documents of transfer necessary
to
transfer to the Acquirers the Contributors’ employment rating for workmens'
compensation and state unemployment tax purposes.
(u) An
assignment of all warranties and guarantees from all contractors and
subcontractors, manufacturers, and suppliers in effect with respect to the
Improvements.
(v) Complete
set of “as-built” drawings for the Improvements as available in Contributors’
possession.
(w) Such
proof, reasonably acceptable to the Acquirers evidencing the payment by
Contributors of all transfer taxes incurred in connection with the transactions
contemplated by this Agreement.
(x)
The Joinder.
(y) Any
other document or instrument reasonably requested by the Acquirers or required
hereby.
6.3 Acquirers’
Deliveries. At Closing, the Acquirers shall pay or deliver to the
Contributor the following:
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(a)
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The
Consideration described in
Section 2.3.
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(b)
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The
Assignment and Assumption
Agreement.
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(c)
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The
Joinder.
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(d) Any
other document or instrument reasonably requested by the Contributors or
required hereby.
6.4 Closing
Costs. Each party shall pay its own legal fees and
expenses. All filing fees, and recording or other similar taxes, and
all charges for title insurance premiums shall be paid by
Acquirers. Any other costs or expenses shall be paid by
Contributors.
6.5 Income
and Expense Allocations.
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(a)
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Items
to be Apportioned. The following shall be prorated and
apportioned between Contributors and the Acquirers as of 11:59:59
P.M.
(local Hotel time) on the Apportionment Date, except as otherwise
expressly provided to the contrary
below:
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(i)
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Property
Taxes. Real estate taxes, ad valorem taxes, personal
property taxes, special assessments, sewer rents and taxes, and any
other
governmental tax or charge levied or assessed against the Property
(collectively, the “Property Taxes”), shall be apportioned on the basis of
the respective periods for which each is assessed or
imposed. If the Closing Date shall occur either before an
assessment is made or a tax rate is fixed for the tax period in which
the
Closing occurs, the apportionment of such Property Taxes shall be
calculated on the basis of the prior year’s Property Taxes, but, after the
assessment and tax rate for the current year are fixed, the apportionment
thereof shall be recalculated and the Contributors or the Acquirers,
as
the case may be, shall promptly pay to the other the amount determined
to
be due based on such recalculation.
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(ii)
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Utilities. The
Utilities shall be apportioned (i) by having the utility companies
servicing the Property make final meter readings on the Apportionment
Date, the payment of which shall be the Contributors’ responsibility, or
(ii) if such readings cannot be obtained, on the basis of the most
recent
bills that are available, reasonably adjusted (if necessary) to
reflect
any changes in occupancy, temperature or other relevant variables
between
the respective periods covered by such bills and the most recent
relevant
at period, to the extent such changes would have a material impact
on the
amount of the estimated charges for the most recent period for
the utility
in question. If the apportionment is not based on an actual
current reading, then, upon the taking of a subsequent actual reading,
or
upon receipt of a subsequent xxxx, such apportionment shall be
recalculated and the Contributors or the Acquirers, as the case
may be,
shall promptly pay to the other the amount determined to be due
upon such
recalculation. The Acquirers shall reimburse the Contributors
for any outstanding utility deposits made by the
Contributors
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(iii)
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Licenses. All
repaid fees or other charges for transferable licenses, if any, shall
be
apportioned on the basis of the fiscal period covered by such license,
but
all amounts refundable under unassigned or unassignable licenses
shall
remain the property of
Contributors.
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(iv)
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Service
Contracts, Space Leases and Agreements. Amounts paid or
payable under any service contract, space lease and agreement, including
but not limited to the Restaurant Lease shall be apportioned on the
basis
of the period covered by such
payments.
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(v)
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Revenues. All
revenues from the rental of guestrooms and from food and beverage
and
other sales or services, net of applicable sales taxes and other
governmental impositions (whether such revenues, sales taxes or other
governmental impositions are collected or not) that are posted to
a guest
room account through 11:59:59 pm on the Apportionment Date shall
be
divided equally among the Contributors and the Acquirers. After
this time all revenues from the rental of guestrooms and from food
and
beverage and other sales or services posted to a guest room account
shall
belong to the Acquirers. For purpose of these apportionments,
the hotel personnel shall promptly post all charges as they are
incurred. Guestroom rental charges of those guests who check-in
on the Apportionment Date shall be deemed incurred at
check-in. Revenues from any meeting room occupied, but vacated
prior to midnight of the Apportionment Date shall belong to the
Contributors.
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Revenues
from any meeting room that was not occupied until after this time shall belong
to the Acquirers. Revenues for any meeting room that was occupied by
the same customer on both the Apportionment Date and the Closing Date shall
be
allocated between the Contributors and the Acquirers based on the number of
hours on each such date that the room was occupied and unavailable for rental
to
other customers.
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(vi)
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Sales
Taxes. All sales, use and occupancy taxes, if any, due or
to become due in connection with revenues from the Hotel apportioned
or
allocated to the Contributors in accordance with Section 6.5(a)(iv)
shall
be paid by the Contributors, and all sales, use and occupancy taxes
due or
to become due in connection with revenues apportioned or allocated
to the
Acquirers in accordance with Section 6.5(a)(iv) shall be paid by
the
Acquirers. The Contributors and the Acquirers shall each
indemnify the other from and against any liability for unpaid sales,
use
or occupancy tax resulting from the indemnifying party’s failure to make
the payments required under this Section
6.5(a)(v).
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(b)
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Receivables. The
Acquirers shall not purchase the book of accounts
receivable.
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(c)
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House
Banks. The Acquirers shall purchase the xxxxx cash funds and cashiers’
banks, provided that the Acquirers shall only purchase cash on hand
and
shall in no event purchase any
receipts.
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(d)
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Employee
Wages and Other Compensation. On or before the Closing
Date, The Contributors shall pay or cause to be paid (i) all unpaid
wages
or salaries (including any earned but unused vacation days accrued,
irrespective of whether such vacation days are actually vested) of
all
persons employed at the Property; (ii) any employment taxes or government
levies on item (i) above; and (iii) any retirement plan payments,
medical
insurance payments or other similar deductions. Hereinafter,
(i) through (iii) above shall be referred to as the “Contributors’
Employee Payment.” The Contributors shall be responsible for
Contributors’ Employee Payment accruing through 11:59:59 pm on the
Apportionment Date. From that point forward, the Acquirers
shall be responsible for these expenses for those persons who the
Acquirers elect to employ.
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(e)
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Reconciliation
and Final Payment; Intent of Section. The Contributors and
the Acquirers, shall cooperate after Closing to make a final determination
of the prorations and adjustments required hereunder as soon as
reasonably
practicable, but in no event later than ninety (90) days after
the Closing
Date (except with respect to any item which is not determinable
within
such time frame, as to which the time period shall be extended
until such
item is determinable). Upon the final reconciliation of the
prorations and adjustments under this Section 6.5, the party which
owes
the other party any sums hereunder shall pay such party such sums
within
ten (10) days after the reconciliation thereof. It is the
intent of the parties that all items herein which are subject to
apportionment shall, except as otherwise specifically provided
in Section
6.5, result in the Contributors receiving all of the economic benefits
and
burdens of the Hotel with respect to the period prior to the Closing
Date,
and the Acquirers receiving all of the economic benefits and burdens
of
the Hotel with respect to the period from and after the Closing
Date.
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(f)
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Accounts
Payable. The Contributors shall retain and be responsible
for the payment of all accounts payable and other debts and liabilities
of
the Contributors or otherwise relating to the Hotel, which have accrued
prior to the Closing, whether or not invoiced (the “Accounts Payable”),
except to the extent the Acquirers have received a credit for any
such
item under this Section 6.5 of this Agreement. The parties
acknowledge and agree that except as may be expressly set forth in
this
Agreement, the Acquirers are in no way assuming any responsibility
for the
payment of any Accounts Payable of the
Contributors.
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(g)
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Survival. The
provisions of this Section 6.5 shall survive the Closing for a period
of
six (6) months.
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6.6 Safes. On
the Closing Date Contributors shall cause the delivery to Acquirers of all
of
Contributors’ keys to all safes and safe deposit boxes (collectively, the
“safes”) at the Property. On or prior to the Closing Date,
Contributors shall give written notices to those persons who have deposited
items in any central safes (excluding in-room safes), advising them of the
sale
of the Hotel to Acquirers and requesting the removal or verification of their
contents in the safes on the Closing Date. All such removals or
verifications on the Closing Date shall be under the supervision of
Contributors’ and Acquirers’ respective representatives. All contents
which are to remain in the safes shall be recorded. Items belonging
to guests who have not responded to such written notice by so removing or
verifying their safe contents by the end of the day shall be recorded in the
presence of the respective representatives. Any such contents so
verified or recorded and thereafter remaining in the hands of Acquirers shall
be
the responsibility of Acquirers and Acquirers hereby agree to indemnify, defend
and hold Contributors harmless from any liability
therefor. Contributors hereby agree to indemnify and hold Acquirers
harmless from any liability arising from claims by guests for any loss of
contents in the safes not verified or recorded on the Closing
Date.
6.7 Completion
of Conversion. On the Closing Date Contributors shall provide proof of
completion of items identified in the Intercontinental Hotels Group Property
Improvement Plan dated as of April 13, 2005, and in a Post Opening
Visit/Extension Request letter from Intercontinental Hotels Group dated as
of
January 29, 2007 (collectively, the “PIP” and attached hereto as Exhibit
L). If any items remain uncompleted, Acquirers shall have the right to
require Contributors to place Two Hundred Thousand Dollars ($200,000.00) in
escrow with Hersha Capital Corporation unless and until Contributors provide
proof of completion to Acquirers in the form of acknowledgement by
Intercontinental Hotels Group that the items identified in the PIP are
complete.
ARTICLE
VII
CONDEMNATION;
RISK OF LOSS
7.1 Condemnation. In
the event of any actual or threatened taking, pursuant to the power of eminent
domain, of all or any portion of the Real Property, or any proposed sale in
lieu
thereof, the Contributors shall give written notice thereof to the Acquirers
promptly after the Contributors learn or receive notice thereof. If
all or any part of the Real Property is, or is to be, so condemned or sold,
the
Acquirers shall have the right to terminate this Agreement pursuant to
Section 8.3. If the Acquirers elect not to terminate this
Agreement, all proceeds, awards and other payments arising out of such
condemnation or sale (actual or threatened) shall be paid or assigned, as
applicable, to the Acquirers at Closing.
7.2 Risk
of Loss. The risk of any loss or damage to the Property
prior to the recordation of the Deed shall remain upon
Contributors. If any such loss or damage to more than ten percent
(10%) of the value of the Improvements occurs prior to Closing or any such
loss
or damage is uninsured or underinsured, the Acquirers shall have the right
to
terminate this Agreement pursuant to Section 8.3. If the
Acquirers elect not to terminate this Agreement, all insurance proceeds and
rights to proceeds arising out of such loss or damage shall be paid or assigned,
as applicable, to the Acquirers at Closing.
ARTICLE
VIII
LIABILITY
OF ACQUIRERS; INDEMNIFICATION BY CONTRIBUTORS;
TERMINATION
RIGHTS
8.1 Liability
of Acquirers. Except for any obligation expressly assumed or
agreed to be assumed by the Acquirers hereunder and in the Assignment and
Assumption Agreement, the Acquirers do not assume any obligation of the
Contributors or any liability for claims arising out of any occurrence prior
to
Closing.
8.2 Indemnification
by Contributors. The Contributors hereby indemnify and hold the
Acquirers harmless from and against any and all suits, actions, claims, costs,
penalties, damages,
losses, liabilities and expenses, subject to Section 9.11 that
may at any time be incurred by the Acquirers, whether before or after Closing,
(i) 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, (ii) relating
to
any suits, litigation or actions brought against any Contributors or the LLC
prior to the Closing Date, (iii) in connection with any and all liabilities
and
obligations of the LLC occurring, accruing or arising prior to the Closing
Date,
(iv) resulting from any default of the Contributors before and after the Closing
Date and resulting from the change in ownership of the LLC under that certain
Holiday Inn Hotel Conversion License Agreement by and between Holiday
Hospitality Franchising, Inc. and the LLC, dated as of June 30, 2005, (v)
resulting from the failure of Contributors to complete the PIP items to the
satisfaction of Intercontinental Hotels Group, (vi) resulting from failure
of
the Contributors to notify and obtain consent from Holiday Hospitality
Franchising, Inc., and/or (vii) as a result of or in connection with the use
or
operation of the Property prior to the Closing Date.
8.3 Termination
by Acquirers. 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 Acquirers to terminate this Agreement and its obligations
hereunder, and the Contributors fail to cure any such matter within five days
after notice thereof from the Acquirers, the Acquirers, at their option and
as
their sole remedy, shall elect either (a) to terminate this
Agreement and receive a refund of the entire Deposit, with interest,
and all other rights and obligations of the Contributors and the Acquirers
hereunder shall terminate immediately, or (b) to waive their right to
terminate and, instead, to proceed to Closing.
8.4 Termination
by Contributor. If, prior to Closing, the Acquirers default in
performing any of their obligations under this Agreement, and the Acquirers
fail
to cure any such default within five (5) business days after notice thereof
from
the Contributors, then the Contributors’ sole remedy for such default shall be
to terminate this Agreement.
ARTICLE
IX
MISCELLANEOUS
PROVISIONS
9.1 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.
9.2 Assignments. The
Acquirers may assign their rights hereunder to any affiliate of Acquirers
without the consent of the Contributors. No such assignment shall
relieve the Acquirers of any of their obligations and liabilities
hereunder.
9.3 Successors
and Assigns. The benefits and burdens of this Agreement shall
inure to the benefit of and bind the Acquirers and the Contributors and their
respective party hereto.
9.4 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.
9.5 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
State of Connecticut.
9.6 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.
9.7 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.
9.8 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.
9.9 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 Contributor:
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Hersha
Norwich Associates, LLC
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00
Xxxxxx Xxxxx
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Xxxxxxxxxx,
XX 00000
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Phone:
(000) 000-0000
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Fax:
(000) 000-0000
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Xxxxx
Xxxxx
|
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000
Xxxxxxx Xxxxx Xxxx
|
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Xxxxxxx,
XX 00000
|
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Xxxxxx
Xxxx
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000
Xxxxxxx Xxxx
|
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Xxxxxx,
XX 00000
|
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K&D
Investment Associates, L.L.C.
|
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000
Xxxxxxx Xxxx
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Xxxxxx,
XX 00000
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With
a copy to:
|
Xxxx
X. Xxxxxx, Esq.
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Doherty,
Wallace, Pillsbury and Xxxxxx, P.C.
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Xxx
Xxxxxxx Xxxxx, Xxxxx 0000
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Xxxxxxxxxxx,
XX 00000
|
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Phone:
(000) 000-0000
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Fax:
(000) 000-0000
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If
to the Acquirer:
|
Hersha
Hospitality Limited Partnership
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|
00
Xxxxxx Xxxxx
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Xxxxxxxxxx,
XX 00000
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Phone:
(000) 000-0000
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Fax:
(000) 000-0000
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Attn:
Xxxxxx X. Xxxxxx
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With
a copy to:
|
Lok
Mohapatra, Esquire
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Franklin
Firm, LLP
|
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Penn
Mutual Towers
|
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|
000
Xxxxxx Xxxxxx, 0xx
xxxxx
|
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Xxxxxxxxxxxx,
XX 00000
|
|
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Phone: (000)
000-0000
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Fax: (000)
000-0000
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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.
9.10 Incorporation
by Reference. All of the exhibits attached hereto are by this
reference incorporated herein and made a part hereof.
9.11 Survival. All
of the representations, warranties, covenants and
agreements of the Contributor and the Acquirer made in, or pursuant to, this
Agreement shall survive for a period of twelve (12) months following Closing
and
shall not merge into the Deed or any other document
or instrument executed and delivered in connection herewith, except for the
representations and warranties set forth in Sections 3.4, 3.7 and 3.9, which
shall survive for periods coterminous with applicable statutes of
limitations.
9.12 Further
Assurances. The Contributors and the Acquirers 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.
9.13 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 Acquirers
specifically established hereby.
9.14 Time
of Essence. Time is of the essence with respect to every
provision hereof.
9.15 Confidentiality. Contributors
and their representatives, including any professionals representing
Contributors, shall keep the existence and terms of this Agreement strictly
confidential, except to the extent disclosure is compelled by law, and then
only
to the extent of such compulsion.
[The
remainder of this page is left intentionally blank.]
IN
WITNESS WHEREOF, the Contributors and the Acquirers have caused this
Agreement to be executed in their names by their respective duly-authorized
representatives.
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CONTRIBUTORS:
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HERSHA
NORWICH ASSOCIATES, LLC, a Delaware limited liability
company
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By:
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Name:
Xxxx X. Xxxx
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Title:
Manager
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XXXXX
XXXXX
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Xxxxx
Xxxxx, an individual
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XXXXXX
XXXX
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Xxxxxx
Xxxx, an individual
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K&D
INVESTMENT ASSOCIATES, L.L.C., a Michigan limited liability
company
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By:
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Name:
Xxxxx X. Xxxx
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Title:
Manager
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||
| ACQUIRERS: | |||
| 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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|||
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Name:
Xxxxxx X. Xxxxxx
|
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Title:
CFO
|
|||
| 44 NORWICH MANAGER, LLC, a Delaware limited liability company | |||
|
By:
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||
| Name: Xxxxxx X. Xxxxxx | |||
| Title: Manager | |||
