EXHIBIT 10.1
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HOTEL LEASE TERMINATION AGREEMENT
BY AND AMONG
HERSHA HOSPITALITY TRUST, A MARYLAND REAL ESTATE INVESTMENT TRUST;
HERSHA HOSPITALITY LIMITED PARTNERSHIP, A VIRGINIA LIMITED PARTNERSHIP;
44 NEW ENGLAND MANAGEMENT COMPANY, A VIRGINIA CORPORATION;
HERSHA HOSPITALITY MANAGEMENT, L.P., A PENNSYLVANIA LIMITED PARTNERSHIP;
THE LIMITED PARTNERS OF HERSHA HOSPITALITY MANAGEMENT, L.P.
LISTED ON THE ATTACHED EXHIBIT A;
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AND
THE ORIGINAL SELLING PARTIES LISTED
ON THE ATTACHED EXHIBIT B.
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DATED AS OF APRIL 1, 2004
HOTEL LEASE TERMINATION AGREEMENT
THIS HOTEL LEASE TERMINATION AGREEMENT (the "Agreement") is made as of the
1st day of April, 2004 by and among Hersha Hospitality Trust, a Maryland real
estate investment trust ("HHT"); Hersha Hospitality Limited Partnership, a
Virginia limited partnership ("HHLP"); 44 New England Management Company, a
Virginia corporation ("44NEMC"); Hersha Hospitality Management, L.P., a
Pennsylvania limited partnership ("HHMLP"); the limited partners of HHMLP listed
on Exhibit A, attached hereto (the "Limited Partners of HHMLP") and the original
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selling parties listed on Exhibit B, attached hereto (the "Original Sellers").
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WITNESSETH
WHEREAS, HHLP is the operating limited partnership subsidiary of HHT; and
WHEREAS, 44NEMC is the taxable REIT subsidiary of HHLP; and
WHEREAS, HHLP owns, through seven wholly-owned subsidiary partnerships (the
"HHLP-Subs"), the hotel properties listed on Exhibit B, attached hereto
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(individually, a "Property" and, collectively, the "Properties"); and
WHEREAS, HHLP initially purchased the Properties pursuant to certain
purchase agreements listed on Exhibit C, attached hereto, (the "Purchase
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Agreements") between HHLP and the Original Sellers where such Purchase
Agreements provide for the purchase and certain purchase price adjustments of
each Hotel; and
WHEREAS, HHLP, the HHLP-Subs and HHMLP have entered into certain lease
agreements listed on Exhibit D, attached hereto, (individually, a "Lease" and,
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collectively, the "Leases") pursuant to which HHMLP currently leases each
Property, respectively, from HHLP; and
WHEREAS, having determined that it is in the best interest of the parties
hereto and subject to the terms and conditions set forth in this Agreement, (i)
HHLP, the HHLP-Subs and HHMLP desire to terminate the Leases, (ii) HHLP and
44NEMC desire to enter into lease agreements for each of the Properties pursuant
to which 44NEMC shall lease the Properties from HHLP; (iii) 44NEMC and HHMLP
desire to enter into management agreements for each of the Properties pursuant
to which HHMLP will manage the Properties; (iv) the Limited Partners of HHMLP
desire to fund the partners' deficit and (v) the Original Sellers, HHLP, the
HHLP-Subs and HHMLP desire to waive all purchase price adjustments in the
Purchase Agreements and any and all amendments or extensions of the purchase
price adjustments in any other agreement related to the Properties, each in
consideration of the acts and obligations of the other parties hereto pursuant
to the terms hereof.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Termination of Leases. Subject to the terms and conditions set forth
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herein, HHLP, the HHLP-Subs and HHMLP hereby agree that the Leases shall
terminate as of 12:01 a.m. on the date first set forth above (the "Termination
Date"). The termination of the Leases as provided in this Agreement shall be
with the same force and effect as if the Termination Date was the date set forth
in each Lease for the expiration of the term thereof, and from and after the
Termination Date neither HHLP, the HHLP-Subs nor HHMLP shall have any further
rights, duties, liabilities or obligations pursuant to the Leases except (a) the
obligation of HHMLP to pay to HHLP and the HHLP-Subs all moneys with respect to
the Properties accrued and unpaid through the Termination Date, and (b) any
rights, obligations and liabilities pursuant to the indemnification provisions
of the Leases which arise or accrue before the Termination Date.
2. Satisfaction of Outstanding Lease Obligations. As of and through the
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Termination Date, HHMLP shall have satisfied all of its obligations, duties and
responsibilities pursuant to the terms and provisions of the Leases,
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including but not limited to payment to HHLP and the HHLP-Subs of all moneys,
accrued and unpaid through the Termination Date.
3. Transfer of Contracts, License and Permits. To the extent necessary or
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as requested by HHLP, HHMLP shall use its good faith commercially reasonable
efforts to assign and transfer any third party contracts, agreements, licenses
or permits related to the Properties to HHLP or HHLP's assignee.
4. Surrender of Premises. HHMLP hereby agrees to surrender the Properties,
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and all alterations, additions and improvements therein, to HHLP and the
HHLP-Subs on the Termination Date in as good condition as they were in at the
commencement of the term of the Leases, ordinary wear and tear excepted, and, at
the request of HHLP, to remove all personal property and furniture of HHMLP's
located therein. At the request of HHLP, HHMLP shall deliver all keys to the
Properties to the HHLP on or before the Termination Date.
5. Releases. HHMLP hereby remises, releases and quitclaims unto HHLP and
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the HHLP-Subs all right, title and interest of HHMLP in and to the Properties
effective as of the Termination Date. Except as indicated in Section 1 herein,
HHLP, the HHLP-Subs and HHMLP hereby waive, release and discharge the other from
each and every past, current and future obligation, covenant, agreement,
stipulation, payment and other liability under the Leases or in any manner
connected therewith effective as of the Termination Date.
6. Lease Agreements. Immediately following the execution of this Agreement,
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HHLP shall take such actions as are necessary for the HHLP-Subs and 44NEMC to
enter into a lease agreements, substantially in the form attached hereto as
Exhibit E and effective as of the date hereof, for each of the Properties.
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7. Management Agreements. Immediately following the execution of this
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Agreement, 44NEMC and HHMLP shall enter into a hotel management agreement,
substantially in the form attached hereto as Exhibit F and effective as of the
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date hereof, for each of the Properties.
8. Funding of Partners' Deficit. In order to provide a more financially
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stable entity on which HHLP may rely upon to manage its current and future
properties, HHMLP and the Limited Partners of HHMLP agree to restore any and all
partners' deficit as of March 31, 2004 and reflected in the unaudited
consolidated balance sheets of HHT and subsidiaries as of such date.
9. Waiver of Purchase Price Adjustments. The Original Sellers, HHLP, the
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HHLP-Subs and HHMLP waive any and all purchase price adjustments in the Purchase
Agreements and any and all amendments or extensions of the purchase price
adjustments in any other agreement related to the Properties.
10. Representations and Warranties. As an inducement to the parties to
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enter into this Agreement and to consummate the transactions contemplated
herein; the parties represent and warrant the following:
(a) Each of HHT, HHLP, 44NEMC, HHMLP, the Limited Partners of HHMLP and the
Original Sellers hereby represents and warrants for themselves alone that
(i) it is duly organized, validly existing and in good standing under the
laws of their jurisdiction of incorporation, formation or organization,
respectively; (ii) it has full corporate, partnership or limited liability
company power and authority, as the case may be, to conduct all the
activities necessary to consummate the transactions contemplated hereby;
(iii) it has full corporate, partnership or limited liability company
power, as the case may be, to enter into this Agreement; and (iv) it has
duly and validly authorized, executed and delivered this Agreement, which
shall constitute a valid and binding agreement of each such entity
enforceable against it in accordance with the terms hereof.
(b) HHLP and HHMLP hereby represent and warrant that immediately prior to
the effectiveness of this Agreement, the Leases were binding obligations of
HHLP and HHMLP, enforceable against both HHLP and HHMLP in accordance with
the terms thereof.
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(c) 44NEMC hereby represents and warrants that it satisfies the
requirements of being a "taxable REIT subsidiary" as defined in the REIT
regulations of the Internal Revenue Code of 1982, as amended (the "Code").
(d) HHMLP and the Limited Partners of HHMLP represent and warrant that
HHMLP satisfies the requirements of an "eligible independent contractor" as
defined in the REIT regulations of the Code and is actively engaged in the
trade or business of operating hotels for persons who are not a related to
HHT or 44NEMC, HHT's taxable REIT subsidiary, and HHMLP will derive at
least 10% of both its revenue and profit from operating hotels for persons
other than HHT or 44NEMC.
11. Miscellaneous.
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(a) Amendment. Subject to applicable law, this Agreement may be
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amended, modified, or supplemented only by a written agreement signed by the
parties hereto.
(b) Assignment. No party shall have the right to assign this
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Agreement, without the prior written consent of the other parties. This
Agreement will be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns, and no other party will be
conferred any rights by virtue of this Agreement or be entitled to enforce any
of the provisions hereof.
(c) No Joint Venture. Nothing set forth in this Agreement shall be
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construed to create a joint venture between any of the parties hereto.
(d) Governing Law. This Agreement shall be governed by, and construed
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in accordance with, the laws of the Commonwealth of Virginia, without regard to
any otherwise applicable principles of conflicts of laws.
(e) Waiver. No waiver of any of the provisions of this Agreement shall
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be deemed, or shall constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver, nor shall a waiver
in any instance constitute a waiver in any subsequent instance. No waiver shall
be binding unless executed in writing by the party making the waiver.
(f) Entire Agreement. This Agreement and any other document to be
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furnished pursuant to the provisions hereof embody the entire agreement and
understanding of the parties hereto as to the subject matter contained herein.
There are no restrictions, promises, representations, warranties, covenants, or
undertakings other than those expressly set forth or referred to in such
documents. This Agreement and such documents supersede all prior agreements and
understandings among the parties with respect to the subject matter hereof.
(g) Severability. Any term or provision of this Agreement that is
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invalid or unenforceable in any jurisdiction will, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement, or affecting the validity or enforceability of any of the terms or
provisions of this Agreement.
(h) Fees and Expenses. Each party to this Agreement will be
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responsible for, and will pay, all of its own fees and expenses, including those
of its counsel and accountants, incurred in the negotiation, preparation, and
consummation of this Agreement and the transaction contemplated hereunder.
(i) Counterparts. This Agreement may be executed in two or more fully
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or partially executed counterparts, each of which will be deemed an original
binding the signer thereof against the other signing parties, but all
counterparts together will constitute one and the same instrument.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date and year first above written.
HERSHA HOSPITALITY TRUST,
a Maryland real estate investment trust
By: ___________________________________
Name: ___________________________________
Its: ___________________________________
HERSHA HOSPITALITY LIMITED PARTNERSHIP,
a Virginia limited partnership
By: Hersha Hospitality Trust, General Partner
By: ___________________________________
Name: ___________________________________
Its: ___________________________________
44 NEW ENGLAND MANAGEMENT COMPANY,
a Virginia corporation
By: ___________________________________
Name: ___________________________________
Its: ___________________________________
HERSHA HOSPITALITY MANAGEMENT, L.P.,
a Pennsylvania limited partnership
By: Hersha Hospitality Management Co., General Partner
By: ___________________________________
Name: ___________________________________
Its: ___________________________________
Signature Page 1 of Hotel Lease Termination Agreement
THE LIMITED PARTNERS OF
HERSHA HOSPITALITY MANAGEMENT, L.P.
Shree Associates
Shreeji Associates
By: ________________________________ By: ________________________________
Name: ________________________________ Name: ________________________________
Its: ________________________________ Its: ________________________________
Kunj Associates JSK II Associates
By: ________________________________ By: ________________________________
Name: ________________________________ Name: ________________________________
Its: ________________________________ Its: ________________________________
Devi Associates Neil H. Shah
By: ________________________________ By: ________________________________
Name: ________________________________ Name: ________________________________
Its: ________________________________ Its: ________________________________
Shanti Associates David L. Desfor
By: ________________________________ By: ________________________________
Name: ________________________________ Name: ________________________________
Its: ________________________________ Its: ________________________________
Signature Page 2 of Hotel Lease Termination Agreement
ORIGINAL SELLERS
5244 ASSOCIATES, 2844 ASSOCIATES,
a Pennsylvania limited partnership a Pennsylvania limited partnership
By: Shreenathji Enterprises, Ltd., General Partner By: Shreenathji Enterprises, Ltd., General Partner
By: ________________________________ By: ________________________________
Name: ________________________________ Name: ________________________________
Its: ________________________________ Its: ________________________________
3044 ASSOCIATES, 3144 ASSOCIATES,
a Pennsylvania limited partnership a Pennsylvania limited partnership
By: Shreenathji Enterprises, Ltd., General Partner By: Shreenathji Enterprises, Ltd., General Partner
By: ________________________________ By: ________________________________
Name: ________________________________ Name: ________________________________
Its: ________________________________ Its: ________________________________
3244 ASSOCIATES, 5544 ASSOCIATES,
a Pennsylvania limited partnership a Pennsylvania limited partnership
By: Shreenathji Enterprises, Ltd., General Partner By: Shreenathji Enterprises, Ltd., General Partner
By: ________________________________ By: ________________________________
Name: ________________________________ Name: ________________________________
Its: ________________________________ Its: ________________________________
3544 ASSOCIATES,
a Pennsylvania limited partnership
By: Shreenathji Enterprises, Ltd., General Partner
By: ________________________________
Name: ________________________________
Its: ________________________________
Signature Page 3 of Hotel Lease Termination Agreement