Document:

ex10_2.htm

Exhibit 10.2

 

EXECUTION VERSION

INVESTOR RIGHTS AND OPTION AGREEMENT

This Investor Rights and Option Agreement (this “Agreement”) is entered into as of August 4, 2009, by and among Real Estate Investment Group L.P., a Bermuda limited partnership, whose general partner and majority limited partner is Tyrus S.A., a Uruguayan sociedad
anónima wholly-owned by IRSA Inversiones y Representaciones Sociedad Anónima, an Argentine sociedad anónima (the “Investor”), IRSA Inversiones y Representaciones Sociedad Anónima, an Argentine sociedad anónima (“IRSA”) (solely for purposes of Section 10(e) hereof) and Hersha
Hospitality Trust, a Maryland real estate investment trust (the “Company”).

WHEREAS, on or about the date hereof, the Investor is purchasing from the Company 5,700,000 shares (the “Primary Shares”) of the Company’s Priority Class A common shares of beneficial interest, par value $0.01 per share, which are validly issued, fully paid
and non assessable and free of any preemptive rights, rights of first refusal or other or similar rights, subject to the Transaction Documents (“Common Shares”), pursuant that certain Purchase Agreement (the “Purchase Agreement”), dated as of August 4, 2009, by and among the Investor, IRSA, the Company and Hersha Hospitality Limited Partnership, L.P., a Virginia
limited partnership (the “Operating Partnership”);

WHEREAS, in connection with the purchase of the Primary Shares pursuant to the Purchase Agreement, the Parties desire to enter into this Agreement and the Trustee Designation Agreement (as defined below) to provide Investor with certain additional rights and obligations and to promote the interests of the Company by establishing herein
certain terms and conditions upon which the Primary Shares and the Option Shares (as defined below) will be held and/or transferred, and to provide for certain other matters as set forth herein; and

WHEREAS, in connection with the Purchase Agreement and this Agreement the  Company, the Investor and IRSA have entered  into a registration rights agreement (the “Registration Rights Agreement”).

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements set forth herein, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Parties hereto, intending to be legally bound, hereby agree as follows:

1.              Option to Purchase.

(a)            Purchase Option.  At any time and from time to time after the Closing Date and prior to the five year anniversary of the Closing Date (the “Expiration
Date”), Investor shall have the option to purchase (the “Purchase Option”), and the Company shall be obligated to issue to Investor, up to 5,700,000 Common Shares (the “Option Shares”) at an exercise price of $3.00 per share (the “Option Price”), subject to adjustment pursuant
to Section 1(e), Section 1(f), Section 1(g) and Section 1(h) below.

(b)            Purchase Option Mechanics.  At any time after the Closing Date and on or before the Expiration Date, Investor, in accordance with the terms hereof, may exercise the Purchase Option, in whole or
in part, by delivering to the Company (i) written notice of the election to purchase the Option Shares in the form attached hereto as Exhibit A (the “Election to Purchase”), duly executed, to the Company during normal business hours on any Business Day and (ii) an investment letter (the “Investment Letter”)
in such form as reasonably required by the Company for purposes of complying with applicable securities laws and the Code, which letter shall contain representations and warranties substantially similar to those contained in Section 5 hereof.  If the Expiration Date is not a Business Day, then the Option may be exercised on the next succeeding Business Day.

  

  

  

(c)            Issuance of Option Shares.  No later than five Business Days after receipt by the Company of the Election to Purchase as described in Section
1(b) and upon payment in full of the aggregate purchase price as set forth therein, the Company shall issue and cause to be delivered to the Investor a certificate or certificates (or the electronic equivalent thereof) representing the number of fully paid and non-assessable Common Shares for which the option described in Section 1(a) is being exercised, in whole or in part, by the Investor.

(d)            Reservation of Authorized Shares.  The Company has, and shall continue at all times to reserve and keep available out of the aggregate of its authorized but unissued Common Shares, free and clear
of all preemptive rights, such number of duly authorized Common Shares as shall be sufficient to enable the Company at any time to fulfill all of its obligations pursuant to the Purchase Option.

(e)            Adjustment for Splits and Combinations.  If the Company shall, at any time or from time to time after the date of this Agreement, effect a split, reverse split, share dividend, subdivision or
combination of the outstanding Common Shares, the Option Price in effect immediately before that split, reverse split, share dividend, subdivision or combination shall be proportionately adjusted and the number of Common Shares issuable upon exercise of the Purchase Option shall be adjusted to equal the aggregate number of Common Shares that a record holder of the same number of Common Shares issuable upon exercise of the Purchase Option would own or be entitled to receive after such split, reverse split, share
dividend, subdivision or combination.  Any adjustment under this Section 1(e) shall become effective at the close of business on the date the split, reverse split, share dividend, subdivision or combination becomes effective.

(f)            Adjustment for Reclassification, Exchange and Substitution.  If, at any time or from time to time after the date of this Agreement, the Common Shares are changed into the same or a different number
of shares of any class or classes of shares, whether by recapitalization, reclassification or otherwise (other than a split, reverse split, share dividend, subdivision or combination provided for in Section 1(e) above), the Investor shall have the right thereafter to receive upon exercise of the Purchase Option the kind and amount of shares and other securities and property receivable upon such recapitalization, reclassification or other change
by holders of the maximum number Common Shares issuable upon exercise of the Purchase Option immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof.

(g)            Reorganizations, Mergers, Consolidations or Sales of Assets.  If, at any time or from time to time after the date of this Agreement, there is a capital reorganization of the Common Shares (other
than (i) an acquisition of a majority of the shares of beneficial interest in the Company by another entity by means of any transaction or series of related transactions, including, without limitation, any reorganization, merger or consolidation, statutory share exchange, self tender offer for all or substantially all Common Shares, sale of all or substantially all of the Company’s assets or recapitalization of the Common Shares but excluding any merger effected exclusively for the purpose of changing the
domicile of the Company, in which outstanding Common Shares are exchanged for securities or other consideration issued, or caused to be issued by the acquiring entity or its subsidiary (an “Acquisition”), or (ii) a sale, lease, exchange or other transfer (in one transaction or a series of transactions) of all or substantially all of the assets of the Company (an “Asset Transfer”),
or (iii) a recapitalization, subdivision, combination, reclassification, exchange or substitution of shares provided for elsewhere in this Section 1), then as a part of such capital reorganization, provision shall be made so that the holders of the Purchase Option shall thereafter be entitled to receive upon the exercise of the Purchase Option the number of shares or other securities or property of the Company to which a holder of the number of
Common Shares issuable upon exercise of the Purchase Option would have been entitled on such capital reorganization, subject to adjustment in respect of such shares or securities by the terms thereof.   In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 1 with respect to the rights of the holders of the Purchase Option after the capital reorganization such that the provisions
of this Section 1 (including adjustment of the Option Price then in effect and the number of shares issuable upon exercise of the Purchase Option) shall be applicable after that event and be as nearly equivalent as practicable.

  

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(h)            Other Adjustment Resulting from Actions Affecting Common Shares.  In case at any time or from time to time after the date of this Agreement the Company takes any action in respect of the Common
Shares other than those described in Section 1(e), 1(f) or 1(g), then the Option Price and the number of Common Shares issuable upon exercise of the Purchase Option shall be adjusted in such manner as may be equitable under the circumstances.

(i)             Certificate of Adjustment.  In case of an adjustment or readjustment of the Option Price or the number of Common Shares or other securities issuable upon exercise of the Purchase Option,
the Company, at its expense, shall compute such adjustment or readjustment in accordance with the provisions hereof and prepare a certificate showing such adjustment or readjustment, and shall mail such certificate, by first class mail, postage prepaid, to the Investor.  The certificate shall set forth such adjustment or readjustment, showing in detail the facts upon which such adjustment or readjustment is based.

(j)             Minimum Adjustment.  Notwithstanding anything herein to the contrary, no adjustment of the Option Price shall be made pursuant to this Section
1 in an amount less than $.01 per share, and any such lesser adjustment shall be carried forward and shall be made at the time and together with the next subsequent adjustment which together with any adjustments so carried forward shall amount to $.01 per share or more.

(k)            Notices of Record Date.  Upon (i) any taking by the Company of a record of the holders of Common Shares for the purpose of determining the holders thereof who are entitled to receive any dividend
or other distribution (other than the Company’s normal quarterly cash dividend), or (ii) any Acquisition or other capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company, any merger or consolidation of the Company with or into any other entity, or any Asset Transfer, or any voluntary or involuntary dissolution, liquidation or winding up of the Company, the Company shall mail to the Investor at least ten (10) days prior to the record date specified
therein a notice specifying (A) the date on which any such record is to be taken for the purpose of such dividend or distribution and a description of such dividend or distribution, (B) the date on which any such Acquisition, reorganization, reclassification, transfer, consolidation, merger, Asset Transfer, dissolution, liquidation or winding up is expected to become effective, and (C) the date, if any, that is to be fixed as to when the holders of record of Common Shares (or other securities) shall be entitled
to exchange their Common Shares (or other securities) for securities or other property deliverable upon such Acquisition, reorganization, reclassification, transfer, consolidation, merger, Asset Transfer, dissolution, liquidation or winding up.

  

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(l)             Fractional Shares.  No fractional Common Shares shall be issued upon exercise of the Purchase Option.  All Common Shares (including fractions thereof) issuable upon exercise of
the Purchase Option shall be aggregated for purposes of determining whether the conversion would result in the issuance of any fractional share.  If, after the aforementioned aggregation, the exercise would result in the issuance of any fractional share, the Company shall, in lieu of issuing any fractional shares, pay cash equal to the product of such fraction multiplied by the fair market value per Common Share on the date of the Option is exercised (as reported by the NYSE or any other national securities
exchange on which the Common Shares are then listed for trading, or if none, the most recently reported “over the counter” trade price or if none, as determined in good faith by the Board of Trustees).

(m)           Legend.  The Investor agrees that all certificates or other instruments representing the Option Shares will bear a legend substantially to the following effect:

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER AND OTHER RESTRICTIONS SET FORTH IN AN INVESTOR RIGHTS AND OPTION AGREEMENT, DATED AS OF AUGUST 4, 2009, COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF THE COMPANY.

2.              Company Call Option.

(a)            Call Option.  If at any time after August 4, 2011, the closing price for the Company’s Common Shares on the New York Stock Exchange (“NYSE”)
exceeds $5.00 for twenty (20) consecutive trading days, the Company shall have the right, exercisable at any time thereafter in accordance with this Section 2, to call in and cancel the Purchase Option (the “Call Option”) in exchange for the issuance of Common Shares (the “Call Shares”) with an
aggregate value (the “Call Value”), as of the date of exercise of the Call Option, equal to (i) the volume weighted average price (the “VWAP”) per Common Share for the twenty trading days prior to the exercise of the Call Option, less (ii) the then current Option Price per share, multiplied by (iii) the number of Common Shares remaining under the Purchase Option
(the “Call Price”).  For example, if (i) the VWAP per Common Share were $6.00, and (ii) the then current Option Price per share was $3.00, and (iii) the number of Common Shares remaining under the Purchase Option was 4,000,000, then (X) the Call Value would be $12,000,000, and (Y) the total number of Common Shares to be issued in satisfaction of the Call Option would be 2,000,000 Common Shares.

  

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(b)            Call Option Mechanics.  At any time after the Call Option is exercisable pursuant to Section 2(a) above, the Company, in accordance
with the terms hereof, may exercise the Call Option, in whole but not in part by delivering to the Investor written notice of the election to cancel the Purchase Option (the “Call Notice”), duly executed by the Company, setting forth (1) the date on which the Call Shares shall be issued (the “Call Date”), which shall be no later than 30 days after the delivery
of such notice, and (2) calculations showing the satisfaction of the condition to exercise of the Call Option in Section 2(a), the VWAP contemplated by Section 2(a), the Call Amount and the Call Shares.

(c)            Issuance of Call Shares.  On the Call Date, the Company shall issue and cause to be delivered to the Investor a certificate or certificates (or the electronic equivalent thereof) representing
the Call Shares.

(d)            Continuing Right to Exercise.  At any time after the Call Notice but prior to the Call Date, Investor shall continue to have the right to exercise the Purchase Option in full in accordance with Section
1 hereof.  Upon exercise of the Purchase Option, the Option Shares shall be privately issued to the Investor.

3.              Board of Trustees.  The Investor will be entitled to all of the rights as set forth under that certain Trustee Designation Agreement dated August 4, 2009, between the Company and the
Investor (the “Trustee Designation Agreement”), in the form attached hereto as Exhibit B.

4.              Confidentiality.  Each party to this Agreement will hold, and will cause its respective subsidiaries and their trustees, directors, officers, employees, agents, consultants and advisors
to hold, in strict confidence, unless disclosure to a regulatory authority is necessary or desirable in connection with any necessary regulatory approval or unless compelled to disclose by judicial or administrative process or, in the opinion of its counsel, by other requirement of law or the applicable requirements of any regulatory agency or relevant stock exchange, all non-public records, books, contracts, instruments, computer data and other data and information (collectively, “Information”)
concerning the other Party furnished to it by such other Party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (1) previously known by such Party on a non-confidential basis, (2) in the public domain through no fault of such Party or (3) later lawfully acquired from other sources by the Party to which it was furnished), and neither Party shall release or disclose such Information to any other person, except its auditors, attorneys, financial
advisors, other consultants and advisors and, to the extent permitted above, to insurance regulatory authorities.

  

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5.              Compliance with U.S. Laws.

(a)            The Investor hereby represents and warrants to the Company that it: (i) is an “accredited investor” within the meaning of Rule 501 of Regulation D under the U.S. Securities Act of 1933, as amended (the “Securities
Act”); (2) has sufficient knowledge and experience in business, financial and investment matters so as to be able to evaluate the risks and merits of its investment in the Company and it is able financially to bear the risks thereof; (3) has had access to such information regarding the Company and its affairs as is necessary to enable it to evaluate the merits and risks of an investment in restricted securities of the Company and has had a reasonable opportunity to ask questions and receive answers
and documents concerning the Company and its current and proposed properties, operations, financial condition, business, business plans and prospects; (4) has not been offered the Purchase Option or any other securities contemplated herein by any means of general solicitation or advertising; (5) the Purchase Option and the Option Shares will be acquired by it for its account for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof; (6) the Investor understands
and acknowledges that none of the offer, issuance or sale of the Purchase Option or the Option Shares has been registered under the Securities Act in reliance on an exemption from the registration requirements of the Securities Act; (7) the Investor understands and acknowledges that such securities may be subject to additional restrictions on transfer under state and/or federal securities laws.  The Investor acknowledges that such securities may not be sold or otherwise disposed of except pursuant to
an effective registration statement under the Securities Act and applicable state securities laws or pursuant to an applicable exemption from the registration requirements of the Securities Act and such state securities laws, based upon which certain undertakings have been granted by the Company in accordance with the Registration Rights Agreement.

(b)            In connection with this Agreement and the Transaction Documents, the Investor hereby agrees to comply with:  (i) the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) and the rules and regulations of the Securities and Exchange Commission (the “Commission”) promulgated under each of the Securities Act and the Exchange Act, including, without limitation, filing any reports with the Commission pursuant to the Section 13(d) of the Exchange Act, Regulation 13D under the Exchange Act, Section 16(a) of the Exchange Act and the rules and regulations of the Commission promulgated under
Section 16(a) of the Exchange Act; (ii) applicable securities laws of any state, including Blue Sky laws, or any foreign jurisdiction; (iii) the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, if applicable; (iv) the Internal Revenue Code of 1986, as amended (the “Code”); and (v) applicable NYSE rules and regulations.

(c)            In connection with this Agreement and the Transaction Documents, except to he extent otherwise provided herein or therein, the Investor hereby agrees to comply with Article VII of the Declaration of Trust and to make a reasonable effort to ensure that any permitted transferee
or assignee under this Agreement agrees in writing for the benefit of the Company to be bound by the terms of this Section 5(c).

  

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6.              Standstill.

(a)            General Standstill.  The Investor hereby agrees that it shall not, and shall cause its Affiliates not to, directly or indirectly, unless specifically authorized in writing in advance by the Board
of Trustees, for so long as Investor owns the 10% Qualifying Ownership Interest or has appointed a member of the Company’s Board of Trustees:

	
  
	
(i)
	
acquire, agree to acquire, or propose to acquire, in any manner, directly or indirectly through an Affiliate, “beneficial ownership” (as determined pursuant to Rule 13d-3 under the Securities Act) or control of:

	
  
	
(A)
	
any securities of the Company or the Operating Partnership (or options, rights or warrants or other commitments to purchase or securities convertible into (or exchangeable or redeemable for) Common Shares) as a result of which, after giving effect to such purchase or acquisitions, Investor and its Affiliates will Beneficially Own more than 24% of the outstanding Common Shares;

	
  
	
(B)
	
any subsidiary or any assets or properties of the Company or any subsidiary or division thereof;

	
  
	
(ii)
	
initiate, make or participate in any “solicitation” of “proxies” or become a “participant” in any “election contest” (as such terms are used in the current and any future proxy rules of the Commission, but (1) disregarding clause (iv) of Rule 14a-1(l)(2) under the Exchange Act and (2) including any exempt solicitation pursuant to Rule 14a-2(b)(1) under the Exchange
Act) with respect to the Company; provided the foregoing shall not be deemed to prohibit (a) Investor from voting (or casting a written consent solicited by the Company) regarding its Common Shares in the manner it deems appropriate, or (b) Investor’s representative on the Board of Trustees from participating in board deliberations, subject to compliance with the Company’s governing documents;

	
  
	
(iii)
	
call, or in any way encourage or participate in a call for, any special meeting of shareholders of the Company (or take any action with respect to acting by written consent of the shareholders of the Company); request, or take any action to obtain or retain any list of holders of any securities of the Company; or initiate or propose any shareholder proposal (including, without limitation, any proposal to amend the
Company’s Declaration of Trust or Bylaws) or participate in or encourage the making of, or solicit shareholders of the Company for the approval of, one or more shareholder proposals;

	
  
	
(iv)
	
seek to encourage any third person to vote Common Shares or the securities of the Company in opposition to a recommendation of a majority of the Board of Trustees, notwithstanding the fact the Investor may vote their shares in such opposition;

  

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(v)
	
seek representation on the Board of Trustees or a change in the composition or size of the Board of Trustees other than as expressly permitted by the Trustee Designation Agreement;

	
  
	
(vi)
	
form, join or act in concert with any other person with respect to a “group” (as defined in Section 13(d)(3) of the Exchange Act) relating to the Company other than a group existing as of the date of this Agreement of Investor, IRSA and the investors in Investor as of the date hereof;

	
  
	
(vii)
	
assist or encourage any attempt by any other person to do any of the foregoing;

	
  
	
(viii)
	
disclose any intention, plan or arrangement inconsistent with the provisions of this Section 6; or

	
  
	
(ix)
	
request the Company or any of its trustees, officers, employees or agents to amend or waive any provisions of this Section 6(a) or Article VII of the Charter (except as provided pursuant to the Excepted Holder Agreement) or seek to challenge the legality or effect thereof.

The provisions of this Section 6 are referred to in this Agreement, collectively, as “Restricted Activities.”  Notwithstanding the foregoing, nothing in this Section
6 shall prohibit the Investor or their Affiliates from making a proposal to acquire any Company or Operating Partnership asset or property for which the Company or the Operating Partnership publicly announces an intention to sell or for which the Company or the Operating Partnership actively solicits acquisition proposals from third parties.

(b)            Investment Company Matters.  The Investor shall use its commercially reasonable best efforts to not be or become an “investment company” or an entity “controlled” by an
“investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.

7.              Preemptive Rights.

(a)            Sale of New Securities.  As long as the Investor owns the 5% Qualifying Ownership Interest (before giving effect to any issuances triggering this Section
7), if at any time after the Closing, the Company at any time or from time to time makes any public or non-public offering of any equity securities (including Common Shares or preferred shares, options or debt that is convertible or exchangeable into equity securities or that include an equity component, such as an “equity” kicker, including any hybrid security) (any such security, a “New Security”) for cash (and,
for the avoidance of doubt, other than (1) pursuant to the granting or exercise of employee stock options, restricted shares or other share incentives pursuant to the Company’s stock incentive plans or the issuance of stock pursuant to the Company’s employee stock purchase plan, in each case in the ordinary course of equity compensation awards, or (2) issuances for the purposes of consideration in acquisition transactions), the Investor shall be afforded the opportunity to acquire from the Company
for the same price and on the same terms as such securities are proposed to be offered to others, up to the amount of New Securities in the aggregate required to enable it to maintain its proportionate Common Share-equivalent interest in the Company.  The amount of New Securities that the Investor shall be entitled to purchase in the aggregate shall be determined by multiplying (x) the total number of such offered shares of New Securities by (y) a fraction, the numerator of which is the number of Common
Shares held by the Investor, and the denominator of which is the number of Common Shares then outstanding.

  

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(b)            Notice.  In the event the Company proposes to offer New Securities, it shall give the Investor written notice of its intention, describing the price (or range of prices), anticipated amount of
securities, timing and other terms upon which the Company proposes to offer the same, no later than ten Business Days prior to the commencement of such offer or sale, as the case may be, or five Business Days prior the commencement of such offer in the case of an underwritten public offering of Common Shares or Preferred Shares on an “overnight” or equivalent expedited offering (an “Expedited Offering”).  The Investor
shall have seven (7) Business Days (three (3) Business Days in the case of an Expedited Offering) from the date of receipt of such a notice to notify the Company in writing that it intends to exercise such purchase rights and as to the amount of New Securities the Investor desires to purchase.  Such notice shall constitute a non-binding indication of interest of the Investor to purchase the amount of New Securities so specified at the price and other terms set forth in the Company’s notice to
it.  The failure of the Investor to respond within such seven (7) Business Day period (or three (3) Business Day period in the case of an Expedited Offering) period shall be deemed to be a waiver of the Investor’s rights under this Section 7 only with respect to the offering described in the applicable notice.

(c)            Purchase Mechanism.  If the Investor exercises its gross-up purchase rights provided in this Section 7, the closing of the purchase
of the New Securities with respect to which such right has been exercised shall take place (a) in the case of any public offering, simultaneously with the closing of such offering to other purchasers, or (b) in the case of any private offering, upon the later to occur of the closing of such offering and thirty (30) calendar days after the giving of notice of such offering.  Each of the Company and the Investor agrees to use its commercially reasonable efforts to secure any regulatory or other consents
or shareholder approval, and to comply with any law or regulation necessary in connection with the offer, sale and purchase of, such New Securities.

(d)            Failure of Purchase.  In the event the Investor fails to exercise its gross-up purchase rights provided in this Section 7 within
the prescribed period or, if so exercised, the Investor is unable to consummate such purchase within the time period specified in Section 7(c) above, the Company shall thereafter be entitled during the period of ninety (90) days following the conclusion of the applicable period to sell or enter into an agreement (pursuant to which the sale of the New Securities covered thereby shall be consummated, if at all, within thirty (30) days from the date
of said agreement) to sell the New Securities not elected to be purchased pursuant to this Section 7 or that the Investor is unable to purchase because of such failure to obtain any such consent or approval, at a price and upon terms no more favorable to the purchasers of such securities than were specified in the Company’s notice to the Investor.  Notwithstanding the foregoing, if such sale is subject to the receipt of any regulatory
or other consents, shareholder approval or the expiration of any waiting period, the time period during which such sale may be consummated shall be extended until the expiration of five Business Days after all such approvals or consents have been obtained or waiting periods expired, but in no event shall such time period exceed 180 days from the date of the applicable agreement with respect to such sale.  In the event the Company has not sold the New Securities or entered into an agreement to sell the
New Securities within said 90-day period (or sold and issued New Securities in accordance with the foregoing within thirty (30) days from the date of said agreement (as such period may be extended in the manner described above for a period not to exceed 180 days from the date of said agreement), the Company shall not thereafter offer, issue or sell such New Securities without first offering such securities to the Investor in the manner provided above.

  

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(e)            Cooperation.  The Company and the Investor shall cooperate in good faith to facilitate the exercise of the Investor’s rights hereunder, including securing any required approvals or consents.

8.              Investor Participation.  The Company will afford the Investor the power to participate in the Company’s financial and operating policy decisions, to the extent provided in the
Transaction Documents or as otherwise agreed by the Board of Trustees.  Pursuant to and in accordance with the Transaction Documents, the Company shall furnish the Investor with such financial and operating data and other information with respect to the business, finance and properties of the Company as the Company prepares and compiles for members of its Board of Trustees in the ordinary course.

9.              Termination.  This Agreement, and the respective rights and obligations of the Parties other than rights and obligations under Section
1, Section 2, Section 4, Section 5 and Section 10 hereof, shall terminate upon the earlier of (i) Investor ceasing to own the 5% Qualifying Ownership Interest, and (ii) the execution of a written agreement of the Parties to terminate this Agreement.

10.            Miscellaneous.

(a)            Amendment.  No amendment or waiver of any provision of this Agreement will be effective with respect to any party unless made in writing and signed by an officer of a duly authorized representative
of such party.

(b)            Waivers.  The conditions to each party’s obligations in the Agreement are for the sole benefit of such party and may be waived by such party in whole or in part to the extent permitted by
applicable law.  No waiver of any party to this Agreement will be effective unless it is in a writing signed by a duly authorized officer of the waiving party that makes express reference to the provision or provisions subject to such waiver.

(c)            Counterparts and Facsimile.  For the convenience of the parties hereto, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts will together constitute the same agreement.  Executed signature pages to this Agreement may be delivered by facsimile and such facsimiles will be deemed as sufficient as if actual signature pages had been delivered.

  

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(d)            Governing Law.  This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such State.  The
parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the state and federal courts located in the State of New York for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby.

(e)            IRSA Guarantee.  IRSA is a party to this Agreement solely for purposes of guaranteeing the obligations of the Investor and shall be liable to the Company, to the same extent as the Investor, for
the obligations of the Investor hereunder.

(f)             Notices.  All notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be in writing, unless otherwise
specified in this Agreement, and if sent to the Investor, shall be delivered to Investor at Real Estate Investment Group L.P., c/o IRSA Inversiones y Representaciones S.A., Moreno 877, C1091AAQ, Buenos Aires, Argentina, fax no. +54 (11) 4323-7449, Attention:  Eduardo S. Elsztain, with copies to and Zang, Bergel & Vines Abogados, Florida 537, 18th Floor, C1005AAK, Buenos Aires, Argentina, fax no. +54 (11) 5166-7070, Attention:  Pablo
Vergara del Carril; or if sent to the Company or the Operating Partnership, shall be delivered to Hersha Hospitality Trust, 510 Walnut Street, 9th Floor, Philadelphia, Pennsylvania 19106 fax no. (717) 774-7383 Attention:  Ashish R. Parikh, with a copy to Hunton & Williams LLP, 951 East Byrd Street, Richmond, Virginia 23219, fax no. (804) 788-8218, Attention:  James S. Seevers, Jr.  Each party to this
Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose.

(g)            Confidentiality.  For the avoidance of doubt, the confidentiality agreement, dated as of July 3, 2009, by and between the Company and the Investor shall continue in full force and effect notwithstanding
this Agreement.

(h)            Captions.  The section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect
any of the provisions hereof.

(i)             No Third Party Beneficiaries.  Nothing contained in this Agreement, expressed or implied, is intended to confer upon any person or entity other than the Parties hereto, any benefit
right or remedies.

(j)             Time of Essence.  Time is of the essence in the performance of each and every term of this Agreement.

(k)            Public Announcements.  Subject to each Party’s disclosure obligations imposed by law or regulation, each of the parties hereto will cooperate with each other in the development and distribution
of all news releases and other public information disclosures with respect to this Agreement and any of the transactions contemplated by this Agreement or the other Transaction Documents (as defined in the Purchase Agreement), and no Party hereto will make any such news release or public disclosure without first consulting with the other Party hereto and receiving its consent (which shall not be unreasonably withheld or delayed) and each Party shall coordinate with the other with respect to any such news release
or public disclosure.

  

11

  

(l)             Successors, Assigns and Transferees.  This Agreement and the rights and obligations hereunder shall
be binding upon and inure to the benefit of the Parties and their respective legal representatives, heirs, legatees, successors, and assigns and any other transferee.

(m)           Assignment.  Except as otherwise provided in this Section 10(m), this Agreement and the rights and obligations hereunder may not
be assigned without the prior written consent of the Parties hereto and any purported or attempted assignment or other transfer of rights or obligations under this Agreement without such consent shall be void and of no force or effect.

	 	
(i) 
	
Notwithstanding any provision in this Agreement to the contrary, any time after the Closing Date and on or before the Expiration Date, the Investor may, in its sole discretion, assign the Purchase Option in whole or in part to any assignee that agrees in writing for the benefit of the Company to be bound by the terms of Sections
1, 2, 4, 5 and 10 of this Agreement, it being expressly understood that any such assignee will have no rights and benefits under Sections 3, 7 or 8 of
this Agreement, and no restrictions pursuant to Section 6 hereof; provided that such assignment complies with all applicable laws, including but not limited to, securities laws, rules and regulations, NYSE rules and the Company’s Declaration of Trust.

	 	
(ii) 
	
Notwithstanding any provision in this Agreement to the contrary, in the event that the Investor is not permitted under applicable law or regulation to exercise any of its rights to purchase New Securities under Section 7 of this Agreement, the Investor may, in its sole discretion,
assign such rights under Section 7 to any of its Affiliates that agrees in writing for the benefit of the Company to be bound by the terms of this Agreement.

(n)            Expenses; Attorney’s Fees.  Each party will be solely responsible for its fees and expenses in connection with the transactions contemplated herein, including the fees and expenses of their
respective attorneys, accountants, investment bankers and consultants.  In any action or proceeding brought to enforce any provision of this Agreement, the successful Party shall be entitled to recover reasonable attorney’s fees and expenses in addition to any other available remedy.

(o)            Recapitalization or Exchange Affecting the Company’s Capital Stock.  The provisions of this Agreement shall apply in accordance with its terms with respect to all of the shares of beneficial
interest of the Company or any successor thereto (including by merger or consolidation) or that may be issued in respect of, in exchange for, or in substitution of such shares, as applicable, and shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations, and the like occurring after the date hereof.

(p)            Severability.  In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal, or unenforceable in any respect
for any reason, the validity, legality, and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be in any way impaired thereby.

  

12

  

(q)            Tax Withholding.  The Company shall be entitled to require payment in cash or deduction from other compensation payable to the Investor of any sums required by federal, state, or local tax law
to be withheld with respect to the issuance, vesting, exercise, repurchase, or cancellation of the Purchase Option or any Option Shares.

(r)             Entire Agreement.  This Agreement (including the Exhibits hereto) and the Transaction Documents constitute the entire agreement, and supersede all other prior agreements, understandings,
representations and warranties, both written and oral, between the parties, with respect to the subject matter hereof.

11.            Definitions.  Capitalized terms used but not defined in this Agreement or this Section 11 shall have the meanings ascribed to such
terms in the Purchase Agreement.

(a)            “Acquisition” has the meaning ascribed to such term in Section 1(g).

(b)            “Affiliate” means, with respect to any person, any person directly or indirectly controlling, controlled by or under common control with, such other person.  For purposes of this definition,
“control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) when used with respect to any person, means the possession, directly or indirectly, of the power to cause the direction of management or policies of such person, whether through the ownership of voting securities by contract or otherwise.

(c)            “Agreement” has the meaning ascribed such term in the preamble.

(d)            “Asset Transfer” has the meaning ascribed to such term in Section 1(g).

(e)            “Board of Trustees” means the Board of Trustees of the Company.

(f)             “Beneficially Own,” “Beneficially Owned” or “Beneficial
Ownership” means with respect to any securities, having beneficial ownership of such securities (as determined pursuant to Rule 13d-3 under the Exchange Act.

(g)            “Business Day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York generally are authorized or required
by law or other governmental actions to close.

(h)            “Call Date” has the meaning ascribed to such term in Section 2(b).

(i)             “Call Notice” has the meaning ascribed to such term in Section 2(b).

(j)             “Call Option” has the meaning ascribed to such term in Section 2(a).

(k)            “Call Price” has the meaning ascribed to such term in Section 2(a).

(l)             “Call Shares” has the meaning ascribed to such term in Section 2(a).

  

13

  

(m)           “Call Value” has the meaning ascribed to such term in Section 2(a).

(n)            “Closing Date” shall be August 4, 2009.

(o)            “Code” has the meaning ascribed to such term in Section 5(b).

(p)            “Commission” has the meaning ascribed to such term in Section 5(a).

(q)            “Common Shares” has the meaning ascribed to such term in the recitals.

(r)             “Company” has the meaning ascribed to such term in the preamble.

(s)            “Declaration of Trust” means the Amended and Restated Declaration of Trust of the Company (as amended and supplemented from time to time).

(t)             “Election to Purchase” has the meaning ascribed to such term in Section 1(b).

(u)            “Elsztain” means Mr. Eduardo S. Elsztain.

(v)            “Exchange Act” has the meaning ascribed to such term in Section 5(b).

(w)           “Expedited Offering” has the meaning ascribed to such term in Section 7(b).

(x)            “Expiration Date” has the meaning ascribed to such term in Section 1(a).

(y)            “Information” has the meaning ascribed to such term in Section 4.

(z)            “Investment Letter” has the meaning ascribed to such term in Section 1(b).

(aa)          “Investor” has the meaning ascribed to such term the preamble.

(bb)         “New Security” has the meaning ascribed to such term in Section 7(a).

(cc)          “NYSE” has the meaning ascribed to such term in Section 2(a).

(dd)          “Operating Partnership” has the meaning ascribed to such term in the recitals.

(ee)          “Option Price” has the meaning ascribed to such term in Section 1(a).

(ff)            “Option Shares” has the meaning ascribed to such term in Section 1(a).

(gg)          “Party” means any of the parties to this Agreement, as set forth in the preamble.

(hh)          “Person” has the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.

(ii)            “Primary Shares” has the meaning ascribed to such term in the recitals.

(jj)            “Purchase Agreement” has the meaning ascribed to such term in the recitals.

  

14

  

(kk)          “Purchase Option” has the meaning ascribed to such term in Section 1(a).

(ll)            “5% Qualifying Ownership Interest” means Beneficial Ownership by the Investor or any of its Affiliates of at least 5% of the Common Shares (excluding solely for purposes of this definition
any Common Shares issued after the date hereof upon redemption of Operating Partnership units held at any time at or prior to such redemption by trustees or officers of the Company or the entities they control or of which they Beneficially Own 100% of the outstanding equity securities).

(mm)        “10% Qualifying Ownership Interest” means Beneficial Ownership by the Investor or any of its Affiliates of at least 10% of the Common Shares (excluding solely for purposes of this definition any Common Shares
issued after the date hereof upon redemption of Operating Partnership units held at any time at or prior to such redemption by trustees or officers of the Company or the entities they control or of which they Beneficially Own 100% of the outstanding equity securities).

(nn)          “Securities Act” has the meaning ascribed to such term in Section 5(a).

(oo)          “Subsidiary” means those corporations, banks, savings banks, associations and other persons of which such person owns or controls 51% or more of the outstanding equity securities either directly or
through an unbroken chain of entities as to each of which 51% or more of the outstanding equity securities is owned directly or indirectly by its parent.

(pp)          “Transaction Documents” has the meaning ascribed to such term in the Purchase Agreement.

(qq)          “Trustee Designation Agreement” means the trustee designation agreement in the form attached hereto as Exhibit B.

(rr)            “VWAP” has the meaning ascribed to such term in Section 2(a).

[Signature page follows.]

  

15

  

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

	  	
REAL ESTATE INVESTMENT GROUP L.P.

	  	  	  
	  	  	  
	  	  	  
	  	
By:
	
Tyrus S.A., its sole general partner

	  	  	  
	  	  	  
	  	
By:
	/s/ Eduardo S. Elsztain
	  	  	
Name:

	  	  	
Title:

	  	  	  
	  	  	  
	  	  	  
	  	
IRSA INVERSIONES Y REPRESENTACIONES S.A.

	  	  	  
	  	  	  
	  	
By:
	/s/ Eduardo S. Elsztain
	  	  	
Name:

	  	  	
Title:

	  	  	  
	  	  	  
	  	  	  
	  	
HERSHA HOSPITALITY TRUST

	  	  	  
	  	  	  
	  	
By:
	/s/ Ashish R. Parikh
	  	  	
Name: Ashish R. Parikh

	  	  	
Title: Chief Financial Officer

 

Investor Rights and Option Agreement Signature Pageex10_3.htm

EXHIBIT 10.3

 

EXECUTION VERSION

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”), dated as of August 4, 2009, is by and among Real Estate Investment Group L.P., a Bermuda limited partnership, whose general partner and majority limited partner is Tyrus S.A., a Uruguayan sociedad anónima
wholly-owned by IRSA Inversiones y Representaciones Sociedad Anónima, an Argentine sociedad anónima (the “Purchaser”), IRSA Inversiones y Representaciones Sociedad Anónima, an Argentine sociedad anónima (“IRSA”) (solely for purposes of Section 5.6 hereof), and Hersha Hospitality
Trust, a Maryland real estate investment trust (the “Company”).

WHEREAS, on or about the date hereof, the Purchaser is purchasing from the Company 5,700,000 shares (the “Primary Shares”) of the Company’s Priority Class A common shares of beneficial interest, par value $0.01 per share (“Common
Shares”), pursuant to that certain Purchase Agreement (the “Purchase Agreement”), dated as of August 4, 2009, by and among  the Purchaser, the Company and Hersha Hospitality Limited Partnership, L.P., a Virginia limited partnership (the “Operating Partnership”);

WHEREAS, in connection with the sale and purchase of the Primary Shares, the Company and the Purchaser intend to enter that certain Investor Rights and Option Agreement, of even date herewith, by and among the Purchaser and the Company (the “Investor Rights and Option Agreement”),
pursuant to which the Company shall grant the Purchaser the option (the “Option”) to purchase 5,700,000 additional Common Shares (the “Option Shares”) on the terms contained therein; and

WHEREAS, in order to induce Purchaser to enter into the Purchase Agreement and the Investor Rights and Option Agreement, the Company agrees that this Agreement shall govern the rights of Purchaser and subsequent Holders (as defined below) of Registrable Shares (as defined below) to cause the Company to register any Registrable Shares held
by Purchaser and such subsequent Holders.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:

ARTICLE I

DEFINITIONS

Unless otherwise indicated to the contrary, capitalized terms not otherwise defined herein shall have the meaning assigned to them in the Purchase Agreement.  In addition, the following terms, as used herein, have the following meanings:

“Business Day” means any day except a Saturday, Sunday or other day on which banks in New York, New York and Buenos Aires, Argentina are authorized by law to close.

“Commission” means the U.S. Securities and Exchange Commission.

  

 

  

“Damages Payment Date” shall mean the later of (i) five (5) Business Days and (ii) the first day of the calendar month, following the date on which a Registration Default shall have occurred.

“Default Rate” has the meaning set forth in Section 2.1(e).

“Effectiveness Date” has the meaning set forth in Section 2.1(a).

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission thereunder.

“FINRA” has the meaning set forth in Section 3.1(l).

“Holder” means the Initial Holder and any direct or indirect transferee of any Registrable Shares.

“Holders’ Counsel” means one counsel for the Holders that is selected by the Holders holding a majority of the Registrable Shares included in the Shelf Registration Statement, with such selection being effective by written consent of Holders holding a majority
of the Registrable Shares, whether record or beneficial Holders.

“Indemnified Party” has the meaning set forth in Section 4.3.

“Indemnifying Party” has the meaning set forth in Section 4.3.

“Initial Holder” means the Purchaser.

“Inspectors” has the meaning set forth in Section 3.1(i).

“Liquidated Damages” has the meaning set forth in Section 2.1(e).

“Option” has the meaning set forth in the recitals.

“Option Shares” has the meaning set forth in the recitals.

“Person” or “Persons” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or
other entity or government or other agency or political subdivision thereof.

“Primary Shares” has the meaning set forth in the recitals.

“Records” has the meaning set forth in Section 3.1(i).

“Registrable Shares” means (i) the Primary Shares acquired by the Initial Holder or its transferees in connection with the Purchase Agreement, (ii) the Option Shares acquired by the Initial Holder or its transferees in connection with the exercise of the Option
and (iii) any other security beneficially owned by a Holder that was issued or is issuable with respect to the Primary Shares or the Option Shares by way of exchange, stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise.  As to any particular Registrable Shares, such securities shall only cease to be Registrable Shares when (a) a registration statement with respect to the sale of such securities has
been declared effective by the Commission and all such Registrable Shares have been disposed of under such registration statement or (b) such time as all such Registrable Shares have been otherwise transferred to holders who may trade such shares without restriction under the Securities Act, and the Company has delivered a new certificate or other evidence of ownership for such securities not bearing a restrictive legend.

  

2

  

“Registration Default” has the meaning set forth in Section 2.1(e).

“Registration Expenses” has the meaning set forth in Section 3.2.

“Rule 144” means Rule 144 (or any successor rule of similar effect) promulgated under the Securities Act.

“Rule 415” means Rule 415 (or any successor rule of similar effect) promulgated under the Securities Act.

“Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated by the Commission thereunder.

“Selling Holder” means any Holder who is selling Registrable Shares pursuant to a public offering registered hereunder.

“Shelf Filing Date” has the meaning set forth in Section 2.1(a).

“Shelf Registration Period” has the meaning set forth in Section 2.1(b).

“Shelf Registration Statement” has the meaning set forth in Section 2.1(a).

“Successor” has the meaning set forth in Section 5.11.

“Underwriter” means a securities dealer who purchases any Registrable Shares or other securities of the Company as a principal for the resale of such securities and not as part of such dealer’s market-making activities.

“Underwritten Offering” means any sale of Common Shares for the account of the Company to an Underwriter or Underwriters on a firm commitment basis.

ARTICLE II

REGISTRATION RIGHTS

2.1           Shelf Registration.

(a)           The Company shall (i) use commercially reasonable efforts to prepare and file with the Commission, as soon as reasonably practicable following the date of this Agreement but in no event later than November 18, 2009 (the “Shelf
Filing Date”), a registration statement (such registration statement, including any replacement registration statement, the “Shelf Registration Statement”) with respect to the Registrable Shares under the Securities Act on Form S-3 (or any similar or successor form or other form to the extent that Form S-3 is not available), which Shelf Registration Statement (A) shall be an automatic shelf registration statement if the
Company is then a “well known seasoned issuer” (within the meaning of the Securities Act), providing for the registration and the sale by the Holders on a continuous or delayed basis pursuant to Rule 415 of the Registrable Shares, (B) shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the Commission to be filed therewith or be incorporated therein and (C) shall be reasonably acceptable to the Holders’
Counsel, and (ii) cause such Shelf Registration Statement to be declared effective by the Commission as soon as practicable thereafter but in no event later than March 15, 2009 (the “Effectiveness Date”). The Shelf Registration Statement shall be on an appropriate form and shall provide for the resale of the Registrable Shares from time to time, including pursuant to Rule 415, and subject to Section 2.2(b), pursuant to any method or
combination of methods legally available by the Holders, and the registration statement and any form of prospectus included or incorporated by reference therein (or any prospectus supplement relating thereto) shall reflect such plan of distribution or method of sale.

  

3

  

(b)           The Company shall use commercially reasonable efforts to keep the Shelf Registration Statement continuously effective for the period beginning on the Effectiveness Date and ending on the date that all of the Registrable Shares registered under the Shelf Registration Statement
cease to be Registrable Shares (the “Shelf Registration Period”).  During the Shelf Registration Period, the Company shall (i) subject to Section 2.1(c) hereof, prepare and file with the Commission such amendments and post-effective amendments to the Shelf Registration Statement as may be (A) necessary to keep the Shelf Registration Statement continuously effective
for the Shelf Registration Period or (B) reasonably requested by the Holders (whether or not required by the form on which the securities are being registered), and shall use commercially reasonable efforts to cause each such amendment to be declared effective by the Commission, if required, as soon as practicable after the filing thereof, (ii) subject to Section 2.1(c) hereof, use commercially reasonable efforts to cause any related prospectus
to be supplemented by any required supplement, and as so supplemented to be filed with the Commission pursuant to Rule 424 under the Securities Act (or any similar provisions then in force under the Securities Act), to the extent required, and (iii) comply in all material respects with the provisions of the Securities Act with respect to the disposition of all securities covered by the Shelf Registration Statement during the applicable period in accordance with the intended methods of disposition as may be reasonably
requested from time to time by the Holders and set forth in such Shelf Registration Statement as so amended or such prospectus as so supplemented.

(c)            If a majority of the independent trustees of the Company’s Board of Trustees (as determined in accordance with New York Stock Exchange and Commission rules and regulations) determines in its good faith judgment that the availability of the Shelf Registration Statement
or the use of any related prospectus would require the disclosure of material information that the Company has a bona fide business purpose for preserving as confidential or the disclosure of which would impede the Company’s ability to consummate a significant transaction, and that the Company is not otherwise required by applicable securities laws or regulations to disclose, upon written notice from the Company of such determination by the Company’s Board of Trustees, the rights of the Holders to
offer, sell or distribute any Registrable Shares pursuant to the Shelf Registration Statement or to require the Company to take action with respect to the registration or sale of any Registrable Shares pursuant to the Shelf Registration Statement shall be suspended until the earlier of (i) the date upon which the Company notifies the Holders in writing that suspension of such rights for the grounds set forth in this Section 2.1(c) is no longer
necessary and the Holders have received copies of any required amendment or supplement to the relevant prospectus, and (ii) forty-five (45) days.  The Company agrees to give such notice as promptly as practicable following the date that such suspension of rights is no longer necessary.

  

4

  

(d)           The Company may not utilize the suspension rights under Section 2.1(c) more than one time in any three-month period nor more than three times in any 12-month period.  Each Holder agrees by acquisition
of the Registrable Shares that upon receipt of any notice from the Company of the happening of any event of the kind described in Section 2.1(c), such Holder will forthwith discontinue its disposition of Registrable Shares pursuant to the Shelf Registration Statement relating to such Registrable Shares until the expiration of the applicable suspension period as provided in Section 2.1(c).

(e)           If (i) the Shelf Registration Statement has not been filed with the Commission by the Shelf Filing Date , (ii) the Shelf Registration Statement has not been declared effective by the Commission by Effectiveness Date, or (iii) to the extent that Registrable Shares remain outstanding,
the Shelf Registration Statement is filed and declared effective but shall thereafter cease to be effective (without being succeeded by a replacement shelf registration statement which is filed and declared effective) or usable (including as a result of any suspension period under Section 2.1(c) hereof) for the offer and sale of such Registrable Securities for any period of time (including any suspension period under Section 2.1(c) hereof) which shall exceed 45 days in any three-month period or 135 days in any
12-month period (each such event referred to in the immediately preceding clauses (i), (ii) and (iii), a “Registration Default”), the Company shall pay liquidated damages (“Liquidated Damages”) to the Holders, in cash, for the period (excluding the actual Shelf Filing Date or the actual Effectiveness Date) during which any such Registration Default shall be continuing, at a rate per week equal
to 25 basis points of the total purchase price of the Registrable Shares the held by Holders (prorated for partial weeks).  All accrued Liquidated Damages shall be paid by the Company by the following Damages Payment Date.  In the event that any Liquidated Damages are not paid by the Company on the applicable Damages Payment Date, then to the extent permitted by law, such overdue Liquidated Damages, if any, shall bear interest until paid at the prime rate announced to be in effect from time
to time, as published as the average rate in The Wall Street Journal, plus 2% (the “Default Rate”).  All accrued Liquidated Damages and any interest thereon shall be paid by wire transfer of immediately available funds or by federal funds check by the Company to Holders pro rata, based on the respective numbers of Registrable Shares then held by such Holder.  The parties acknowledge that damages from a failure to file the Registration
Statement or a failure to have the Shelf Registration Statement declared or remain effective are difficult to measure and that the payments provided for in this Section 2.1(e) are reasonable liquidated damages and not a penalty.  Promptly (but in no event more than five Business Days) after the occurrence or the termination of a Registration Default, the Company shall give the Holders at such time notice of such occurrence or termination (as applicable); provided, however,
that the failure by the Company to give such notice shall not subject the Company to any further Liquidated Damages following the termination of the Registration Default.

  

5

  

2.2           Piggyback Rights.

(a)           If the Company proposes to conduct an Underwritten Offering, the Company shall give written notice of such proposed Underwritten Offering to the Holders as soon as reasonably practicable, but in no event less than ten (10) Business Days before the anticipated offering
date (five (5) Business Days before the anticipated offering date if such Underwritten Offering is an “overnight” offering or equivalent expedited offering (an “Expedited Offering”), undertaking to provide each Holder the opportunity to participate in such Underwritten Offering on the same terms and conditions as the Company.  Each Holder will have seven (7) Business Days (three (3) Business Days in the case of
an Expedited Offering) after receipt of any such notice to notify the Company as to whether it wishes to participate in such Underwritten Offering; provided that should a Holder fail to provide timely notice to the Company, such Holder will forfeit any rights to participate in such Underwritten Offering.  If the Company shall determine in its sole discretion to delay the proposed Underwritten Offering, the Company shall provide written
notice of such determination to the Holders and shall thereupon be permitted to delay such Underwritten Offering.  In connection with any Underwritten Offering in which any Holder is exercising piggyback rights pursuant to this Section 2.2, the Company shall be entitled to select the Underwriters in connection with such Underwritten Offering.

(b)           If the managing Underwriter of an Underwritten Offering advises the Company that the inclusion of Registrable Shares by a Holder would materially adversely affect such Underwritten Offering, the Company shall include in such Underwritten Offering, as to each Holder exercising
piggyback rights pursuant to this Section 2.2 and any other Person or Persons having a contractual right to request their Common Shares be included in such Underwritten Offering, that number of Common Shares that the Company is so advised can be sold in such Underwritten Offering without materially and adversely affecting such Underwritten Offering, determined as follows:

	
  
	
(i)
	
First, for the Holders electing to participate in such Underwritten Offering, such number of Registrable Shares equal to twenty-five percent (25%) of the number of Common Shares able to be sold as determined by the managing Underwriter;

	
  
	
(ii)
	
Second, for the Company, the remaining number of Common Shares able to be sold as determined by the managing Underwriter;

	
  
	
(iii)
	
Third, for each remaining holder of Common Shares securities who holds contractual piggyback rights, other than the Holders described above in clauses (i), the fraction of such holder’s Common Shares proposed to be sold that is obtained by dividing (A) the remaining number of Common Shares that such holder proposes to include in such Underwritten Offering by (B) the total remaining number of Common Shares proposed
to be sold in such Underwritten Offering by all such holders; and

	
  
	
(iv)
	
Fourth, for each remaining holder of Common Shares, other than the Holders described above in clause (i) and the holders described above in clause (iii), if any, who are permitted by the Company to so participate, such number of Common Shares as is determined by multiplying (A) the remaining Common Shares able to be sold as determined by the managing Underwriter, by (B) the fraction obtained by dividing (1) the number
of Common Shares that such holder proposes to include in such Underwritten Offering by (2) the total number of Common Shares proposed to be sold in such Underwritten Offering by all such remaining holders.

  

6

  

ARTICLE III

REGISTRATION PROCEDURES

3.1           Filings; Information.  In connection with the registration of Registrable Shares pursuant to Section 2.1:

(a)           The Company will prepare and file with the Commission a registration statement on any form for that the Company then qualifies and which counsel for the Company shall deem appropriate and available for the sale of the Registrable Shares to be registered thereunder in
accordance with the intended method of distribution thereof, as may be reasonably necessary to effect the sale of such securities, the Company may require Selling Holders to promptly furnish in writing to the Company such information regarding such Selling Holders, the plan of distribution of the Registrable Shares and other information as the Company may be legally required to disclose in connection with such registration.

(b)           The Company will, if requested, prior to filing such registration statement or any amendment or supplement thereto, furnish to the Selling Holders, and each applicable managing Underwriter, if any, copies thereof, and thereafter furnish to the Selling Holders and each
such Underwriter, if any, such number of copies of such registration statement, amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein) and the prospectus included in such registration statement (including each preliminary prospectus) as the Selling Holders or each such Underwriter may reasonably request in order to facilitate the sale of the Registrable Shares by the Selling Holders.

(c)           After the filing of the registration statement, the Company will promptly notify the Selling Holders of any stop order issued or, to the Company’s knowledge, threatened to be issued by the Commission and use its commercially reasonable efforts to prevent the entry
of such stop order or to remove it if entered.

(d)           In addition to the requirements imposed on the Company elsewhere herein, the Company will qualify the Registrable Shares for offer and sale under such other securities or blue sky laws of such jurisdictions in the United States as the Selling Holders may reasonably request;
keep each such registration or qualification (or exemption therefrom) effective during the period in which such registration statement is required to be kept effective; and do any and all other acts and things which may be necessary or advisable to enable each Selling Holder to consummate the disposition of the Registrable Shares owned by such Selling Holder in such jurisdictions; provided that the Company will not be required to (i) qualify to
generally do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3.1(d), (ii) subject itself to taxation in any such jurisdiction, or (iii) consent to general service of process in any such jurisdiction.

  

7

  

(e)           The Company will as promptly as is practicable notify the Selling Holders, at any time when a prospectus relating to the sale of the Registrable Shares is required by law to be delivered in connection with sales by an Underwriter or dealer, of the occurrence of any event
requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Shares, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and promptly make available to the Selling Holders and to the Underwriters any such supplement or amendment.  Upon
receipt of any notice of the occurrence of any event of the kind described in the preceding sentence, the Selling Holders will forthwith discontinue the offer and sale of Registrable Shares pursuant to the registration statement covering such Registrable Shares until receipt by the Selling Holders and the Underwriters of the copies of such supplemented or amended prospectus and, if so directed by the Company, the Selling Holders shall deliver to the Company all copies, other than permanent file copies then in
the possession of the Selling Holders, of the most recent prospectus covering such Registrable Shares at the time of receipt of such notice.  Furthermore, in the event the Company shall give such notice, the Company shall, as promptly as is practical, prepare a supplement or post-effective amendment to the registration statement or a supplement to the related prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Shares being sold thereunder, such prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(f)            The Company will enter into customary agreements (including an underwriting agreement in customary form) and take such other actions (including, without limitation, participation in road shows and investor conference calls) as are required in order to expedite or facilitate
the sale of such Registrable Shares.

(g)           At the request of any Underwriter in connection with an underwritten offering, the Company will furnish (i) an opinion of counsel, addressed to the Underwriters and the Selling Holders, covering such customary matters as the managing Underwriter and the Selling Holders
may reasonably request and (ii) a comfort letter or comfort letters from the Company’s independent public accountants addressed to the Underwriters and the Selling Holders covering such customary matters as the managing Underwriter or the Selling Holders may reasonably request.

(h)           If requested by the managing Underwriter or any Selling Holder, the Company shall promptly incorporate in a prospectus supplement or post effective amendment such information as the managing Underwriter or any Selling Holder reasonably requests to be included therein,
including without limitation, with respect to the Registrable Shares being sold by such Selling Holder, the purchase price being paid therefor by the Underwriters and with respect to any other terms of the underwritten offering of the Registrable Shares to be sold in such offering, and promptly make all required filings of such prospectus supplement or post effective amendment.

  

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(i)            The Company shall promptly make available for inspection by any Selling Holder or Underwriter participating in any disposition pursuant to any registration statement, and any attorney, accountant or other agent or representative retained by any such Selling Holder or
Underwriter (collectively, the “Inspectors”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”), as shall reasonably be necessary to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information requested
by any such Inspector in connection with such registration statement; provided, however, that unless the disclosure of such Records is necessary to avoid or correct a misstatement or omission in the registration statement or the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, the Company shall not be required to provide any information under this subparagraph (i) if (A) the Company
believes, after consultation with counsel for the Company, that to do so would cause the Company to forfeit an attorney-client privilege that was applicable to such information or (B) if the Company has requested and been granted from the Commission confidential treatment of such information contained in any filing with the Commission or documents provided supplementally or otherwise.

(j)            The Company shall cause the Common Shares included in any registration statement to be listed on each securities exchange on which securities issued by the Company are then listed, if the Registrable Shares so qualify.

(k)           The Company shall provide a CUSIP number for the Registrable Shares included in any registration statement not later than the effective date of such registration statement.

(l)            The Company shall cooperate with each Selling Holder and each Underwriter participating in the disposition of such Registrable Shares and their respective counsel in connection with any filings required to be made with the Financial Industry Regulatory Authority (“FINRA”).

(m)          The Company shall participate in any financial roadshow organized for purposes of publicizing the sale or other disposition of the Registrable Shares.  Such participation shall include, but not be limited to, dispatch by the Company of personnel to assist in each
presentation made during the roadshow, and provision of the Company data needed for purposes of the roadshow.

(n)           The Company shall, during the period when the prospectus is required to be delivered under the Securities Act, promptly file all documents required to be filed with the Commission pursuant to Section 13(a) of the Exchange Act.

3.2           Registration Expenses.  In connection with any registration effected hereunder, the Company shall pay all expenses incurred in connection with such registration (the “Registration
Expenses”), including without limitation: (i) registration and filing fees with the Commission and FINRA, (ii) all fees and expenses of compliance with securities or blue sky laws (including fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Shares), (iii) printing expenses, messenger and delivery expenses, (iv) fees and expenses incurred in connection with the listing or quotation of the Registrable Shares, (v) fees and expenses of counsel to the Company
and the fees and expenses of independent certified public accountants for the Company (including fees and expenses associated with the special audits or the delivery of comfort letters), (vi) the fees and expenses of any additional experts retained by the Company in connection with such registration and (vii) the fees and expenses of other persons retained by the Company, whether or not any registration statement becomes effective; provided that
in no event shall Registration Expenses include any underwriting discounts or commissions or transfer taxes.

  

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ARTICLE IV

INDEMNIFICATION AND CONTRIBUTION

4.1           Indemnification By the Company.  The Company agrees to indemnify, and hold harmless each Selling Holder and their respective officers, directors, partners, shareholders, members, employees, agents
and representatives and each Person (if any) which controls a Selling Holder within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages, liabilities, costs and expenses (including reasonable attorneys’ fees) caused by, arising out of, resulting from or related to any untrue statement or alleged untrue statement of a material fact contained or incorporated by reference in any registration statement or prospectus relating
to the Registrable Shares (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus, including all documents attached thereto or incorporated by reference therein, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by or based upon any information
furnished in writing to the Company by or on behalf of such Selling Holder or by such Selling Holder’s failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto after the Company has furnished such Selling Holder with copies of the same; provided, however, that the Company shall have no obligation to indemnify under this sentence to the extent any such losses, claims, damages or liabilities
have been finally and non-appealably determined by a court of competent jurisdiction to have resulted from such Selling Holder’s willful misconduct or gross negligence.  The Company also agrees to indemnify any Underwriter of the Registrable Shares, their officers and directors and each person who controls such Underwriter on substantially the same basis as that of the indemnification of the Selling Holders provided in this Section 4.1,
except insofar as such losses, claims, damages or liabilities are caused by or based upon any information furnished in writing to the Company by or on behalf of such Underwriter or by such Underwriter’s failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto after the Company has furnished the Underwriter with copies of the same; provided, however, that the Company shall have no obligation
to indemnify under this sentence to the extent any such losses, claims, damages or liabilities have been finally and non-appealably determined by a court to have resulted from any such Underwriter’s willful misconduct or gross negligence.  The obligations of the Company under this Section 4.1 shall be in addition to any liability that the Company may otherwise have to any Indemnified Person and the obligations of any Indemnified
Person under this Section 4.1 shall be in addition to any liability that such Indemnified Person may otherwise have to the Company.  The remedies provided in this Section 4.1 are not exclusive and shall not limit any rights or remedies which may otherwise be available to an indemnified party at law or in equity.

  

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4.2           Indemnification By Selling Holders.  Each Selling Holder agrees to indemnify, and hold harmless the Company, its officers and directors, and each Person, if any, that controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages, liabilities, costs and expenses (including reasonable attorneys’ fees) caused by, arising out of, resulting from or related to any untrue statement or alleged untrue statement of a material fact contained or incorporated by reference in any registration statement or prospectus relating to the Registrable Shares (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus, including all documents attached thereto or incorporated by reference therein, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only with reference to information furnished in writing by or on behalf of such Selling Holder for use in any registration statement or prospectus relating to the Registrable Shares,
or any amendment or supplement thereto or any preliminary prospectus.  Each Selling Holder also agrees to indemnify and hold harmless any Underwriters of the Registrable Shares, their officers and directors and each person who controls such Underwriters on substantially the same basis as that of the indemnification of the Company provided in this Section 4.2, but only with reference to information furnished in writing by or on behalf of
such Selling Holder for use in any registration statement or prospectus relating to the Registrable Shares, or any amendment or supplement thereto or any preliminary prospectus.  Each such Selling Holder’s liability under this Section 4.2 shall be limited to an amount equal to the net proceeds (after deducting the applicable underwriting discount and expenses associated with such Selling Holder’s Registrable Shares sold thereunder)
received by such Selling Holder from the sale of such Registrable Shares by such Selling Holder.  The obligation of each Selling Holder hereunder shall be several and not joint.

4.3           Conduct Of Indemnification Proceedings.  In case any proceeding (including any investigation by any court, governmental, regulatory or administrative agency or commission or other governmental
authority or instrumentality, domestic (federal, state or municipal) or foreign governmental entity) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to Section 4.1 or Section 4.2, such Person (the “Indemnified Party”) shall promptly notify the Person against whom
such indemnity may be sought (the “Indemnifying Party”) in writing and the Indemnifying Party, upon the request of the Indemnified Party, shall retain counsel reasonably satisfactory to such Indemnified Party to represent such Indemnified Party and any others the Indemnifying Party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding.  In any such proceeding, any
Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded or joined parties) include both the Indemnified Party and the Indemnifying Party and, in the written opinion of counsel for the Indemnified Party, representation
of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  It is understood that the Indemnifying Party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed as they are incurred.  In
the case any such separate firm for the Indemnified Parties exists, such firm shall be designated in writing by the Indemnified Parties.  The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent (not to be unreasonably withheld), or if a final judgment is entered for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any loss or liability (to the
extent stated above) by reason of such settlement or judgment.

  

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4.4           Contribution.

(a)            If the indemnification provided for in this Article IV is, by operation of law unavailable to an Indemnified Party in respect of any losses, claims, damages or liabilities in respect of which indemnity
is to be provided hereunder, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall to the fullest extent permitted by law, contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative fault of such party in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable
considerations.  The relative fault of the Company, a Selling Holder and the Underwriters shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

(b)           The Company and each Selling Holder agrees that it would not be just and equitable if contribution pursuant to this Section 4.4 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph.  The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages or liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such action or claim.  Each Selling Holder shall not be required to contribute any amount in excess of the amount by which the net proceeds of the offering (before deducting expenses) received by such Selling Holder exceeds the amount of any damages that such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

  

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ARTICLE V

MISCELLANEOUS

5.1           Participation In Underwritten Offerings.  No Person may participate in any underwritten registered offering contemplated hereunder, unless such Person (a) agrees to sell its securities on the basis
provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements, (b) completes and executes all (to the extent reasonable and customary) questionnaires, powers of attorney, custody arrangements, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements and this Agreement and (c) furnishes in writing to the Company such information regarding such Person, the plan of distribution of the Registrable
Shares and other information as the Company may from time to time reasonably request or as may legally be required in connection with such underwritten registered offering; provided, however, that no such Person shall be required to make any representations or warranties in connection with any such underwritten registered offering other than representations and warranties as to (i) such Person’s ownership of his or its Registrable Shares to
be sold or transferred in a manner that is free and clear of all liens, claims and encumbrances, (ii) such Person’s power and authority to effect such transfer and (iii) such matters pertaining to compliance with securities laws as may reasonably be requested; provided further, however, that the obligation of such Person to indemnify pursuant to any such underwriting agreements shall be several, and not joint and several, among such Persons
selling Registrable Shares, and the liability of each such Person will be in proportion to, and; provided further that such liability will be limited to, the net amount received by such Person from the sale of such Person’s Registrable Shares pursuant to such underwritten registered offering.  Notwithstanding anything contained herein to the contrary, the Company’s Board of Trustees must approve any Underwriter engaged to conduct
any underwritten registered offering pursuant to this Agreement; provided, however, that if such underwritten registered offering has been initiated by the Purchaser and the Purchaser is the sole selling shareholder in such offering, the Purchaser shall have the right to select the Underwriter for such underwritten registered offering, subject to the approval of the Company’s
Board of Trustees, which approval shall not be unreasonably withheld.

5.2           Rule 144.  The Company shall file any and all reports required to be filed by it under the Securities Act and the Exchange Act and shall take such further action as the Holders may reasonably request
to the extent required from time to time to enable the Holders to sell Registrable Shares without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission.  Upon the request of any Holder, the Company will deliver to such Holder a written statement as to whether it has complied with such reporting requirements.

5.3           Market Stand Off.  In connection with the registration or offering of the Company’s securities, upon the reasonable request of the Company and the managing Underwriter of any underwritten
offering of the Company’s securities, each Holder agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of, any Registrable Shares (other than those included in the registration) without prior written consent of the Company, or such Underwriters, as the case may be, for such period of time (not to exceed 60 days from the effective date of such registration or offering) as the Company and the managing Underwriter may reasonably specify (the “Stand-Off
Period”); provided, however, that:

  

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(a)           all executive officers and trustees of the Company then holding Common Shares of the Company shall enter into similar agreements for not less than the time period required of the Holders hereunder; and

(b)           the Holders shall be allowed any concession or proportionate release allowed to any officer or trustee that entered into similar agreements.

In order to enforce the foregoing covenant in this Section 5.3, the Company shall have the right to place restrictive legends on the certificates representing the Registrable Shares subject to this Section 5.3 and
to impose stop transfer instructions with respect to the Registrable Shares and such other Common Shares of each Holder (and the Common Shares or securities of every other person subject to the foregoing restriction) until the end of such period.

Upon request, each such Holder agrees to execute a “lock-up” letter to such effect for the benefit of the Company or any Underwriter.

5.4           Amendments, Waivers, Etc.  This Agreement may not be amended, waived or otherwise modified or terminated except by an instrument in writing signed by the Company and the Holders of at least two-thirds
of the Registrable Shares then held by all the Holders.

5.5           Counterparts.  This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, all of which shall be considered one and the same agreement and shall
become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

5.6           IRSA Guarantee.  IRSA is a party to this Agreement solely for purposes of guaranteeing the obligations of the Purchaser and IRSA shall be liable to the Company, to the same extent as the Purchaser,
for all obligations of the Purchaser hereunder, including, without limitation, the obligations of the Purchaser set forth in Article IV hereof.

5.7           Entire Agreement.  This Agreement, together with the Purchase Agreement and the other agreements, instruments and documents referred to therein, constitutes the entire agreement of the parties
hereto and supersedes all prior agreements, letters of intent and understandings, both written and oral, among the parties with respect to the subject matter hereof.

5.8           Articles, Sections.  Unless the context indicates otherwise, references to Articles, Sections and paragraphs shall refer to the corresponding articles, sections and paragraphs in this Agreement.

5.9           Governing Law; Choice of Forum.  This Agreement shall be construed in accordance with and governed by, the internal laws of the State of New York (without giving effect to such State’s principles
of conflicts of laws principles).  Each of the parties hereto hereby irrevocably consents, to the maximum extent permitted by law, that any action or proceeding relating to this Agreement or the transactions contemplated hereby shall be brought, at the option of the party instituting the action or proceeding, in any court of general jurisdiction in New York County, New York, in the United States District Court for the Southern District of New York or in any state or federal court sitting in the area
currently comprising the Southern District of New York.  Each of the parties hereto waives any objection that it may have to the conduct of any action or proceeding in any such court based on improper venue or forum non conveniens, waives personal service of any and all process upon it, and consents that all service of process may be made by mail or courier service directed to it at the address set forth herein and that service so made shall be
deemed to be completed upon the earlier of actual receipt or ten days after the same shall have been posted or delivered to a nationally recognized courier service.  Nothing contained in this Section 5.9 shall affect the right of any party hereto to serve legal process in any other manner permitted by law.

  

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5.10         Assignment of Registration Rights.  No Holder of Registrable Shares may assign all or any part of its rights under this Agreement to any person without the prior written consent of the Company, which consent
shall not be unreasonably withheld.

5.11         Parties in Interest.  This Agreement shall be binding upon and inure to the benefit of the Company and any successor organization that shall succeed to substantially all of the business and property of the
Company, whether by merger, consolidation, acquisition of all or substantially all of the assets of the Company or otherwise, including by operation of law (each, a “Successor”).  The Company hereby covenants and agrees that it shall cause any Successor to adopt and assume this Agreement.  If a parent entity of the Company or its Successor becomes the issuer of the Registrable Shares, then the Company or such Successor
shall cause such parent entity to adopt and assume this Agreement to the same extent as if the parent entity were the Company or such Successor.

5.12         Notices.  All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, by facsimile, or mailed by registered or certified mail (return receipt requested),
or sent by Federal Express or other recognized overnight courier, to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

(a)            If to Purchaser, to:

Real Estate Investment Group L.P.

c/o IRSA Inversiones y Representaciones S.A.

Moreno 877, C1091AAQ

Buenos Aires, Argentina

Fax no. +54 (11) 4323-7449

Attention:  Eduardo S. Elsztain

with a copy to (which shall not constitute notice):

Zang, Bergel & Viñes Abogados,

Florida 537, 18th Floor, C1005AAK

Buenos Aires, Argentina

Fax no. +54 (11) 5166-7070

Attention:  Pablo Vergara del Carril

  

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(b)           If to the Company, to:

Hersha Hospitality Trust

510 Walnut Street, 9th Floor

Philadelphia, Pennsylvania 19106

Fax no. (717) 774-7383

Attention: Ashish R. Parikh

with a copy to (which shall not constitute notice):

Hunton & Williams LLP

951 East Byrd Street

Richmond, Virginia 23219

Fax no. (804) 788-8218

Attention: James S. Seevers, Jr.

Any of the above addresses may be changed at any time by notice given as provided above; provided, however, that any such notice of change of address shall be effective only upon receipt.  All notices, requests or instructions given in accordance herewith shall
be deemed received on the date of delivery, if hand delivered, on the date of receipt, if by facsimile, three business days after the date of mailing, if mailed by registered or certified mail, return receipt requested, and one business day after the date of sending, if sent by Federal Express or other recognized overnight courier.

5.13         Headings.  The headings contained in this Agreement are for convenience of reference only and are not part of the substance of this Agreement.

5.14         Limitations on Subsequent Registration Rights.  From and after the date of this Agreement, the Company shall not, without the prior written consent of Holders of not less than two-thirds of the then outstanding Registrable Shares, enter into any agreement with any holder or prospective
holder of any equity securities of the Company that would allow such holder or prospective holder (a) to include such equity securities in any registration statement filed for the Registrable Shares pursuant to the terms of this Agreement, unless under the terms of such agreement, such holder or prospective holder may include such equity securities in any such registration only to the extent that the inclusion of its equity securities will not reduce the amount of Registrable Shares of the Holders or (b) to have
its equity securities registered on a registration statement that is declared effective prior to the Effectiveness Date.

[Signature page follows.]

  

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IN WITNESS WHEREOF, each of the Purchaser, IRSA and the Company has caused this Agreement to be signed  by its duly authorized officer as of the date first written above.

 

	 	
REAL ESTATE INVESTMENT GROUP L.P.

	 	  
	 	  
	 	
By:
	
Tyrus S.A., its sole general partner

	 	  	  
	 	 	 
	 	
By:
	/s/ Eduardo S. Elsztain
	 	  	
Name:

	 	  	
Title:

	 	  
	 	  
	 	  
	 	
IRSA INVERSIONES Y REPRESENTACIONES S.A.

	 	  
	 	  
	 	
By:
	/s/ Eduardo S. Elsztain
	 	  	
Name:

	 	  	
Title:

	 	  
	 	  
	 	  
	 	
HERSHA HOSPITALITY TRUST

	 	  
	 	  
	 	
By:
	/s/ Ashish R. Parikh
	 	  	
Name: Ashish R. Parikh

	 	  	
Title: Chief Financial Officer

Registration Rights Agreement Signature Page

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