HERSHA HOSPITALITY TRUST
1,833,334 Priority Class A Common Shares of Beneficial Interest
SELECTED DEALER AGREEMENT
December ____, 1998
Dear Sirs:
We expect to purchase 1,833,334 Priority Class A common shares ("Common
Shares") of beneficial interest of Hersha Hospitality Trust (the "Company"). We
also expect to be granted the option to purchase up to 275,000 Common Shares to
cover over-allotments, if any (the 1,833,334 shares and 275,000 shares are
collectively referred to as the "Shares"). The Shares and the terms under which
they are to be offered for sale are more particularly described in the Company's
Preliminary Prospectus for the Shares dated December ____, 1998 (including any
subsequent Preliminary Prospectus and the final Prospectus, the "Prospectus").
1. The Shares are to be offered to the public by us in accordance with the
terms of the offering (the "Offering") set forth in the Prospectus. We have
advised you of the price per share of the Shares (the "Public Offering Price").
2. As the underwriter, we are offering to certain dealers ("Selected
Dealers"), subject to prior sale and the terms and conditions hereof, a portion
of the Shares at the Public Offering Price less a concession of four percent
(4%) of the Public Offering Price. The Selected Dealers will be dealers that are
actually engaged in the investment banking or securities business and that are
either (i) members in good standing of the National Association of Securities
Dealers, Inc. (the "NASD") that are registered with the NASD and maintain net
capital pursuant to Rule 15c3-1 promulgated under the Securities Exchange Act of
1934 (the "1934 Act") of not less than $250,000 or (ii) dealers with their
principal place of business located outside the United States, its territories
and its possessions and not registered as brokers or dealers under the 1934 Act,
who have agreed not to make any sales within the United States, its territories
or its possessions or to persons who are nationals thereof or residents therein.
The Selected Dealers have agreed to comply with the provisions of section 24 of
Article III of the Rules of Fair Practice of the NASD, and, if any such dealer
is a foreign dealer and not a member of the NASD, such Selected Dealer also has
agreed to comply with the NASD's interpretation with respect to free-riding and
withholding, to comply, as though it were a member of the NASD, with the
provision of section 8 and 36 of Article III of such Rules of Fair Practice, and
to comply with section 25 of Article III thereof as that section applies to
nonmember foreign dealers.
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3. If you desire to purchase any of the Shares, your application should
reach us promptly by telephone, telegraph or telecopy at our office at Xxxxxxxx
& Xxxxxxxxx, Incorporated, 000 X. Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxxxx
00000. We reserve the right to reject subscriptions in whole or in part, to make
allotments and to close the subscription books at any time without notice. The
Shares allocated to you will be confirmed, subject to the terms and conditions
of this Agreement.
4. No expense shall be charged to you. A single transfer tax, if payable,
upon the sale of the Shares to you will be paid when such Shares are delivered.
However, you shall pay any transfer tax on sales of Shares by you and you shall
pay your proportionate share of any transfer tax (other than the single transfer
tax described above) in the event that any such tax shall from time to time be
assessed against you and other Selected Dealers as a group or otherwise.
5. Neither you nor any other person is or has been authorized to give any
information or to make any representation in connection with the sale of the
Shares other than as contained in the final Prospectus.
6. On becoming a Selected Dealer, and in offering and selling the Shares,
you agree to comply with all the applicable requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and the 1934 Act. You confirm that you are
familiar with (i) Rule 15c2-8 under the 1934 Act relating to the distribution of
preliminary and final prospectuses for securities of an issuer (whether or not
the issuer is subject to the reporting requirements of Xxxxxxx 00 xx 00(x) xx
xxx 0000 Xxx), (xx) Rule 15c6-1 under the 1934 Act, and (iii) the NASD's
interpretation with respect to free-riding and withholding, and confirm that you
have complied with and will comply with said rules and interpretations. You
confirm also that you are familiar with Release No. 4968 of the Securities and
Exchange Commission under the 1933 Act and that you have complied and will
comply with the requirements therein relating to the distribution of copies of
the Preliminary Prospectus relating to the Shares. You confirm that you are
registered with the NASD and maintain net capital pursuant to Rule 15c3-1
promulgated under the 1934 Act of not less than $250,000.
7. We hereby confirm that we will make available to you such number of
copies of the Prospectus (as amended or supplemented) as you may reasonably
request for the purposes contemplated by the 1933 Act or the 1934 Act, or the
rules and regulations thereunder.
8. Upon request, you will be informed as to the states and other
jurisdictions in which, and limitations, if any, pursuant to which, we have been
advised that the Shares are qualified for sale under the respective securities
or blue sky laws of such states and other
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jurisdictions, but we do not assume any obligation or responsibility as to the
right of any Selected Dealer to sell the Shares in any state or other
jurisdiction or as to the eligibility of the Shares for sale therein or to any
particular prospective purchaser herein. You agree that you will not sell the
Shares in any state or jurisdiction or to any purchaser in which or to whom the
Shares are not eligible to be sold.
9. You agree that you will not, at any time prior to the completion by us
of distribution of the Shares acquired by you pursuant to this Agreement, bid
for, purchase, sell or attempt to induce others to purchase or sell, directly or
indirectly, any securities of the Company other than (i) as provided for in this
Agreement, or (ii) purchases or sales of any such securities as broker on
unsolicited orders for the account of others.
10. No Selected Dealer is authorized to act as our agent or agent of the
Company or otherwise to act on our behalf or on behalf of the Company in
offering or selling the Shares to the public or otherwise to furnish any
information or make any representation except as contained in the Prospectus.
11. Nothing will constitute the Selected Dealers an association or other
separate entity or partners with us, or with each other, but you will be
responsible for your share of any liability or expense based on any claim to the
contrary. We shall not be under any liability for or in respect of value,
validity or form of the Shares, of the delivery of the certificates for the
Shares, or the performance by anyone of any agreement on its part, or the
qualification of the Shares for sale under the laws of any jurisdiction, or for
or in respect to any other matter relating to this Agreement, except for the
lack of good faith and for obligations expressly assumed by us in this Agreement
and no obligation on our part shall be implied herefrom. The foregoing
provisions shall not be deemed a waiver of any liability imposed under the 1933
Act.
12. We will notify you of the exact date or dates (each, a "Closing Date")
on which the sale of the Shares (each, a "Closing") will occur. Payment for
Shares purchased through you hereunder shall be made through Depository Trust
Company at the Public Offering Price (less the commission described above) by
wire transfer of IMMEDIATELY AVAILABLE FED FUNDS no later than 11:00 a.m. on the
Closing Date in accordance with the following instructions:____________________
__________________________________________________________.
13. Notices to us should be addressed to Xx. X. XxXxxxxx Downs, III,
Senior Vice President, Xxxxxxxx & Xxxxxxxxx, Incorporated, 000 X. Xxxx Xxxxxx,
00xx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000. Notices to you shall be deemed to have
been duly given if telegraphed or mailed to you at the address to which this
letter is addressed.
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14. This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Virginia without giving effect to the choice of
law or conflicts of law principles thereof.
15. This Agreement shall terminate at the close of business on the 45th
day after the effective date of the registration statement relating to the
Prospectus. We may terminate this Agreement at any time prior thereto by notice
to you. In the event that prior to the termination of this Agreement we purchase
in the open market or otherwise any Shares delivered to you, you agree to repay
to us the amount of the above concession to Selected Dealers plus brokerage
commissions and any transfer taxes paid in connection with such purchase. At any
time prior to the termination of this Agreement, you will, upon our request,
report to us the number of Shares purchased by you under this Agreement which
then remains unsold and will, upon our request, sell to us such Shares that we
may designate, at the Public Offering Price less an amount to be determined by
us not in excess of the concession allowed you.
16. If you desire to purchase any Shares, please confirm your application
by signing and returning to us your confirmation on the duplicate copy of this
letter enclosed herewith, even though you may have previously advised us
thereof, by telephone, telegraph or telecopy.
Very truly yours,
XXXXXXXX & XXXXXXXXX, INCORPORATED
By:_______________________________
X. XxXxxxxx Downs, III
Senior Vice President
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December ___, 1998
Xxxxxxxx & Xxxxxxxxx, Incorporated
0000 X. Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xx. X. XxXxxxxx Downs, III
We hereby request an allocation of ________ Priority Class A common shares
of beneficial interest (the "Shares") of Hersha Hospitality Trust for purchase
by us in accordance with the terms and conditions stated in the foregoing
letter. We hereby acknowledge receipt of the Prospectus referred to in the first
paragraph thereof relating to said Shares. We further state that we have relied
upon said Prospectus and upon no other statement whatsoever, whether written or
oral. We confirm that we are a dealer actually engaged in the investment banking
or securities business and that we are either (i) a member in good standing of
the National Association of Securities Dealers, Inc. (the "NASD") that is
registered with the NASD and maintain net capital pursuant to Rule 15c3-1
promulgated under the Securities Exchange Act of 1934 (the "1934 Act") of not
less than $250,000 or (ii) a dealer with its principal place of business located
outside the United States, its territories and its possessions and not
registered as a broker or dealer under the Securities Exchange Act of 1934, as
amended, who hereby agrees not to make any sales within the United States, its
territories or its possessions or to persons who are nationals thereof or
residents therein. We hereby agree to comply with the provisions of Section 24
of Article III of the Rules of Fair Practice of the NASD, and if we are a
foreign dealer and not a member of the NASD, we also agree to comply with the
NASD's interpretation with respect to free-riding and withholding, to comply, as
though we were a member of the NASD, and with the provisions of Section 8 and 36
of Article III of such Rules of Fair Practice, and to comply with Section 25 of
Article III thereof as that Section applies to non-member foreign dealers. We
also hereby confirm that we have complied with and will comply with Rules 15c2-8
and 15c6-1 promulgated under the 1934 Act.
__________________________________________
(Name of Firm)
By:_______________________________________
(Title)
Address: ________________________________
________________________________
________________________________
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