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Exhibit 10.1

 

 

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AGREEMENT OF PURCHASE AND SALE

by and between

METRO TWO HOTEL, LLC (the “Seller”)

and
 
CNR QUEENS HOSPITALITY, LLC
(the “Buyer”)
 

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AGREEMENT OF PURCHASE AND SALE

THIS AGREEMENT OF PURCHASE AND SALE (the “Agreement”) is made and entered into
as of the 13th day of May, 2005 (“Effective Date”), by and between METRO TWO
HOTEL, LLC, a Florida limited liability company (the “Seller”), and CNR QUEENS
HOSPITALITY, LLC, a New York limited liability company (the “Buyer”).

BACKGROUND

WHEREAS, Seller is the owner in fee simple of certain land situate at 3805
Hunters Point Avenue, Long Island City, New York, being more particularly
described in Exhibit A attached hereto (the “Land”); and

WHEREAS, Seller is also the owner of the Improvements (as hereinafter defined)
erected on the Land, including but not limited to a Holiday Inn Express hotel
containing seventy nine (79) guest rooms and related improvements (the “Holiday
Inn”); and

WHEREAS, Seller desires to sell and Buyer desires to purchase all of Seller’s
right, title and interest in and to the Land, the Improvements and certain other
assets and property used in the operation thereof under the terms and conditions
hereinafter set forth.

NOW THEREFORE, in consideration of the covenants and provisions contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound, the parties hereto
agree as follows:

1.    Agreement to Sell and Purchase.

(a)        Sale and Purchase. Seller hereby agrees to sell to Buyer, and Buyer
hereby agrees to purchase from Seller, subject to the terms and conditions of
this Agreement, the following:

(i)    All right, title and interest, legal and equitable, of Seller or any
other person or entity in and to the Land, and the buildings and improvements
situate thereon on the date hereof (the “Improvements”), and all right, title
and interest in all easements, rights-of-way, licenses, privileges,
hereditaments and appurtenances, if any, belonging to or inuring to the benefit
of the Land or Improvements, and all right, title and interest of Seller or any
other person or entity in and to any land lying in the bed of any highway,
street, road or avenue, opened or proposed, in front of, abutting or adjoining
the Land (collectively, along with the Land and Improvements, the “Real
Property”); and

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(ii)   All of the assets or other personal property of any nature whatsoever
located upon the Land or upon or in the Improvements, and/or used or held for
use or associated with the ownership and/or operation of the Holiday Inn,
including, without limitation, all fixtures, machinery, equipment, building
supplies, food and liquor supplies, appliances, bar and restaurant supplies,
furniture, furnishings, linens, uniforms, room supplies and maintenance and
repair supplies (including, without limitation, that which is described on
Exhibit B attached hereto and made a part hereof), all leases, agreements and
other contracts which Buyer shall assume as hereafter set forth, all building
plans and surveys of the Real Property, all books and records (including,
without limitation, computer software), all procedure and employment manuals,
all marketing materials, and all of Seller’s or any other person’s or entity’s
right, title and interest in and to any intangible personal property useful in
connection with the foregoing, expressly excluding the name “Holiday Inn", and
all trademarks used by Seller in connection with the operation of the Holiday
Inn, and including, without limitation, all warranties, and all occupancy
certificates, licenses, permits, variances and land use entitlements,
authorizations and approvals required by law or issued by governmental entities
having jurisdiction over the Holiday Inn (collectively, the “Personal Property”
and together with the Real Property, hereinafter referred to as the “Property”).

(b)   No Liabilities. It is expressly acknowledged and agreed by Seller that
Buyer has no intention of assuming, and does not and will not, in any way,
assume, undertake, agree to perform or accept responsibility for any debts,
liabilities or obligations of Seller of any kind whatsoever, whether absolute,
contingent or otherwise, known or unknown, pending or threatened, concerning the
Property or otherwise, other than liabilities and obligations of Seller arising
under the Assigned Contracts (as defined in Section 5(f) hereof) after the date
of Closing. Seller shall remain fully and solely responsible for the
satisfaction of all of Seller’s own liabilities and obligations, absolute,
contingent or otherwise, known or unknown, liquidated or unliquidated, pending
or threatened, whether incurred before or after the date of Closing, except for
such liabilities and obligations arising under the Assigned Contracts after
Closing. Such liabilities and obligations which Seller shall remain responsible
for include, without limitation, any liabilities or obligations of Seller
arising prior to Closing for trade payables or employee compensation, sums due
under Contracts (as defined in Section 5(f) hereof), other than Assigned
Contracts, prior to or after Closing, sums due under Assigned Contracts arising
prior to Closing, sums due on account of taxes of any kind owed by Seller or
imposed with respect to the Property or the operation of the Holiday Inn prior
to Closing, liabilities for personal injury, property damage or other damages
arising prior to Closing, liabilities arising by reason of any statute, law or
regulation applicable to Seller or Seller’s operation of the Property, and all
other liabilities or obligations arising by any other reason out of the
operation of the Holiday Inn prior to Closing. Seller shall indemnify, defend
and hold Buyer harmless from and against any and all damages, liabilities, costs
and expenses (including, without limitation, attorneys’ fees and expenses) which
arise out of the assertion against Buyer or the Property of any such liabilities
or obligations of Seller, or Seller’s failure to fulfill any such obligations.
The terms of this Section 1(b) shall survive Closing.

(c)   No Employees Seller acknowledges and agrees that Buyer shall have no
obligation to employ or retain, in any capacity, employees employed or
subcontractors engaged by Seller except for contractors who are parties to the
Assigned Contracts. Notwithstanding the foregoing, should Buyer desire to employ
or retain, in any capacity, any of Seller’s employees, Seller shall use its best
efforts to facilitate the transfer to Buyer of such employees. The terms of this
Section 1(c) shall survive Closing.

2.   Purchase Price. The aggregate purchase price for the Property (the
“Purchase Price”) shall be the sum of Nine Million Dollars ($9,000,000), which,
subject to the terms and conditions hereinafter set forth, shall be paid or
delivered to Seller by Buyer as follows:

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(a)  Deposit. Within one (1) business day after the date when Buyer receives
from Seller a fully executed copy of this Agreement (“Effective Date”), Buyer
shall deliver to the Title Company (as hereinafter defined) Buyer’s check in the
amount of $200,000 (the “Deposit”)

(b)  Cash Portion The balance of the Purchase Price, plus or minus any net cash
adjustments made pursuant to this Agreement, shall be paid, at Buyer's option,
in cash, by wire transfer, or by a bank, certified or cashier's check, at
Closing, subject to the provisions of Section 2A below. Prorations and other
adjustments to be made under this Agreement shall be “netted” against each other
and shall be accounted for as an adjustment to the cash portion of the Purchase
Price.

(d)  Allocation of Purchase Price. Within thirty (30) days after the Effective
Date, the Purchase Price shall be allocated by Seller and Buyer between the Real
Property and Personal Property. In addition, during such Inspection Period (as
defined in Section 10(a) hereof), the parties shall agree to allocate the
Purchase Price for the Personal Property among various subcategories, such as
furniture, fixtures and equipment, intangibles, goodwill and similar items.
Seller and Buyer shall report the transactions contemplated herein for tax and
all other purposes in accordance with the allocations made by Seller and Buyer.

(e)  The Title Company shall be responsible solely for the safekeeping of the
Deposit. The Title Company shall not be liable to the Seller or the Buyer for
the performance or non-performance of any term of this Agreement by the Seller
or the Buyer, and shall not be required to determine any questions of fact or
law. If litigation is commenced involving the Deposit or this Agreement, the
Title Company shall have the right to deposit the Deposit with the clerk of the
court in which litigation is pending, or if the Title Company is a party to such
litigation, to interplead all interested parties in any court of competent
jurisdiction and deposit the Deposit with the clerk of such court.

 
2A.      Compliance with New York State Sales and Use Tax Law. 

(a)  Notice to Buyer. In accordance with applicable New York State Sales and Use
Tax Laws, Seller is delivering to Buyer the “Notice to Prospective Purchasers of
a Business or Business Assets” which is attached hereto as Exhibit “E”.

(b)  Notification of Department of Taxation and Finance. Within ten (10) days
after the Effective Date, Seller shall deliver to Buyer all information needed
by Buyer to provide notification of this transaction to the New York State
Department of Taxation and Finance (the “Tax Department”), pursuant to Section
1141(c) Article 28 of the New York State Sales and Use Tax Law. At least ten
(10) days prior to the deadline for “Closing” (hereinafter defined), Buyer shall
complete and submit to the Tax Department the “Notification of Sale, Transfer or
Assignment in Bulk” which is attached hereto as Exhibit “F” (the “Bulk Sales
Notice”).

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(c)  Tax Clearance Certificate and Escrows. Seller and Buyer acknowledge and
agree that, as a result of this transaction and in accordance with New York law,
Buyer could be held personally liable for any sales taxes owed by Seller,
unless, after submission of the Bulk Sales Notice, Buyer withholds the Purchase
Price from the Seller until Buyer shall have received from the Tax Department a
tax clearance letter and has provided for the escrow of appropriate amounts of
the Purchase Price to satisfy outstanding sales taxes or a certificate showing
that there are no sales taxes or other amounts due and owing from Seller.
Therefore, Seller agrees that (1) if Buyer shall not have received a tax
clearance letter or certificate as of the deadline of Closing, Seller shall
place in escrow with the “Title Company” (hereinafter defined) the Purchase
Price, and (2) if Buyer has received a tax clearance letter from the Tax
Department, and such letter recommends or requires the escrow of funds, Seller
shall place in escrow with the Title Company (or such other entity as required
by the Tax Department) such amounts as recommended or required by the Tax
Department to satisfy any sales taxes owed by Seller.

3.         Title.

(a)  Title to the Real Property as delivered to Buyer at the Closing shall be
good and marketable legal and equitable title, free and clear of all liens,
restrictions, easements, encumbrances, leases, tenancies (except daily occupancy
agreements with hotel guests) and other title objections, except the following:
(i) such taxes for the then current year as are not due and payable on the date
of the delivery of title; (ii) any liens for municipal betterments assessed
after the date of this Agreement; and (iii) easements, restrictions, and rights
of way of record described in Exhibit “C” hereto, provided same do not
materially interfere with the use of the Property as a hotel, or impose any
financial obligations upon the owner thereof (collectively, the “Permitted
Exceptions”). In addition, such title shall be insurable under a 1992 ALTA
Owner’s Policy, Form B, as aforesaid, without the so-called “creditor’s rights
exception”, by any reputable title insurance company at regular rates. Any liens
or encumbrances other than the Permitted Exceptions which may be removed as
exceptions to the title policy to be issued to Buyer by the payment of money in
satisfaction thereof shall be removed, either by being insured over by Buyer’s
title insurance company, Lawyers Title Insurance Corporation (“Title Company”)
or, if the Title Company will not so insure, then by application of such portion
of the Purchase Price as shall be necessary to pay or satisfy the same. Title to
the Personal Property shall be good and marketable and free and clear of all
liens, security interests and other encumbrances.

(b)  All charges for any title insurance policy issued to Buyer shall be paid by
Buyer.

(c)  Notwithstanding anything to the contrary set forth herein, Buyer and Seller
acknowledge and agree that, as of the date hereof, nine (9) liens, as more fully
shown on Exhibit “H” attached hereto and incorporated herein by reference (the
“Environmental Liens”), have been filed against the Property by the New York
City Environmental Control Board. In addition to the obligations of Seller set
forth above to cause the removal of the Environmental Liens as exceptions to the
title policy to be issued to Buyer, Seller agrees to indemnify, defend and save
Buyer, its members, officers, employees, agents, supervisors, attorneys and
consultants harmless from any and all claims, suits, demands, fines, liens,
causes of action, awards or damages in either law or equity arising out of or
caused by the Environmental Liens and any or all matters, occurrences or events
which resulted in the imposition of the Environmental Liens filed against the
Property, the same to include but not be limited to reasonable attorney fees,
consultant’s fees, expert witness fees, and costs incurred by Buyer, its
members, officers, employees, agents, supervisors, attorneys and consultants in
defending against or removing such claims, suits, demands, fines, liens, causes
of action, awards or damages.

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4.         Closing; Possession. Closing for the sale and purchase of the
Property (the “Closing”) shall occur in escrow at the offices of the Title
Company, or at such other location as the parties hereto shall mutually agree
upon, on a date and at a time agreed to by the parties, but not later than
fourteen (14) days after the satisfaction of the conditions set forth in
Sections 10(b) and (c) hereof. Notwithstanding anything to the contrary
contained herein, at Buyer’s sole option and upon five (5) days written notice
to Seller, the Closing shall occur on or before May 13, 2005. At Closing, Seller
shall deliver to Buyer possession of the Property, free and clear of the rights
of, or possession by, any party (other than daily hotel guests) and in the same
condition as on the date hereof (subject to Section 5(e) hereof), reasonable
wear and tear excepted.

5.         Seller’s Representations and Warranties. Seller covenants, represents
and warrants to Buyer as follows:

(a)   Litigation. There is no claim, legal action, suit, arbitration, government
investigation, condemnation proceeding or eminent domain or other legal or
administrative proceeding pending, or to the best of Seller’s knowledge,
threatened or anticipated, against or relating to the Property or Seller except
a certain personal injury suit instituted by Steven Walsh against Seller as
defendant as more particularly described on Exhibit “G” attached hereto.

(b)   Financial Statements. To the best of Seller’s knowledge, the financial
statements and records with respect to the Property which Buyer has been and
will be given to review in connection with a due-diligence inspection thereof
are and will be true and correct in all respects and accurately present the
financial position and results of operations of Seller and the Property as of
the date of such financial statements for the periods covered thereby. Since the
date of the most recent financial statements that have been given or will be
given to Buyer to review: (i) Seller’s business with respect to the Property has
been operated in the ordinary course and there has been no adverse change in its
financial condition, assets, liabilities, business, licensure status or
prospects and results of operations as such relate to the Property; (ii) Seller
has not incurred liabilities or obligations with respect to the Property other
than in the regular, ordinary and customary course of the Property’s business;
and (iii) the Property has had no strikes or labor disputes.

(c)   Tax Liens. No lien exists or can be asserted against the Property because
of the failure of Seller or any other party to file any tax return or report or
to pay any federal, state or local taxes of any kind, including, but not limited
to, income, sales, property, Social Security, employment or withholding taxes,
or any assessments, interest, penalties or deficiencies, fees or other
governmental charges or impositions. Seller has paid or shall pay prior to
Closing any and all taxes, licenses fees and other charges levied, assessed or
imposed upon the Property other than those which are not yet due and payable.
There are no assessments for public improvements made to the Real Property which
remain unpaid.

(d)   Intentionally omitted. 

(e)   Intentionally omitted.

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(f)   Contracts. There are no development, management, leasing, service,
equipment, supply, maintenance or concession agreements with respect to or
affecting all or any portion of the Property or the operation or maintenance
thereof except as set forth in Exhibit D attached hereto (the “Contracts”).
Seller has heretofore delivered or simultaneously herewith delivered to Buyer a
current, complete and correct photocopy of each Contract. To Seller’s knowledge,
neither Seller nor any of its agents or affiliates is in default under any
Contract. Neither Seller nor any of its agents or affiliates has received any
notice from any party to any Contract claiming the existence of any default or
breach thereunder and no event or omission has occurred that, with the giving of
notice or the lapse of time, or both, would constitute a default thereunder.
Except as to the Contracts and New Contracts (as defined in Section 7(d) hereof)
that either (i) Buyer, in its sole discretion, notifies Seller that Buyer
desires to assume prior to or as of the date of Closing, or (ii) must be assumed
by Buyer because they run with the Property and which must be assumed by Buyer
because they can not be terminated by Seller upon thirty (30) days or fewer
prior written notice (the “Assigned Contracts”), Seller shall terminate or cause
termination of all Contracts effective as of the Closing, including, without
limitation, that certain Management Agreement by and between Seller (and/or its
affiliates) and HHMLP - Hunters Point LLC (the “Management Agreement”).

(g)   Employees. There is no union or collective bargaining agreement in effect
relating to any employee whose job relates to the Property or its operation
(each an “Employee” and collectively the “Employees”), and Seller knows of no
attempts or efforts to organize any of the Employees. At Closing, Seller shall
provide to Buyer a list showing each Employee’s accrued but unpaid wages,
salaries, bonuses, accrued vacation and sick pay and other benefits through
Closing (the “Employee List”). At Closing, Seller shall pay to Buyer (if such
Employees continue to work for Buyer after Closing) or the Employees an amount
equal to the wages, salaries and bonuses due to the Employees named on such
Employee List through the first shift of the date of Closing (except that wages
and salaries of housekeepers for the day of Closing shall be paid by Seller),
and an amount equal to the value of accrued vacation, sick pay and other
benefits earned by or due to such Employees through 12:01 a.m. on the date of
Closing.
 
(h)   True and complete copies of certain documents evidencing and/or securing
the Loan (collectively, “Loan Documents”) are described on Exhibit “E” and made
a part hereof and have been delivered to Buyer. Seller has not received notice
of any default under the Loan Documents, there are no defaults under the Loan
Documents, and, to the best of Seller’s knowledge, no conditions exist which
with the passage of time or the giving of notice, or both, would constitute a
default under the Loan Documents.

The term “affiliate” as used in this Agreement shall mean any person or entity
controlling, controlled by or under common control with, directly or indirectly,
another person or entity. The representations and warranties of the parties set
forth in this Section 5 shall survive the Closing and any termination of this
Agreement.

6.   “As-Is” Sale. Seller and Buyer acknowledge that the Property is being
purchased by Buyer in “as is, where is” condition as of the date hereof, with
all faults, and that Seller has made no representation, warranty or agreement,
not expressly set forth in this Agreement, with respect to the physical or
financial condition of the Property or any portion thereof.

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7.   Seller’s Operations Pending Closing or Refund.

Seller covenants and agrees that between the date hereof and the earlier of (1)
the date of Closing or, (2) if this Agreement is terminated by Buyer for any
reason which entitles Buyer to terminate this Agreement pursuant to the terms
hereof, the date when the entire Deposit plus interest which has accrued
thereon, is returned by Seller to Buyer:

(a)  Preserve Assets. Seller shall, at its sole cost and expense, do or cause to
be done all things necessary to maintain, repair and preserve the Property in
the same condition as it is on the date hereof, normal wear and tear excepted.

(b)  Intentionally Omitted.

(c)  Access to Records and Property. Seller and its agents shall give Buyer and
Buyer’s counsel, accountants, engineers, insurance carriers, lenders and other
representatives access to all of Seller’s and its affiliates’ properties, books,
accounts, contracts, commitments, licenses, site plans, surveys, records and
receipts used or useful in connection with the Property or the operation
thereof, and Seller shall furnish Buyer with all such information concerning
Seller’s and its affiliates’ affairs with respect to the Property or the
operation thereof in Seller’s possession and/or control and as Buyer may
reasonably request. Buyer and persons designated by Buyer shall have the right
to enter upon the Real Property (interior and exterior) during normal business
hours from time to time prior to Closing upon at least twenty-four (24) hours
prior notice (which, notwithstanding Section 15(h) hereof, may be verbal) to
inspect, test, survey and take test borings and soil samples from the Real
Property and for any other purpose relating to the intended acquisition of the
Property. Buyer shall indemnify and hold harmless Seller from and against any
and all claims relating to physical damage to the Property or personal injuries
to third persons arising out of Buyer’s entry upon the Property pursuant to the
terms of this Section 7(c).

(d)  Conduct of Business; New Contracts. Seller, its affiliates and their
respective agents shall conduct operation of the Holiday Inn as currently
conducted in the ordinary course of business and no changes shall be made
therein. None of Seller, its affiliates or their respective agents shall enter
into any contracts or agreements with an aggregate total payment of greater than
$5,000 affecting all or any portion of the Property or the operation or
maintenance of the Property (“New Contracts”) unless Seller receives written
approval from Buyer to enter into such a New Contract. Seller shall notify Buyer
immediately of the existence of any such New Contract upon the execution
thereof. Seller and its affiliates shall perform when due all of their
respective obligations under all Contracts and New Contracts.

(e)  Maintenance of Insurance. Seller shall maintain in full force and effect
all current insurance policies pertaining to the Property and its operation.

(f)  Intentionally omitted.

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(g)  Intentionally omitted.

The terms of this Section 7 shall survive Closing or the earlier termination of
this Agreement by Buyer for a period of six (6) months .

7A.      Intentionally Omitted.

8.   Provisions with Respect to Closing.

(a)   Seller’s Deliveries. At Closing Seller shall deliver or cause to be
delivered to Buyer the following, all in form and substance satisfactory to
Buyer and Buyer’s counsel:

(i)  A bargain and sale deed with covenants (the “Deed”) for the Real Property,
duly executed and acknowledged by Seller and all other parties with a legal or
equitable interest in title to the Real Property, conveying fee simple title to
the Real Property to Buyer;

(ii)  A special warranty bill of sale for all of the Personal Property (other
than that which is conveyed pursuant to the Assignment and Assumption defined
below), duly executed and acknowledged by Seller and all other parties with a
legal or equitable interest therein;

(iii)    An assignment of all Assigned Contracts (“Assignment and Assumption”)
duly executed by Seller and all other parties with a legal or equitable interest
therein and the written consent (if required and if Seller is able to obtain
prior to Closing) to the assignment by the other party(ies) to each such
Assigned Contract, together with the originals of all the Assigned Contracts and
such consents that are in Seller’s possession or control, and evidence of the
termination of the Management Agreement;

(iv)    To the extent in Seller’s or its affiliates’ possession or readily
available to Seller or its affiliates, originals of all existing guarantees and
warranties issued in connection with the construction, improvement, alteration
or repair of the Real Property and in connection with the purchase or repair of
any Personalty, originals of all certificates of occupancy, licenses, permits,
authorizations, consents and approvals required in connection with the use and
occupancy of the Property, and any building plans and surveys concerning the
Property in Seller’s or its affiliates’ possession;

(v)  To the extent in Seller’s or its affiliates possession or readily available
to them, bills for current real estate and ad valorem taxes, sewer charges and
assessments, water charges and other utilities, charges under Assigned
Contracts, and other costs and expenses attributable to the operation of the
Property together with proof of payment thereof (to the extent the same have
been paid);

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(vi)    To the extent in Seller’s or its affiliates possession or readily
available to them, all records and files relating to the construction,
marketing, management, operation and maintenance of the Property and the Holiday
Inn;

(vii)   An affidavit from Seller and all other parties with a legal or equitable
interest in title to the Real Property, duly executed by them in accordance with
the Foreign Investment in Real Property Tax Act stating that each is not a
foreign person within the meaning of such Act and that each is not subject to
the withholding requirements set forth in such Act;

(viii)   An affidavit to Buyer’s Title Company of the type customarily provided
by sellers of real property to induce title companies in the Long Island City,
New York area to omit or insure over certain “standard” or “preprinted”
exceptions to title and to insure Buyer’s title as provided in Section 3, duly
executed by Seller and all other parties with a legal or equitable interest in
title to the Real Property, together with such other documents as may be
required by the Title Company to insure Buyer’s title as aforesaid;

(ix)    An affidavit, indemnification agreement or such other agreements as the
Buyer’s Title Company may reasonably require in order to remove any exception
from Buyer’s title insurance policy as a result of the sale of the Property by
Seller constituting a “bulk sale” for New York state tax purposes.

(x)  The Employee List described in Section 5(g) hereof;

(xi)    All keys to the Property;

(xii)   An original of a certificate, duly executed by Seller, stating that
Seller’s representations and warranties contained herein are true and correct in
all respects as of the date of Closing, such representations and warranties to
survive pursuant to such certificate for only a period of six (6) months after
Closing;

(xiii)   Such transfer tax forms required by law (“Transfer Forms”) duly
executed by Seller and all other parties with a legal title to the Real
Property;

(xiv)   An original of a closing statement setting forth the Purchase Price and
all adjustments thereto and other expenses payable by the parties pursuant
hereto (the "Closing Statement"), duly executed by Seller and all other parties
with a legal or equitable interest in title to the Real Property;

(xv)    An assignment or assignments, and such other affidavits and other
documents as may be required pursuant to Section 275 of the Real Property Law of
the State of New York, as appropriate, in order to provide Buyer’s lender, at
Buyer’s option, with an assignment by Seller’s mortgagee of Seller’s mortgage;

(xvi)   Evidence of due formation, authorization and good standing of Seller, as
well as payment of franchise and other corporate taxes which may become a lien
against the Property, as may reasonably be required by the Title Company; and

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(xvii)       Any other documents required by this Agreement to be delivered by
Seller to Buyer or in order to consummate the transactions contemplated hereby.

(b)   Buyer’s Deliveries. At Closing Buyer shall deliver or cause to be
delivered to Seller the following:

(i)  The Assignment and Assumption where-by Buyer assumes the obligations of
Seller under the Assigned Contracts accruing on and after the date of Closing,
duly executed by Buyer;

(ii)    All required Transfer Forms duly executed by Buyer;

(iii)   A Closing Statement duly executed by Buyer; and

(iv)   Any other documents required by this Agreement to be delivered by Buyer
to Seller.

9.   Apportionments; Closing Costs.

(a)    Apportionments. All apportionments shall be made on the basis of a 30-day
month and a 360-day year. Room revenues, real estate taxes, hotel occupancy,
guest bed and similar taxes, charges for electricity, water, sewer, gas, fuel
oil and other utilities for the Real Property, prepaid charges and other items
typically apportioned between purchasers and sellers in similar transactions
(including, without limitation, charges under the Assigned Contracts), not
otherwise apportioned hereunder, shall be apportioned as of 12:01 a.m. on the
date of Closing.

(b)    Closing Costs. All realty transfer taxes or documentary stamp taxes and
recording charges for the Deed shall be paid by Buyer. Each party shall bear its
own counsel fees. Buyer shall pay for its own title insurance, the cost of any
survey obtained by Buyer, and the cost of any inspections undertaken by Buyer.
All other recording and other closing costs of any nature or description shall
be borne or apportioned in accordance with the custom and practice in Long
Island City, New York. At Closing, Buyer shall pay to Seller the amounts of the
Escrow Accounts, as defined in Section 5(h) hereof.

(c)    Prepayments. Seller shall credit the Purchase Price at Closing with the
amount of any deposits, security deposits or other sums paid in advance by any
guest or customer of the Property, including, without limitation, sums paid on
account of services to be provided at the Property after Closing, such as, by
way of example, parties and banquets.

(d)    Accounts Receivable. Accounts receivable which have accrued as of Closing
and which Buyer receives after Closing shall be remitted to Seller promptly
after receipt by Buyer. Buyer will use its best efforts to collect such accounts
receivable at Seller’s direction, and cooperate with Seller in Seller’s
collection efforts; provided, however, that Buyer shall have no obligation to
institute suit for collection on Seller’s behalf or to apply proceeds received
from account debtors to Seller’s accounts receivable prior to payment of Buyer’s
accounts receivable, if any, from such debtors.

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(e)    Revenues and Expenses Generally. Except as otherwise expressly set forth
herein or agreed between the parties, (i) all revenues and expenses resulting
from the ownership of the Property, the rendering of services and the operation
of the Property prior to Closing shall inure to Seller, and all revenues and
expenses resulting from the ownership of the Property, the rendering of services
and the operation of the Property received on or after Closing shall inure to
Buyer, and (ii) if a party hereto collects an item of revenue which, pursuant to
the preceding sentence, properly belongs to another party (“Owning Party”), the
collecting party will hold such item as the agent of Owning Party and will
promptly remit such item to Owning Party at the earliest possible opportunity.

The terms of this Section 9 shall survive Closing.

10.       Conditions Precedent to Performance by Buyer. Buyer’s obligation to
consummate the transactions contemplated herein are expressly subject to the
satisfaction of the following conditions, provided that all or any part thereof
may be expressly waived by Buyer in writing:
 

(a)  Title. Title to the Property shall be as provided in Section 3.

(b)  Franchise. Buyer agrees to apply to continue use of the Holiday Inn
franchise at the Property, by taking such steps as are necessary for the
franchiser of Holiday Inn, Intercontinental Hotels Group, Inc.
(“Intercontinental”), to consider Buyer as a franchisee, within fifteen (15)
days following the Effective Date. It is a condition of this Agreement that
Buyer shall have received approval from Intercontinental to continue the
operation of the Property as a Holiday Inn following Buyer’s acquisition thereof
with such approval to be in writing and to contain no conditions other than
completion of a property improvement plan which details the improvements that
need to be made to the Property by Buyer within a specified time period
following Buyer’s acquisition of the Property (the “PIP”). Buyer shall use good
faith efforts to obtain, and shall diligently pursue, such approval from
Intercontinental. If Intercontinental denies Buyer’s application as a
franchisee, in writing, Buyer may terminate this Agreement.

(c)  Financing. GE Capital Franchise Corporation (“Lender”) has issued a
financing proposal to Buyer dated March 29, 2005 in connection with Buyer’s
application for a $7,125,000 loan (the “Loan”) from Lender in order for Buyer to
finance the purchase of the Property. Buyer has accepted the financing proposal
and has delivered the required deposit set forth therein to Lender in order for
Lender to proceed with its underwriting process for approval of the Loan. It is
a condition of this Agreement that the Lender shall have approved, in writing,
as evidenced by the issuance of a commitment letter to Buyer, the granting of
the Loan to Buyer in accordance with the terms of the financing proposal. Buyer
agrees to take such steps as are necessary for the Lender to approve the Loan
and to issue a commitment letter to Buyer. If Lender denies Buyer’s procurement
of the Loan, in writing, Buyer may terminate this Agreement.

(d)  Delivery of Financing. In the event that Buyer shall have obtained a
written commitment from the Lender for the Loan, Buyer shall receive the Loan at
Closing.

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In the event that the conditions set forth in Sections 10(a) through (d) are not
satisfied, then Buyer may terminate this Agreement by notice to Seller, in which
event the Deposit plus accrued interest thereon, shall be immediately returned
by Seller to Buyer, and Buyer and Seller shall have no further liabilities or
obligations hereunder. In the event that the Buyer fails to terminate the
Agreement on account of a failure of a condition within the applicable period
pursuant to the terms of this Section 10, then Buyer shall be deemed to have
waived its rights to do so on account of the failure of such condition and the
Deposit shall be fully nonrefundable to Buyer on account of a failure of such
condition, except in the event the Seller is in default under its obligations
under the Agreement or there is a breach of Seller’s representations or
warranties under this Agreement or in the event the Agreement is terminated
pursuant to the terms of Section 12 hereof or pursuant to any other provision in
the Agreement which entitles Buyer to terminate this Agreement. The terms of
this paragraph shall survive the termination of this Agreement.

11.  Conditions Precedent to Performance by Seller. Seller’s obligation to
consummate the transactions contemplated herein is expressly subject to Buyer
having duly performed and complied with all covenants, agreements and conditions
required by this Agreement to be performed or complied with by it before or at
Closing.

12.  Fire, Eminent Domain, etc. Seller shall bear the risk of all loss or damage
to the Property from all causes, and the risk of condemnation proceedings or
other proceedings in the nature of eminent domain, until Closing. If at any time
prior to the date of Closing any portion of the Property is destroyed or damaged
as a result of fire or any other casualty whatsoever, or Seller is notified of
any condemnation proceedings or other proceedings in the nature of eminent
domain against any portion of the Property, Seller shall, within three (3)
business days thereof (but not later than Closing), give written notice thereof
to Buyer and (a) the deadline for Closing shall be extended to the later of the
Casualty Termination Date or the date specified in Section 4 hereof, and (b)
Buyer shall have the right no later than thirty (30) days after receipt of such
notice (“Casualty Termination Date”), at its sole option, to terminate this
Agreement, in which event this Agreement shall become null and void, the Deposit
shall be immediately returned by Seller to Buyer, and neither party shall have
any further liabilities or obligations hereunder.

13.  Broker. Seller and Buyer each represent and warrant to the other that each
has had no dealings, negotiations or communications with any brokers or other
intermediaries in connection with this Agreement or the sale of the Property. In
the event that any claim is asserted by any person, firm or corporation, whether
broker or otherwise, claiming a commission and/or finder’s fee with respect to
the sale and purchase of the Property resulting from any act, representation or
promise of Seller, Seller shall indemnify and save harmless Buyer from any such
claim, and in the event any such claim shall be made against Seller resulting
from any act, representation or promise of Buyer with respect to such sale and
purchase, Buyer shall likewise indemnify and save harmless Seller from any such
claim. The terms of this Section 13 shall survive Closing or the earlier
termination of this Agreement.

14.  Provisions Regarding Deposits and Defaults.

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(a)  Seller’s Default. In the event Seller violates or fails to fulfill or
perform any of the terms and conditions of this Agreement required to be
performed by Seller, or breaches any representation or warranty contained in
this Agreement and made by Seller, the Deposit shall be immediately returned by
Seller to Buyer, together with all interest accrued thereon, and Buyer shall
also have the right to (i) obtain specific performance by Seller of this
Agreement and/or (ii) terminate this Agree-ment.

(b)  Buyer’s Default. In the event Buyer violates or fails to fulfill or perform
any of the terms and condi-tions of this Agreement required to be performed by
Buyer, Seller shall retain the Deposit as liquidated damages, which it is agreed
are not a penalty and are a fair determination of Seller’s damages, due to the
difficulty in assessing the actual amount of such damages should they accrue.
Receipt of such payment shall be Seller’s sole and ex-clusive remedy for such
default by Buyer and this Agree-ment shall thereupon be-come null and void, and
neither party shall have any further ob-ligations or liabilities hereunder.

The terms of this Section 14 shall survive Closing or the earlier termination of
this Agreement.
 

15.       Miscellaneous.

(a)    Headings. The headings and captions in this Agreement are inserted for
convenience of reference only and in no way define, describe or limit the scope
or intent of this Agreement or any of the provisions hereof.

(b)    Authority. The individuals who have executed this Agreement on behalf of
Seller and/or Buyer hereby represent, warrant and confirm that they have the
authority to execute this Agreement.

(c)    Recordation. This Agreement shall not be recorded in any office for the
recording of deeds or in any other office or place of public record.

(d)    Tender Waived. Formal tender of an executed deed and purchase money is
hereby waived.

(e)    Integration; Amendment. This Agreement contains the entire agreement
between the Seller and the Buyer and there are no other terms, obligations,
covenants, representations, statements or conditions, oral or otherwise, of any
kind whatsoever concerning this sale and purchase. Furthermore, this Agreement
shall not be altered, amended, changed or modified except in writing executed by
the parties hereto.

(f)    Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.

(g)    Interest. For the purposes of this Agreement, the Deposit shall be held
in an interest bearing federal account, with all accrued interest thereon being
promptly payable to the party entitled to the Deposit under the terms of this
Agreement.

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(h)    Notices. All notices hereunder shall be in writing and shall be deemed to
have been properly given if personally delivered, sent by certified mail, return
receipt requested, postage prepaid, or by private overnight express carrier,
such as Federal Express, next day delivery, charges paid, or delivered by
telecopy, addressed as follows:

If to Seller:
Metro Two Hotel. LLC
 
148 Sheraton Drive, Box A
 
New Cumberland, PA 17070
 
Attention: Kiran P. Patel
 
Telecopy No.: (717) 774-7383
   
With a copy to:
Shah & Byler, LLP
 
Penn Mutual Towers
 
510 Walnut Street, 9th Floor
 
Philadelphia, PA 19106
 
Attention: Lok Mohapatra, Esquire
 
Telecopy No.: (215) 238-0157
   
If to Buyer:
CNR Queen Hospitality, LLC
 
c/o Mr. Nick Patel
 
Dunkin' Donuts
 
701 Philadelphia Pike
 
Wilmington, DE 19809
 
Telecopy No.: (302) 762-8974
   
With a copy to:
Mark L. Morris, Esquire
 
Fox Rothschild LLP
 
2000 Market Street, 10th Floor
 
Philadelphia, PA 19103
 
Telecopy No.: (215) 299-2150

or to such additional persons or addresses as Seller and Buyer may from time to
time designate by notice to the other given pursuant to this Section 15(h).
Notices by the parties may be given on their behalf by their respective counsel.
Notice shall be deemed to have been given upon the date of delivery, if
personally delivered, three (3) days after the postmarked date of mailing if
sent by certified mail, one business day after the date of deposit if sent by
private overnight express carrier, or when received as confirmed by evidence of
transmission, if sent by telecopy.

(i)    Cooperation. At any time from and after Closing, upon the request of the
other party, Buyer and Seller will cooperate with each other and do, execute,
acknowledge and deliver, or cause to be delivered, all such further acts, deeds,
bills of sale, assignments, conveyances, powers of attorney and other documents
as may be required to carry out the provisions of this Agreement.

(j)    Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which, taken together, shall
constitute one and the same instrument.

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(k)    Time of the Essence. All times, wherever specified herein for the
performance by Seller or Buyer of their respective obligations hereunder, are of
the essence of this Agreement.

(l)     Exhibits. All Exhibits referred to herein and which are attached hereto
or bound separately and initialed by the parties are expressly made and
constitute a part of this Agreement.

(m)   Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns. Buyer may assign Buyer’s right, title
and interest in and to this Agreement to a corporation, limited liability
company, partnership or other entity controlled by Buyer or Buyer and Buyer’s
relatives, in which event the assignee shall be the sole “Buyer” for all
purposes under this Agreement.

16.       1099 S Tax Filing Information. In accordance with Internal Revenue
Code, Section 6045(e), under the Tax Reform Act of 1986, information must be
supplied to the Internal Revenue Service regarding all real estate transactions.
In compliance with this Act the document attached hereto and made a part hereof
as Exhibit "I" shall be completed and executed by the Seller and Buyer with the
signing of this Agreement. It is also understood and agreed that in the event
the Buyer's lender or the Title Company does not designate itself as the
reporting agent, the Buyer's attorney shall report the information needed to
comply with said Section 6045(e).

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
 

 
SELLER:
       
METRO TWO HOTEL, LLC
             
By:
   
Name:
   
Title:
         
BUYER:
         
CNR QUEENS HOSPITALITY, LLC
       
By:
CNR Queens Hospitality Manager, LLC
       
By:
  
   
Nilesh Patel, Member
       
By:
  
   
Chandresh Patel, Member

 
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JOINDER

In addition, the undersigned, for good and valuable consideration and intending
to be legally bound, hereby joins in the foregoing Agreement for the purpose of
guaranteeing to Buyer that the undersigned shall and hereby agrees to indemnify,
defend and save the Buyer, its members, officers, employees, agents,
supervisors, attorneys and consultants harmless from any and all claims, suits,
demands, fines, liens, causes of action, awards or damages in either law or
equity, which occur or originate within twelve months following the date of
Closing under this Agreement and which arise directly as a result of matters,
occurrences or events which directly resulted in the original imposition of the
Environmental Liens, attached as Exhibit “H” hereto, filed against the Property,
the same to include but not be limited to reasonable attorney fees, consultant’s
fees, expert witness fees, and costs incurred by Buyer, its members, officers,
employees, agents, supervisors, attorneys and consultants in defending against
or removing such claims, suits, demands, fines, liens, causes of action, awards
or damages; provided that Buyer shall provide to Seller written notice within 10
days of receipt of notice of any and all claims, suits, demands, fines, liens,
causes of action, awards or damages for which Buyer seeks indemnification, and
further provided that Buyer shall give such notice within the aforementioned
twelve month period. The indemnification provided herein shall not extend to
claims, suits, demands, fines, liens, causes of action, awards or damages first
filed against or imposed upon Buyer after the aforesaid twelve month period even
if the underlying cause of the claims, suits, demands, fines, liens, causes of
action, awards or damages existed during such twelve month period.

 
HERSHA HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited partnership
         
By:
   
 
Name:

 
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