Other Related Documents Two contracts of sale were executed on July 18, 2002. One was for the adjoining parcel (Block 225, Lot 8), and designated the seller as Shan Realty and the buyer as Sharma. It specified a purchase price for that lot of $275,000. The companion contract was for the Inn and the land at 539 Absecon Boulevard (Block 225, Lots 9 and 10) ("the Inn contract"), and designated the seller as Shan Enterprises and the buyer as Sharma. The purchase price for this portion of the transaction was $5,725,000, allocated as follows: $2,300,000 for the premises and improvements; $175,000 for personal property; and $3,250,000 for good will. Under these two contracts, the combined purchase price for the transaction was $6 million.
With respect to the Inn contract, Sharma paid a deposit of $100,000. The parties contemplated that at closing Sharma would pay an additional $5,050,000 by check and that he would also sign two notes, one for $250,000 and one for $325,000. Both notes were to be subordinate to a first mortgage on the property, in an amount not to exceed $3,900,000.
The "due diligence" section of the Inn contract referred to environmental and engineering due diligence. It also provided that the transfer of the Inn's franchise agreement was a condition of the sale.
Section 9.06 of the Inn contract, entitled "Buyer's Acknowledgments," provided as follows:
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, BUYER ACKNOWLEDGES THAT BUYER HAS MADE OR HAS CAUSED TO BE MADE A THOROUGH PHYSICAL AND ENVIRONMENTAL EXAMINATION AND INSPECTION OF THE PROJECT AND IS NOW FAMILIAR WITH THE PHYSICAL AND ENVIRONMENTAL CONDITION THEREOF AND HAS INDEPENDENTLY INVESTIGATED, ANALYZED AND APPRAISED THE VALUE AND PROFITABILITY OF THE PROJECT. BUYER ACKNOWLEDGES AND AGREES THAT BUYER HAS ENTERED INTO THIS AGREEMENT WITHOUT ANY REPRESENTATIONS AND WARRANTIES HAVING BEEN MADE BY SELLER, ANY AGENT OR EMPLOYEE OF SELLER OR ANY BROKER, IF ANY, ACTING FOR SELLER OR ANY OTHER PERSON OR PERSONS, AS TO THE PRESENT OR FUTURE PHYSICAL OR ENVIRONMENTAL CONDITION OF THE PROJECT, THE STATUS OF TITLE, INCOME, LEASES, EXPENSES, OPERATION, SIZE, ZONING OR ANY OTHER MATTER OR THING WHOSOEVER [sic] AFFECTING OR RELATING TO THE PROJECT, EXCEPT TO THE EXTENT, IF ANY, SPECIFICALLY SET FORTH IN THIS AGREEMENT. EXCEPT AS MAY OTHERWISE BE EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER FURTHER AGREES TO ACCEPT THE PROJECT "AS IS, WHERE IS" IN THE CONDITION ON THE DATE OF THIS AGREEMENT, SUBJECT TO NORMAL WEAR AND TEAR AND DAMAGE *849 BY THE ELEMENTS FROM THE DATE HEREOF TO THE CLOSING DATE. [(Emphasis added).] In addition, the Inn contract contained a "Disclaimer" provision at Section 11.04, which provided as follows:
A. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, BUYER ACKNOWLEDGES THAT IT HAS EXAMINED THE PROJECT AND IS BUYING ALL OF THE PROJECT "AS IS, WHERE IS", WITHOUT WARRANTY OR REPRESENTATION OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF FITNESS OF THE PROJECT FOR A PARTICULAR USE, WHETHER BY SELLER, OR