Document:

Exhibit 10.1

Exhibit
10.1

 

 

 

AGREEMENT
OF PURCHASE AND SALE

by
and between

METRO
TWO HOTEL, LLC (the “Seller”)

and

 

CNR
QUEENS HOSPITALITY, LLC

(the
“Buyer”)

 

 

 

 

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

(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.

5

(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.

6

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);

8

(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

9

(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.

10

(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.

11

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.

12

(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.

13

(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.

14

(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).

15

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

 

16

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:

 

17Exhibit 10.2

Exhibit
10.2

 

 

 

 

PURCHASE
AND SALE AGREEMENT

dated as
of May 13, 2005

 

between

5544
JFK III ASSOCIATES

as
Seller,

and

 

METRO
SAI HOSPITALITY L.L.C.

as
Purchaser

IN
CONNECTION WITH THE SALE AND PURCHASE OF THE 

DOUBLETREE
CLUB HOTEL, JAMAICA, NEW YORK

 

 

 

 

PURCHASE
AND SALE AGREEMENT

 

THIS
PURCHASE AND SALE AGREEMENT, dated as of the 13th day of May, 2005, (the
“Agreement”) between 5544 JFK III ASSOCIATES, a Pennsylvania limited partnership
(“Seller”), and METRO SAI HOSPITALITY L.L.C., a New York limited liability
company (“Purchaser”), provides:

ARTICLE
I

DEFINITIONS;
RULES OF CONSTRUCTION

1.1   Definitions.
The following terms shall have the indicated meanings:

 

“Act
of Bankruptcy” shall mean if a party hereto or any member or general partner
thereof shall (a) apply for or consent to the appointment of, or the taking
of possession by, a receiver, custodian, trustee or liquidator of itself or of
all or a substantial part of its property, (b) admit in writing its
inability to pay its debts as they become due, (c) make a general
assignment for the benefit of its creditors, (d) file a voluntary petition
or commence a voluntary case or proceeding under the Federal Bankruptcy Code (as
now or hereafter in effect), (e) be adjudicated a bankrupt or insolvent,
(f) file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up or composition or adjustment
of debts, (g) fail to controvert in a timely and appropriate manner, or
acquiesce in writing to, any petition filed against it in an involuntary case or
proceeding under the Federal Bankruptcy Code (as now or hereafter in effect), or
(h) take any corporate or limited liability company action for the purpose
of effecting any of the foregoing; or if a proceeding or case shall be
commenced, without the application or consent of a party hereto or any general
partner thereof, in any court of competent jurisdiction seeking (1) the
liquidation, reorganization, dissolution or winding-up, or the composition or
readjustment of debts, of such party or general partner, (2) the
appointment of a receiver, custodian, trustee or liquidator or such party or
general partner or all or any substantial part of its assets, or (3) other
similar relief under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts, and such proceeding or case
shall continue undismissed; or an order (including an order for relief entered
in an involuntary case under the Federal Bankruptcy Code, as now or hereafter in
effect) judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of 60 consecutive
days.

“Assignment
and Assumption Agreement” shall mean that certain Assignment and Assumption
Agreement, dated as of the Closing Date by and between Seller and Purchaser,
whereby Seller assigns and Purchaser assumes all of Seller’s right, title and
interest in, to and under all licenses, contracts, leases, permits and
agreements affecting the Property, including, without limitation, the Leases and
Operating Agreements, and all warranties and guarantees from any contractors,
subcontractors, manufacturers, and suppliers with respect to the Improvements.

“Authorizations”
shall mean all licenses, permits and approvals required by any governmental or
quasi-governmental agency, body or officer for the ownership, operation and use
of the Property or any part thereof.

 

“Closing” shall
mean the closing of the sale and acquisition of the Property pursuant to this
Agreement.

 

“Closing
Date” shall
mean the date on which the Closing occurs.

 

“Consideration” shall
mean $11,500,000.00.

 

“Continuing
Liabilities” shall
include liabilities arising under Operating Agreements, Leases, equipment leases
or related to the operation of the Hotel on and subsequent to the Closing Date,
or proration credits at Closing.

“Deposit” shall
mean the amount of Five Hundred Thousand and No/100 Dollars ($500,000.00).

 

“Employment
Agreements” shall
mean any and all employment agreements, written or oral, between the Seller or
its managing agent and the persons employed with respect to the Property.

 

“Escrow
Agent” shall
mean Summit Associates, 100 Lafayette Street, 3rd Floor,
New York, New York 10013.

 

"Excluded
Assets" shall
mean:

(a)  all cash,
bank accounts and money invested with financial institutions and other liquid
assets of the Seller;

(b)  any
interest in and to any refund of Taxes of the Seller for any period and any
interest in and to any refund of Taxes relating to the Hotel or its operations,
prior to the Closing;

(c)  all
credits, claims for refund, prepaid expenses, deferred charges, escrow accounts,
advance payments, security or other deposits, including recoverable deposits,
and prepaid items (and, in each case, security interests relating thereto)
arising from or in connection with, or related to, the Seller, its contracts or
assets;

(d)  all
claims or rights against any Person of the Seller arising prior to Closing
date;

(e)  all
insurance policies owned by the Seller and all rights, claims, proceeds and
causes of action of the Seller under insurance policies and all rights in the
nature of insurance, indemnification or contribution relating to the Seller or
its property;

(f)  all of
Seller’s rights under this Agreement and any other agreement to sell assets of
the Seller now existing or in the future and all cash and non-cash consideration
payable or deliverable to Seller pursuant to the terms and provisions hereof and
thereof;

(g)  all books
and records of the Seller that do not relate primarily to the Hotel, financial
statements, and accounting ledgers, records, and work-papers;

(h)  Management
proprietary system; 

(i)
  All
computers, including but not limited to the computer in the General Manager’s
office and the computer in the Sales Office; provided that the computers in the
Business Center shall not be excluded;

(j)
 
Minivan;

(k)  Fax/copier/printer
machine in General Manager’s office;

(l)
 
Timeclock

(m)     
All
manuals, files, and employee records of Seller and/or HHMLP (as defined in
Section 3.12).

(n)  License
(unless Purchaser obtains consent of Franchisor approving a transfer of the
License to Purchaser); and

(o)  liquor
license.

 

“Existing
Financing” shall
mean, collectively, that certain
financing by GE Capital to Seller with an outstanding principle balance of
approximately $7,903,679.74;
the exact amount of which shall be set forth on the settlement statement at
Closing.

“FIRPTA
Certificate” shall
mean the affidavit of the Seller under Section 1445 of the Internal Revenue
Code certifying that Seller is not a foreign corporation, foreign Seller,
foreign limited liability company, foreign trust, foreign estate or foreign
person (as those terms are defined in the Internal Revenue Code and the Income
Tax Regulations), in form and substance satisfactory to the Purchaser.

 

“Governmental
Body” means
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign.

 “Hotel” shall
mean the 110-room Doubletree Club hotel and related amenities located on the
Land.

 

“Improvements” shall
mean the Hotel and all other buildings, improvements, fixtures and other items
of real estate located on the Land.

 “Insurance
Policies” shall
mean those certain policies of insurance described on Exhibit C attached
hereto.

 

 

“Intangible
Personal Property” shall
mean all intangible personal property owned or possessed by the Seller and used
in connection with the ownership, operation, leasing, occupancy or maintenance
of the Property (other than the Excluded Assets, the License and the liquor
license), including, without limitation, the Authorizations, general
intangibles, business records, plans and specifications, surveys and title
insurance policies pertaining to the real property and the personal property,
all other licenses which are transferable, permits and approvals with respect to
the construction, ownership, operation, leasing, occupancy or maintenance of the
Property, any unpaid award for taking by condemnation or any damage to the Land
by reason of a change of grade or location of or access to any street or
highway, excluding (a) the Excluded Assets which shall be maintained and/or
distributed to Seller prior to the Closing Date and (b) any of the
aforesaid rights the Purchaser elect not to acquire. 

“Inventory” shall
mean all inventory located at the Hotel, including without limitation, all
mattresses, pillows, bed linens, towels, paper goods, soaps, cleaning supplies
and other such supplies.

 

"Knowledge" shall
mean the actual knowledge of the Seller.

 “Land” shall
mean that certain parcel of real estate lying and being in the Borough of Queens
and City of Jamaica, New York, as more particularly described on Exhibit A attached
hereto, together with all easements, rights, privileges, remainders, reversions
and appurtenances thereunto belonging or in any way appertaining, and all of the
estate, right, title, interest, claim or demand whatsoever of the Seller
therein, in the streets and ways adjacent thereto and in the beds thereof,
either at law or in equity, in possession or expectancy, now or hereafter
acquired.

 

“Leases” shall
mean those leases of real property listed on Exhibit
D attached
hereto.

 

“Operating
Agreements” shall
mean the management agreements, service contracts, supply contracts, leases
(other than the Leases) and other agreements, if any, in effect with respect to
the construction, ownership, operation, occupancy or maintenance of the
Property. All of the Operating Agreements in force and effect as of the date
hereof are listed on Exhibit E attached
hereto.

 

“Owner's
Title Policy” shall
mean an owner's policy of title insurance or the applicable endorsement issued
to the Purchaser by the Title Company, dated as of the Closing Date, pursuant to
which the Title Company insures the Purchaser's ownership of fee simple title to
the Real Property (including the marketability thereof) subject only to
Permitted Title Exceptions. The Owner's Title Policy shall insure the Purchaser
in the amount of the Consideration and shall be acceptable in form and substance
to the Purchaser. The description of the Land in the Owner's Title Policy shall
be by courses and distances and shall be identical to the description shown on a
survey provided by the Seller to the Purchaser.

“Permitted
Title Exceptions” shall
mean those exceptions to title to the Real Property that are satisfactory to the
Purchaser as determined pursuant to Section 2.2.

 

“Property” shall
mean collectively the Land, Improvements, the Inventory, the Reservation System,
the Tangible Personal Property and the Intangible Personal
Property.

 

“Real
Property” shall
mean the Land and the Improvements.

 

“Reservation
System” shall
mean the Seller’s or the Hotel manager’s Reservation Terminal and Reservation
System equipment and software (other than the Management proprietary system), if
any.

“Study
Period” shall
mean a period preceding the date of execution of this Agreement, which period
has already expired.

“Tangible
Personal Property” shall
mean the items of tangible personal Property, other than the Excluded Assets,
consisting of all furniture, fixtures and equipment situated on, attached to, or
used in the operation of the Hotel, and all furniture, furnishings, equipment,
machinery, and other personal property of every kind located on or used in the
operation of the Hotel and owned by the Seller.

 

“Title
Commitment” shall
mean the commitment by the Title Company to issue the Owner's Title
Policy.

 

“Title
Company” shall
mean Summit
Associates, 100 Lafayette Street, 3rd Floor,
New York, New York 10013.

“Tray
Ledger” shall
mean the final night's room revenue (revenue from rooms occupied as of 12:01
a.m. on the Closing Date, exclusive of food, beverage, telephone and similar
charges which shall be retained by the Seller as part of the Excluded Assets),
including any sales taxes, room taxes or other taxes thereon.

 

“Utilities” shall
mean public sanitary and storm sewers, natural gas, telephone, public water
facilities, electrical facilities and all other utility facilities and services
necessary for the operation and occupancy of the Property as a
hotel.

1.2   Rules
of Construction. The
following rules shall apply to the construction and interpretation of this
Agreement:

 

(a)  Singular
words shall connote the plural number as well as the singular and vice versa,
and the masculine shall include the feminine and the neuter.

 

(b)  All
references herein to particular articles, sections, subsections, clauses or
exhibits are references to articles, sections, subsections, clauses or exhibits
of this Agreement.

 

(c)  Headings
contained herein are solely for convenience of reference and shall not
constitute a part of this Agreement nor shall they affect its meaning,
construction or effect.

 

 

(d)  Each
party hereto and its counsel have reviewed and revised (or requested revisions
of) this Agreement, and therefore any usual rules of construction requiring that
ambiguities are to be resolved against a particular party shall not be
applicable in the construction and interpretation of this Agreement or any
exhibits hereto.

 

ARTICLE
II

PURCHASE
AND SALE; STUDY PERIOD;

PAYMENT
OF CONSIDERATION

2.1   Purchase
and Sale. In
consideration of the payment of the Consideration by Purchaser to Seller, Seller
agrees to sell, assign and transfer the Property to Purchaser and Purchaser
agrees to purchase the Property, in accordance with the terms and conditions set
forth herein. 

(a)   The
Consideration shall be paid as follows:

(i)  Purchaser
has deposited the Deposit in an interest bearing account, which is and shall be
fully refundable in accordance with the provisions with respect to the refund
thereof as set forth in this Agreement, including, without limitation,
unsatisfactory results of the Study Period, in Purchaser’s sole discretion,
and/or default by Seller hereunder; and

(ii)  The
balance of the Consideration, subject to adjustment as provided in this
Agreement, shall be paid by the Purchaser by wire transfer to the Seller or such
payee as the Seller may direct at the Closing. The Seller shall provide
Purchaser on or before the Closing with Seller’s wiring instructions for the
payment of the Consideration. 

	 	
      (b)
	
      The
      Consideration shall be held by the Escrow Agent to be released to Seller
      upon delivery of the certificates, documents, instruments, agreements and
      other closing deliveries required by this
Agreement.

2.2   Study
Period. 

(a)   The
Purchaser shall have the right, until the end of the Study Period, to enter upon
the Real Property and to perform, at the Purchaser's expense, such economic,
surveying, engineering, environmental, topographic and marketing tests, studies
and investigations as the Purchaser may deem appropriate provided Purchaser
gives Seller at least twenty-four (24) hours notice prior to entering on the
Real Property. The Purchaser shall investigate the
Property and the Seller, including, without limitation, a full environmental due
diligence audit and investigation of the Property and UCC, lien, litigation,
judgment and bankruptcy searches on the Seller. If such
tests, studies and investigations warrant, in the Purchaser' sole, absolute and
unbelievable discretion, the purchase of the Interests for the purposes
contemplated by the Purchaser, then the Purchaser may elect to proceed to
Closing and shall so notify the Seller prior to the expiration of the Study
Period. If for any reason the Purchaser do not so notify the Seller of their
determination to proceed to Closing prior to the expiration of the Study Period,
or if the Purchaser notify the Seller, in writing, prior to the expiration of
the Study Period that it has determined not to proceed to Closing, this
Agreement automatically shall terminate, and the Purchaser shall be released
from any further liability or obligation under this Agreement other than
Purchaser's indemnification obligations given pursuant to this paragraph which
shall survive termination of this Agreement, and the Deposit together with
interest accrued thereon shall be immediately refunded to Purchaser. Purchaser
shall indemnify Seller for any loss, damage or liabilities arising our of
activities relating to the Study Period and Purchaser shall obtain an
insurance policy, in amounts and with a company, satisfactory to Seller and
naming the Seller as an additional insured prior to entry upon the
Property.

 

 

(b)   During
the Study Period, the Seller shall make available to the Purchaser, its agents,
auditors, engineers,
attorneys and other designees, for inspection copies of all existing
architectural and engineering studies, surveys, title insurance policies, zoning
and site plan materials, correspondence, environmental audits,
environmental report, zoning compliance, tax
returns, accounts, franchise
agreement, deed and operating and services contracts, and other
related materials or information if any, relating to the Property to the extent
they are available in Seller’s possession.

 

(c)   During
the Study Period, the Purchaser, at their expense, may cause an examination of
title to the Property to be made, and, prior to the expiration of the Study
Period, shall notify the Seller of any defects in title shown by such
examination that the Purchaser are unwilling to accept. The Seller shall notify
the Purchaser whether the Seller are willing to cure such defects and to proceed
to Closing. Seller may cure, but shall not be obligated to cure such defects. If
such defects consist of deeds of trust, mechanics' liens, tax liens or other
liens or charges in a fixed sum or capable of computation as a fixed sum, the
Seller, at their option, shall pay and discharge (in which event, the Escrow
Agent is authorized to pay and discharge at Closing) such defects at Closing. If
the Seller are unwilling or unable to cure any such defects by Closing, the
Purchaser shall elect (1) to waive such defects and proceed to Closing
without any abatement in the Consideration or (2) to terminate this
Agreement and receive a return of the Deposit with interest thereon. The Seller
shall, after the date of this Agreement, take all reasonable best efforts to
prevent the Property from being subjected to any liens, encumbrances, covenants,
conditions, restrictions, easements or other title matters or seek any zoning
changes or take any other action which may affect or modify the status of title
without the Purchaser' prior written consent, which consent shall not be
unreasonably withheld or delayed. All title matters revealed by the Purchaser's
title examination and not objected to by the Purchaser as provided above shall
be deemed Permitted Title Exceptions. If Purchaser shall fail to examine title
and notify the Seller of any such title objections by the end of the Study
Period, all such title exceptions (other than those rendering title unmarketable
and those that are to be paid at Closing as provided above and other than any
title exceptions first appearing after the date of Purchaser’s title
examination) shall be deemed Permitted Title Exceptions.

(d)   During
the Study Period, Seller shall make available to Purchaser copies of existing
Franchise Agreement and existing loan documents.

(e)   During
the Study Period, Purchaser
shall contact the Licensor, and obtain tentative approval of the transfer of the
franchise to Purchaser or its subsidiary or affiliate.

(f)   During
the Study Period, Purchaser
shall contact GE Capital, and obtain tentative approval of the
transfer/assumption of Seller’s loans, including mortgage loans, to/by Purchaser
or its subsidiary or affiliate.

 

ARTICLE
III

SELLER’S
REPRESENTATIONS, WARRANTIES AND COVENANTS

 

To induce
the Purchaser to enter into this Agreement and to purchase the Property, the
Seller hereby jointly and severally makes the following representations,
warranties and covenants, upon each of which Seller acknowledges and agrees that
Purchaser is entitled to rely and has relied upon:

3.1   Identity
and Power.

(a)   Seller is
and has all requisite powers and all governmental licenses, authorizations,
consents and approvals necessary to carry on its business as now conducted, to
execute and deliver this Agreement and any document or instrument required to be
executed and delivered on behalf of the Seller hereunder, to perform his
obligations under this Agreement and any such other documents or instruments and
to consummate the transactions contemplated hereby; and

(b)   Seller is
a Pennsylvania limited partnership duly organized, validly existing under the
laws of the Commonwealth of Pennsylvania, and has all requisite power and
authority under the laws of such Commonwealth and under its charter documents to
enter into and perform its obligations under this Agreement and to consummate
the transactions contemplated hereby. Seller has duly qualified and is in good
standing as a limited partnership in the State of New York.

3.2   Authorization,
No Violations and Notices.

 

(a)   The
execution, delivery and performance of this Agreement by Seller, and the
consummation of the transactions contemplated hereby have been duly authorized,
adopted and approved by the Seller as necessary. No other proceedings are
necessary to authorize this Agreement and the transactions contemplated hereby.
This Agreement has been duly executed by Seller and is a valid and binding
obligation enforceable against Seller in accordance with its terms.

 

(b)   Neither
the execution, delivery, or performance by Seller of this Agreement, nor the
consummation of the transactions contemplated hereby, nor compliance by Seller
with any of the provisions hereof, will,

 

 

(i)   except
for the terms of the Seller's Existing Financing, the License and the liquor
license, violate, conflict with, result in a breach of any provision of,
constitute a default (or an event that, which, with or lapse of time or both,
would constitute a default) under, result in the termination of, accelerate the
performance required by, or result in a right of termination or acceleration, or
the creation of any lien, security interest, charge, or encumbrance upon any of
the Property or assets of the Seller, under any of the terms, conditions, or
provisions of, the Certificate of Limited Partnership of such Seller (if
applicable), the Limited Partnership Agreement, license, lease, agreement, or
other instrument, or obligation to which the Seller is a party, or by which the
Seller may be bound, or to which the Seller or the Property or assets may be
subject; or

 

(ii)       
violate
any judgment, ruling, order, writ, injunction, decree, statute, rule, or
regulation applicable to the Seller or its Property or assets that would not be
violated by the execution, delivery or performance of this Agreement or the
transactions contemplated hereby by the Seller or compliance by the Seller with
any of the provisions hereof.

(c)   The
Seller has conducted no business other than the ownership of the
Property.

 

3.3   Litigation
With Respect to Seller. Except
as set forth on Exhibit
F there is
no action, suit or proceeding pending against or affecting the Seller or any
part of or interest in the Property in any court, before any arbitrator or
before or by any governmental agency which (a) in any manner raises any question
affecting the validity or enforceability of this Agreement or any other material
agreement or instrument to which the Seller is a party or by which it is bound
and that is or is to be used in connection with, or is contemplated by, this
Agreement, (b) could materially and adversely affect the business, financial
position or results of operations of the Seller, (c) could materially and
adversely affect the ability of the Seller to perform its obligations hereunder,
or under any document to be delivered pursuant hereto, or (d) could create a
lien on the Property. 

3.4   Property.

 

(a)   The
Property will be on the Closing Date, free and clear of all liens and
encumbrances, except for the Permitted Title Exceptions and the Existing
Financing, and the Seller has good, marketable title thereto and the right to
convey same. The Seller is the fee simple owner of the Real Property and the
sole owner of the Property.

(b)   The
assets of the Seller will be on the Closing Date, free and clear of all liens
and encumbrances, and the Seller has good and marketable title thereto and the
Seller has the right to convey same in accordance with the terms of this
Agreement.

3.5   Bankruptcy
with Respect to Seller. No Act
of Bankruptcy has occurred with respect to the Seller.

3.6   Brokerage
Commission. The
Seller have not engaged the services of, nor is it or will it become liable to,
any real estate agent, broker, finder or any other person or entity for any
brokerage or finder's fee, commission or other amount with respect to the
transaction described herein.

3.7   Intentionally
Omitted.

 

3.8   Intentionally
Omitted.

3.9   Intentionally
Omitted. 

 

3.10        
Contracts
and Agreements. There
is no loan agreement, guarantee, note, bond, indenture and other debt
instrument, lease and other contract to which the Seller is a party or by which
its assets are bound other than Permitted Title Exceptions, the Leases, the
Operating Agreements, and the loan documents respecting Existing Financing (the
“Existing Financing Documents”) with GE Commercial Finance Business Property
Corporation f/k/a General Electric Capital Business Asset Funding Corporation
(“Lender” or “GE Capital”), and such Existing Financing shall be assumed by
Purchaser as herein provided. 

3.11        
No
Special Taxes. The
Seller has no Knowledge of, nor has received any written notice of, any special
taxes or assessments relating to the Seller or Property or any part thereof or
any planned public improvements that may result in a special tax or assessment
against the Property.

3.12        
Compliance
with Existing Laws. The
Seller possesses all Authorizations, each of which is valid and in full force
and effect, and, to Seller’s Knowledge, no provision, condition or limitation of
any of the Authorizations has been breached or violated. Notwithstanding the
foregoing, and to the extent not prohibited by applicable law, the Seller’s
existing hotel manager, Hersha Hospitality Management, L.P. (“HHMLP”), and
Purchaser will enter into an Interim Beverage Service Agreement, in form and
substance acceptable to Seller, which will permit Purchaser to have use of
HHMLP’s liquor license from the Closing Date until the earlier of (i)
Purchaser's receipt of a new liquor license for the Hotel, or (ii) six (6)
months from the Closing Date. Purchaser shall bear all costs and expenses that
Seller or HHMLP may incur in connection with the transfer of the liquor license,
and Purchaser shall indemnify HHMLP and Seller for any losses, liabilities,
claims, actions, damages, and expenses in connection with Purchaser’s use of, or
activities involving, the liquor license.

3.13        
Operating
Agreements. No fact
or circumstance has occurred which, by itself or with the passage of time or the
giving of notice or both, would constitute a material default under any of the
Operating Agreements. Without the prior written consent of the Purchaser, which
consent will not be unreasonably withheld or delayed, the Seller shall not enter
into any new management agreement, maintenance or repair contract, supply
contract, lease in which it is lessee or other agreements with respect to the
Property, nor shall the Seller enter into any agreements modifying the Operating
Agreements.

3.14        
Warranties
and Guaranties. The
Seller shall not release or modify any warranties or guarantees, if any, of
manufacturers, suppliers and installers relating to the Improvements and the
Tangible Personal Property or any part thereof, except with the prior written
consent of the Purchaser, which consent shall not be unreasonably withheld or
delayed. A complete list of all such warranties and guaranties in effect as of
the date of this Agreement is attached hereto as Exhibit B.

3.15        
Intentionally
Omitted.

3.16        
Condemnation
Proceedings; Roadways. The
Seller has received no written notice of any condemnation or eminent domain
proceeding pending or threatened against the Property or any part thereof. The
Seller has no Knowledge of any change or proposed change in the route, grade or
width of, or otherwise affecting, any street or road adjacent to or serving the
Real Property.

3.17        
Labor
Disputes and Agreements. There
are not currently any labor disputes pending or, to Seller's knowledge,
threatened as to the operation or maintenance of the Property or any part
thereof. The Seller is not a party to any union or other collective bargaining
agreement with employees employed in connection with the ownership, operation or
maintenance of the Property. The employees of the Seller are at will employees.

3.18        
Financial
Information. To the
Seller’s Knowledge, except as otherwise disclosed in writing to the Purchaser
prior to the end of the Study Period, for each of the Seller’s accounting years,
when a given year is taken as a whole, all of the Seller’s financial information
previously delivered or to be delivered to the Purchaser is and shall be correct
and complete in all material respects. 

3.19        
Organizational
Documents. The
Seller’s Organizational Documents are in full force and effect and have not been
modified or supplemented, and no fact or circumstance has occurred that, by
itself or with the giving of notice or the passage of time or both, would
constitute a default thereunder.

3.20        
Operation
of Property. The
Seller covenant that between the date hereof and the date of Closing Seller
shall cause the Seller to (a) operate the Property only in the usual, regular
and ordinary manner consistent with the Seller’s prior practice, (b) maintain
the books of account and records in the usual, regular and ordinary manner, in
accordance with Seller’s accounting system, and (c) use all reasonable efforts
to preserve intact the present business organization, keep available the
services of the present officers and employees and preserve their relationships
with suppliers and others having business dealings with them. The Seller shall
continue to make good faith efforts to take guest room reservations and to book
functions and meetings and otherwise to promote the business of the Property in
generally the same manner as the Seller did prior to the execution of this
Agreement. 

3.21        
Judgments
and Liens. On the
Closing Date, the Seller will be free and clear of all judgments and
liens.

3.22        
Hazardous
Substances. Except
for matters in Seller’s or Purchaser's environmental reports and statements, and
except for Lender’s requirement for a “No Further Action” Letter, and except for
cleaning supplies and the like used in the ordinary course of Seller’s business,
Seller has no Knowledge of the presence of any “Hazardous Substances” (as
defined hereafter) on the Property presently occurring on or onto the Property,
and “Hazardous Substances” shall mean any substance or material whose presence,
nature, quantity or intensity of existence, use, manufacture, disposal,
transportation, spill, release or effect, either by itself or in combination
with other materials is either: (1) potentially injurious to the public
health, safety or welfare, the environment or the Property, (2) regulated,
monitored or defined as a hazardous or toxic substance or waste by any
Governmental Body, or (3) a basis for liability of the owner of the
Property to any Governmental Body or third party, and Hazardous Substances shall
include, but not be limited to, hydrocarbons, petroleum, gasoline, crude oil, or
any products, by-products or components thereof, and asbestos and toxic
mold.

3.23        
Room
Furnishings. All
public spaces, lobbies, meeting rooms, and each room in the Hotel available for
guest rental is furnished in accordance with Licensor's standards for the Hotel
and room type.

3.24        
License.

 

(a)          
The
license from Promus Hotels, Inc. (Doubletree Club) (the “Licensor”) with respect
to the Hotel (the “License”) is valid and in full force and effect, and on the
Closing Date Seller will not be in default with respect thereto (with or without
the giving of any required notice and/or lapse of time); however, the License
will not be transferable without Licensor's consent.

 

(b)          
Subject
to Purchaser obtaining Licensor's consent, neither the execution, delivery, or
performance by the Seller of this Agreement, nor the consummation of the
transactions contemplated hereby, nor compliance by the Seller with any of the
provisions hereof, will violate, conflict with, result in a breach of any
provision of, constitute a default (or an event that, with notice or lapse of
time or both, would constitute a default) under, result in the termination of,
or result in a right of termination under any of the terms, conditions, or
provisions of, the License.

3.25        
Access
to Financial Information. Seller
shall provide access to Purchaser's representatives to all financial and other
information relating to the Property, and shall provide Purchaser with detailed
financial reporting for the Hotel for the period beginning January 1, 2004 and
ending the Closing Date.

 

3.26        
Environmental
Matters. There
are no violations of any environmental laws relating to Hazardous Substances
respecting the Property or the Hotel. The
Seller has an obligation under the loan documents for the Existing Financing to
obtain a “No Further Action” Letter from the Department of Environmental Control
of New York City. 

3.27        
Leases. True,
complete copies of the Leases, are attached as Exhibit
D hereto.
The Leases are, and will at Closing be, in full force and effect, and Seller is
not in default and the Seller shall make good faith efforts not to be in default
with respect thereto (with or without the giving of any notice and/or lapse of
time). The Leases are, or will be at Closing, freely assignable by Seller and
Seller will have obtained all consents of any third party necessary to assign
the Leases to Purchaser.

3.28        
Noncontravention. Except
as provided in the loan documents, and in the franchise agreement with Licensor,
the execution and delivery of, and the performance by the Seller of their
respective obligations under this Agreement do not and will not contravene, or
constitute a default under, any provision of applicable law or regulation, or
any agreement, judgment, injunction, order, decree or other instrument binding
upon the Seller, or result in the creation of any lien or other encumbrance on
any asset of the Seller. 

 

ARTICLE
IV

PURCHASER'S
REPRESENTATIONS, WARRANTIES AND COVENANTS

 

To induce
the Seller to enter into this Agreement, the Purchaser hereby makes the
following representations, warranties and covenants, upon each of which the
Purchaser acknowledges and agrees that the Seller is entitled to rely and has
relied upon:

4.1   Identity
and Power.

(a)   Purchaser
is and has all requisite powers and all governmental licenses, authorizations,
consents and approvals necessary to carry on their respective business as now
conducted, to execute and deliver this Agreement and any document or instrument
required to be executed and delivered on behalf of the Purchaser hereunder, to
perform its obligations under this Agreement and any such other documents or
instruments and to consummate the transactions contemplated hereby;
and

(b)   Purchaser
is a New York limited liability company duly organized, validly existing under
the laws of the State of New York, and has all requisite power and authority
under the laws of such State and under its charter documents to enter into and
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby. Purchaser is in good standing as a limited liability
company in the State of New York.

4.2   Authorization,
No Violations and Notices.

(a)   The
execution, delivery and performance of this Agreement by Purchaser, and the
consummation of the transactions contemplated hereby have been duly authorized,
adopted and approved by the Purchaser as necessary. No other proceedings are
necessary to authorize this Agreement and the transactions contemplated hereby.
This Agreement has been duly executed by Purchaser and is a valid and binding
obligation enforceable against Purchaser in accordance with its
terms.

(b)   Neither
the execution, delivery, or performance by Purchaser of this Agreement, nor the
consummation of the transactions contemplated hereby, nor compliance by
Purchaser with any of the provisions hereof, will

(i)   result in
the termination of, accelerate the performance required by, or result in a right
of termination or acceleration, or the creation of any lien, security interest,
charge, or encumbrance upon the Purchaser or assets of the Purchaser, under any
of the terms, conditions, or provisions of, the Articles of Organization or the
Operating Agreement of Purchaser, license, lease, agreement, or other
instrument, or obligation to which the Purchaser is a party, or by which the
Purchaser may be bound, or to which the Purchaser or the Purchaser’s assets may
be subject; or

(ii)          
violate
any judgment, ruling, order, writ, injunction, decree, statute, rule, or
regulation applicable to the Purchaser or its assets.

4.3   Noncontravention. The
execution and delivery of this Agreement and the performance by the Purchaser of
its obligations hereunder do not and will not contravene, or constitute a
default under, any provisions of applicable law or regulation, or any agreement,
judgment, injunction, order, decree or other instrument binding upon Purchaser
or result in the creation of any lien or other encumbrance on any asset of
Purchaser.

4.4   Litigation. There
is no action, suit or proceeding, pending against the Purchaser, or Purchaser’s
assets, in any court or before any arbitrator or before any governmental body
which (a) in any manner raises any question affecting the validity or
enforceability of this Agreement or any other agreement or instrument to which
Purchaser is a party or by which either is bound and that is to be used in
connection with, or is contemplated by, this Agreement, (b) could
materially and adversely affect the ability of the Purchaser to perform their
obligations hereunder, or under any document to be delivered pursuant hereto, or
(c) could materially and adversely affect the business or financial position of
the Purchaser. 

4.5   Bankruptcy. No Act
of Bankruptcy has occurred with respect to the Purchaser.

4.6   No
Brokers. The
Purchaser has not engaged the services of, nor is it or will it become liable
to, any real estate agent, broker, finder or any other person or entity for any
brokerage or finder's fee, commission or other amount with respect to the
transaction described herein.

 

ARTICLE
V

CONDITIONS
AND ADDITIONAL COVENANTS

 

The
obligations of Seller and Purchaser hereunder are subject to the satisfaction of
the following conditions precedent and the compliance by the Seller and
Purchaser, as applicable, with the following covenants:

5.1   Seller’s
Deliveries. The
Seller shall have delivered to the Escrow Agent or the Purchaser, as the case
may be, on or before the Closing Date, all of the documents and other
information required of Seller pursuant to Section 6.2.

5.2   Representations,
Warranties and Covenants; Obligations of Seller; Certificate. All of
the Seller’s representations and warranties made in this Agreement shall be true
and correct as of the date hereof and as of the Closing Date as if then made,
the Seller shall have performed all of their material covenants and other
obligations under this Agreement, and the Seller shall have executed and
delivered to the Purchaser at Closing a certificate to the foregoing
effect.

5.3   Title
Insurance. Good
and indefeasible fee simple title to the Real Property shall be insurable as
such by the Title Company at or below its regularly scheduled rates subject only
to Permitted Title Exceptions as determined in accordance with Section 2.2.

5.4   Condition
of Improvements. The
Improvements and the Tangible Personal Property shall be in the same condition
at Closing as they are as of the date hereof, reasonable wear and tear excepted.
Except for the Excluded Assets which shall be distributed to the Seller prior to
the Closing Date, the Seller shall not have removed or caused or permitted to be
removed any part or portion of the Real Property or the Tangible Personal
Property unless the same is replaced, prior to Closing, with similar items of at
least equal quality and acceptable to the Purchaser.

5.5   Utilities. All of
the Utilities shall be installed in and operating at the Property, and service
shall be available for the removal of garbage and other waste from the
Property.

5.6   License. From
the date hereof to and including the Closing Date, Seller shall comply with and
perform all of the duties and obligations of licensee under the
License.

5.7   Intentionally
Omitted.

5.8   Franchise
License Contingency. As a
condition to Closing, Licensor
will approve the transfer of the franchise to Purchaser or its affiliate or
subsidiary.
Purchaser shall be responsible for obtaining, and shall use diligent efforts to
obtain, the franchise license with Licensor respecting the Hotel. Seller shall
use diligent efforts in assisting Purchaser in obtaining the franchise license
with Licensor, and shall fully cooperate with Purchaser's application and
pursuit of said franchise license with Licensor. In the event that Purchaser is
unable to obtain such franchise license from Licensor on or before the Closing
Date, then either (i) the parties hereto shall agree to extend the Closing Date
for thirty (30) days after the Closing Date, or (ii) Purchaser, at Purchaser's
sole option, may elect to terminate this Agreement and receive a refund of the
Deposit with interest thereon.

 

5.9.   Liquor
License. Seller
shall cooperate with Purchaser in endeavoring to allow Purchaser to use the
liquor
license for the Hotel to operate the facilities in the Hotel presently serving
liquor until Purchaser can obtain its own liquor license; provided, that,
Purchaser indemnifies Seller and HHMLP against any liability which may arise by
reason of Purchaser's use of the liquor license for the Hotel. The indemnity
must be in form and substance satisfactory to Seller; provided that Purchaser
shall promptly hereafter apply for and use reasonable efforts to procure such
license or licenses prior to the Closing, and provided further that in the event
that such approval shall not have been obtained, notwithstanding
the foregoing, and to the extent not prohibited by applicable law, Seller shall,
or shall cause HHMLP, to enter into an Interim Beverage Service Agreement with
Purchaser, in form and substance acceptable to Seller, which will permit
Purchaser to have use of the liquor license for the Hotel from the Closing Date
until the earlier of (i) Purchaser's receipt of a new liquor license for the
Hotel, or (ii) six (6) months from the Closing Date.

5.10.         
Existing
Financing.
Purchaser shall have the obligation to assume the Existing Financing at Closing,
and Purchaser shall bear all costs and expenses associated with the assumption
of the Existing Financing. 

5.11   Existing
Percentage Lease. Seller
shall cause the existing percentage lease with HHMLP to be terminated on the
Closing Date, and Seller shall be responsible for all fees and costs associated
with such termination. 

5.12   Capital
Reserves/PIP. Any
Licensor mandated capital expenditures at transfer shall be funded by the
Purchaser. The Seller shall retain all capital expenditure reserves.

5.13   Franchise
Agreement.
Purchaser
shall be solely responsible for any and all costs associated with the
termination or cancellation of Seller’s existing License with Licensor, the
transfer of such License to Purchaser, and/or the purchase of a new franchise
license from Licensor or another hotel franchisor. Seller
shall cooperate with Purchaser in Purchaser’s endeavor to obtain a franchise
license with Licensor. In the event the Hotel does not continue as a Doubletree
Club following the Closing and/or Purchaser elects to adopt a new franchise for
the Hotel, Seller shall have an absolute right to approve Purchaser’s new
franchise selection for the Hotel.

5.14   Intentionally
Omitted. 

5.15   Closing
Costs. On the
Closing Date, (a) Purchaser shall pay all costs and fees in connection with
Purchaser’s assumption of the Existing Financing and (b) Seller and Purchaser
shall pay equally the real estate transfer taxes.

ARTICLE
VI

CLOSING

6.1   Closing. Closing
shall be held at a location that is mutually acceptable to the parties, on May
13, 2005. 

6.2   Seller’s
Deliveries. At
Closing, the Seller shall deliver to Purchaser all of the following instruments,
each of which shall have been duly executed and, where applicable, acknowledged
on behalf of the Seller and shall be dated as of the date of
Closing:

 

(a)   Bargain
and Sale Deed (“Deed”).

(b)   The
Assignment and Assumption Agreement.

(c)   The
FIRPTA Certificate for the Seller who are eligible to execute such
certificate.

 

(d)   True,
correct and complete copies of all warranties, if any, of manufacturers,
suppliers and installers possessed by the Seller and relating to the
Improvements and the Personal Property, or any part thereof.

 

(e)   The
certificate required by Section 5.2..

 

(f)   Appropriate
consent of the Seller, authorizing (A) the execution of any documents to be
executed and delivered by the Seller prior to, at or otherwise in connection
with Closing and in connection with the transactions contemplated by this
Agreement, and (B) the performance by the Seller of its obligations
hereunder and under such documents.

 

(g)   Valid,
final and unconditional certificate(s) of occupancy for the Real Property and
Improvements, issued by the appropriate Governmental Body.

 

(h)   All
current real estate and personal property tax bills in the Seller's possession
or under its control.

 

(i)    A set of
all guest registration cards, guest transcripts, guest histories, and all other
available guest information.

 

(j)    A list of
advance room reservations, functions and the like, in reasonable detail so as to
enable the Purchaser to honor the Seller’s commitments in that
regard.

 

(k)   All keys
for the Property.

 

(l)    All
books, records, operating reports, appraisal reports, files and other materials
in the Seller’s possession or control.

 

(m)         
Such
proof, reasonably acceptable to the Seller evidencing the payment by Purchaser
and Seller of all transfer taxes, if any, incurred in connection with the
transactions contemplated by this Agreement. 

6.3   Purchaser's
Deliveries. At
Closing, the Purchaser shall pay or deliver to the Seller the
following:

 

(a)   The
Consideration, the amount equal to one-half the real estate transfer taxes, the
costs and fees associated with the assumption of the Existing Financing with
Lender, and other amounts owed by Purchaser at Closing pursuant
hereto;

 

(b)   The
Assignment and Assumption Agreement;

(c)   Proof of
assumption of the Existing Financing by Purchaser; 

(d)   Appropriate
consent of the Purchaser, authorizing (A) the execution of any documents to
be executed and delivered by the Purchaser prior to, at or otherwise in
connection with Closing and in connection with the transactions contemplated by
this Agreement, and (B) the performance by the Purchaser of its obligations
hereunder and under such documents; and

 

(e)   Any other
document or instrument reasonably requested by the Seller or required
hereby.

6.4   Closing
Costs. Real
estate transfer taxes due, if any, shall be paid equally by Purchaser and
Seller. All filing fees, recording or other similar taxes due with respect to
the transfer of the Property and all charges for title insurance premiums and
the assumption of the Existing Financing shall be paid by the Purchaser.

6.5   Income
and Expense Allocations. All
income and expenses with respect to the Property, determined in accordance with
United States generally accepted accounting principles consistently applied,
shall be allocated between the Seller and the Purchaser. The Seller shall be
entitled to all income (including all cash box receipts and cash credits for
unused expendables) which shall be part of the Excluded Assets, and responsible
for all expenses for the period of time up to but not including 12:01 a.m. on
the Closing Date, and the Purchaser shall be entitled to all income and
responsible for all expenses for the period of time from, after and including
12:01 a.m. on the Closing Date. Only
adjustments for ground rent, if applicable, and real estate taxes shall be shown
on the settlement statements (with such supporting documentation as the parties
hereto may require being attached as exhibits to the settlement statements) and
shall increase or decrease (as the case may be) the amount payable by the
Purchaser. All
other such adjustments shall be made by separate agreement between the parties
and shall be payable by check or wire transfer directly between the parties.
Without limiting the generality of the foregoing, the following items of income
and expense shall be allocated as of the Closing Date:

 

(a)   Current
and prepaid rents, including, without limitation, prepaid room receipts,
function receipts and other reservation receipts.

 

(b)   Real
estate and personal property taxes.

 

(c)   Amounts
under the Operating Agreements. 

 

(d)   Utility
charges (including but not limited to charges for water, sewer and
electricity).

 

(e)   Wages,
vacation pay, pension and welfare benefits and other fringe benefits of all
persons employed at the Property who the Purchaser elects to
employ.

 

(f)   All
prepaid reservations and contracts for rooms confirmed by Seller prior to the
Closing Date for dates after the Closing Date, all of which Purchaser shall
honor.

 

Purchaser
shall cooperate with Seller in the collection of any accounts receivable or
revenues accrued prior to the Closing Date for Seller, but if Purchaser collects
same, such amounts will be promptly remitted to Seller in the form
received.

 

 

If
accurate allocations cannot be made at Closing because current bills are not
obtainable (as, for example, in the case of utility bills or tax bills), the
parties shall allocate such income or expenses at Closing on the best available
information, subject to adjustment upon receipt of the final bill or other
evidence of the applicable income or expense. Any income received or expense
incurred by the Seller or the Purchaser with respect to the Property after the
date of Closing shall be promptly allocated in the manner described herein and
the parties shall promptly pay or reimburse any amount due. The Seller shall pay
at Closing all special assessments and taxes applicable to the Property which
are due on or before the Closing. 

ARTICLE
VII

CONDEMNATION;
RISK OF LOSS

7.1   Condemnation. In the
event of any actual or threatened taking, pursuant to the power of eminent
domain, of all or any portion of the Real Property, or any proposed sale in lieu
thereof, the Seller shall give written notice thereof to the Purchaser promptly
after the Seller learn or receive notice thereof. If all or any part of the Real
Property is, or is to be, so condemned or sold such that the Hotel cannot be
operated in the manner in which it currently is operated, the Purchaser shall
have the right to terminate this Agreement pursuant to Section 8.3. If the
Purchaser elects not to terminate this Agreement, all proceeds, awards and other
payments arising out of such condemnation or sale (actual or threatened) shall
be paid or assigned, as applicable, to the Purchaser at Closing.

7.2   Risk
of Loss. The
risk of any loss or damage to the Property prior to the Closing shall remain
upon the Seller. If any such loss or damage to more than twenty five percent
(25%) of the value of the Improvements occurs prior to Closing, the Purchaser
shall have the right to terminate this Agreement pursuant to Section 8.3. If the
Purchaser elects not to terminate this Agreement, all insurance proceeds and
rights to proceeds arising out of such loss or damage shall be paid or assigned,
as applicable, to the Purchaser at Closing.

 

ARTICLE
VIII

LIABILITY
OF PURCHASER; INDEMNIFICATION BY SELLER;

TERMINATION
RIGHTS

8.1   Liability
of Purchaser. Except
for any obligation expressly assumed or agreed to be assumed by the Purchaser
hereunder and in the Assignment and Assumption Agreement, the Purchaser do not
assume any obligation of the Seller or any liability for claims arising out of
any occurrence prior to Closing.

 

8.2   Termination
by Purchaser. If any
condition set forth herein cannot or will not be satisfied prior to Closing, or
upon the occurrence of any other event that would entitle the Purchaser to
terminate this Agreement and its obligations hereunder, and the Seller fails to
cure any such matter within five days after notice thereof from the Purchaser,
the Purchaser, at its option and as its sole remedy, shall elect either
(a) to terminate this Agreement and all other rights and obligations of the
Seller and the Purchaser hereunder shall terminate immediately, or (b) to
waive its right to terminate and, instead, to proceed to Closing. 

8.3   Termination
by Seller. If,
prior to Closing, the Purchaser’s default in performing any of their obligations
under this Agreement (including its obligation to purchase the Property), and
the Purchaser fails to cure any such default within five days after notice
thereof from the Seller, then the Seller’s sole remedy for such default shall be
to terminate this Agreement. Upon such termination, Seller shall be entitled to
receive the Deposit as LIQUIDATED DAMAGES in full and complete satisfaction of
any and all damages incurred by Seller on account of such default, it being
acknowledged and agreed that in the event of any such default it would be
difficult or impossible to ascertain the precise amount of such damages and the
amount of the Deposit are fair and reasonable estimates of the amount of such
damages. Upon notice to the Escrow Agent of Purchaser' default, the Escrow Agent
shall transfer the Deposit to Seller.

8.4.   Indemnification
by Purchaser.
Notwithstanding anything herein to the contrary, Purchaser
hereby indemnifies and holds Seller harmless from and against any and all
claims, costs, penalties, damages (including, but not limited to, liquidated
damages), losses, liabilities and expenses (including, but not limited to,
reasonable attorneys' fees), that may at any time be incurred by or claimed
against the Seller as a result of the termination, cancellation, or transfer of
the License or as a result of any violation or breach of the License. Purchaser
further indemnifies and holds Seller harmless from and against any and all
claims, costs, penalties, damages, losses, liabilities and expenses (including
reasonable attorneys' fees), that may at any time be incurred by or claimed
against the Seller as a result of any violation or breach of any of the Existing
Financing Documents with GE Capital, and Purchaser shall be solely responsible
for any and all costs and expenses associated with any such violation or breach
of any of the Existing Financing Documents.

ARTICLE
IX

MISCELLANEOUS
PROVISIONS

9.1   Completeness;
Modification. This
Agreement constitutes the entire agreement between the parties hereto with
respect to the transactions contemplated hereby and supersedes all prior
discussions, understandings, agreements and negotiations between the parties
hereto. This Agreement may be modified only by a written instrument duly
executed by the parties hereto.

9.2   Assignments. The
Purchaser may assign its rights hereunder to any affiliate of Purchaser without
the consent of the Seller. No such assignment shall relieve the Purchaser of any
of its obligations and liabilities hereunder.

9.3   Successors
and Assigns. The
benefits and burdens of this Agreement shall inure to the benefit of and bind
the Purchaser and the Seller and their respective party hereto.

9.4   Days. If any
action is required to be performed, or if any notice, consent or other
communication is given, on a day that is a Saturday or Sunday or a legal holiday
in the jurisdiction in which the action is required to be performed or in which
is located the intended recipient of such notice, consent or other
communication, such performance shall be deemed to be required, and such notice,
consent or other communication shall be deemed to be given, on the first
business day following such Saturday, Sunday or legal holiday. Unless otherwise
specified herein, all references herein to a “day” or “days” shall refer to
calendar days and not business days.

9.5   Governing
Law. This
Agreement and all documents referred to herein shall be governed by and
construed and interpreted in accordance with the laws of the State of New
York.

9.6   Counterparts. To
facilitate execution, this Agreement may be executed in as many counterparts as
may be required. It shall not be necessary that the signature on behalf of both
parties hereto appear on each counterpart hereof. All counterparts hereof shall
collectively constitute a single agreement.

9.7   Severability. If any
term, covenant or condition of this Agreement, or the application thereof to any
person or circumstance, shall to any extent be invalid or unenforceable, the
remainder of this Agreement, or the application of such term, covenant or
condition to other persons or circumstances, shall not be affected thereby
provided the parties realize the material benefits of this Agreement, and each
term, covenant or condition of this Agreement shall be valid and enforceable to
the fullest extent permitted by law.

9.8   Costs.
Regardless of whether Closing occurs hereunder, and except as otherwise
expressly provided herein, each party hereto shall be responsible for its own
costs in connection with this Agreement and the transactions contemplated
hereby, including without limitation fees of attorneys, engineers and
accountants.

9.9   Notices. All
notices, requests, demands and other communications hereunder shall be in
writing and shall be delivered by hand, transmitted by facsimile transmission,
sent prepaid by Federal Express (or a comparable overnight delivery service) or
sent by the United States mail, certified, postage prepaid, return receipt
requested, at the addresses and with such copies as designated below. Any
notice, request, demand or other communication delivered or sent in the manner
aforesaid shall be deemed given or made (as the case may be) when actually
delivered to the intended recipient.

 

	
      If
      to the Purchaser:
	 
	 	 
	 	
      Metro
      Sai Hospitality L.L.C

	 	
      34
      Cleveland Avenue

	 	
      Glenhead,
      New York 11545

	 	
      Telephone :
      516-775-2766

	 	
      Facsimile
      : 516-775-2966

	 	 
	 	 
	
      With
      a copy to:
	
      Brian
      Wrynn

	 	
      13
      Mayflower Place

	 	
      Floral
      Park, New York 11001

	 	
      Telephone:
      516-775-2766

	 	
      Facsimile:
      516-775-2966

	 	 
	
      If
      to the Seller:
	
      5544
      JFK III Associates

	 	
      148
      Sheraton Drive, Box A

	 	
      New
      Cumberland, PA 17070

	 	
      Attn:
      Kiran P. Patel

	 	
      Telephone:
      717-770-2405

	 	
      Facsimile:
      717-774-7383

	 	 
	
      With
      a copy to:
	
      Shah
      & Byler, LLP

	 	
      510
      Walnut Street

	 	
      Philadelphia,
      PA 19106

	 	
      Attn:
      Lok Mohapatra, Esquire

	 	
      Telephone:
      215-238-1045

	 	
      Facsimile:
      267-238-1874

 

 

Or to
such other address as the intended recipient may have specified in a notice to
the other party. Any party hereto may change its address or designate different
or other persons or entities to receive copies by notifying the other party and
the Escrow Agent in a manner described in this Section.

9.10        
Incorporation
by Reference. All of
the exhibits attached hereto are by this reference incorporated herein and made
a part hereof.

9.11        
Survival. All of
the representations, warranties, covenants and agreements of the Seller and the
Purchaser made in, or pursuant to, this Agreement shall survive for a period of
six (6) months following Closing and shall not merge into the Deed or any other
document or instrument executed and delivered in connection herewith.

9.12        
Further
Assurances. The
Seller and the Purchaser each covenant and agree to sign, execute and deliver,
or cause to be signed, executed and delivered, and to do or make, or cause to be
done or made, upon the written request of the other party, any and all
agreements, instruments, papers, deeds, acts or things, supplemental,
confirmatory or otherwise, as may be reasonably required by either party hereto
for the purpose of or in connection with consummating the transactions described
herein.

9.13        
No
Partnership. This
Agreement does not and shall not be construed to create a partnership, joint
venture or any other relationship between the parties hereto except the
relationship of Seller and Purchaser specifically established
hereby.

9.14        
Time
of Essence. Time is
of the essence with respect to every provision hereof.

 

9.15        
Confidentiality.
Purchaser and Seller and their representatives, including any professionals
representing the Purchaser and Seller, shall keep the existence and terms of
this Agreement strictly confidential, except to the extent disclosure is
compelled by law, and then only to the extent of such compulsion. 

9.16        
Publicity. The
parties agree that no party shall contact or conduct negotiations with public
officials, make any public pronouncements, issue press releases or otherwise
furnish information regarding this Agreement and/or the transactions
contemplated by this Agreement to a third party without obtaining the prior
written consent of all parties. No party, or its employees with knowledge of the
transactions contemplated herein, shall trade in the securities of any affiliate
of Purchaser until a public announcement of the transactions contemplated by
this Agreement has been made public.

[The
remainder of the page is intentionally left blank]

 

IN
WITNESS WHEREOF, the Seller and the Purchaser have caused this Agreement to be
executed in their names by their respective duly-authorized
representatives.

	 	
      SELLER:

	 	 
	 	
      5544
      JFK III ASSOCIATES, a Pennsylvania limited
      partnership

	 	 
	 	
      By:
	
      Hersha
      Hospitality, LLC, a Virginia limited liability company, its sole general
      partner

	 	 	 
	 	 	 
	 	
      By:
	
        

	 	 	
      Jay
      H. Shah, Manager

	 	 
	 	
      PURCHASER:

	 	 
	 	
      METRO
      SAI HOSPITALITY L.L.C., a New York limited liability company
      

	 	 
	 	 
	 	
      By:
	
        

	 	 	
      Dr.
      Ashok Dhabuwala, Managing Member

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