Document:

Exhibit 10.1

    
      

    

    
       

      
        	
                

              	
                Exhibit
                  10.1          

                  

              
	
                HERSHA
                  GROUP

                 

              
	
                510
                  Walnut Street, 9th
                  Floor

              
	
                Philadelphia,
                  PA 19016

              
	
                Phone:
                  215-238-1046

              
	
                Fax:
                  215-238-0157

              
	
                www.hersha.com

              

      

      
        
          

        

      

       

    

    May
      18,
      2005

    

    Michael
      R. Gillespie

    914
      Buchannan Street

    Lancaster,
      Pennsylvania 17603

    

    

    Dear
      Michael: 

    

    We
      are
      delighted to extend you an invitation to join the Hersha Group of Companies
      as
      Chief Accounting Officer for Hersha Hospitality Trust. 

    

    Your
      start date is anticipated to be June 20, 2005.

    

    Your
      compensation will consist of the following:

    

    A
      salary
      paid at the rate of $140,000 per year.

    

    Three
      weeks vacation during the first year of service and four weeks thereafter.
      

    

    Bonus
      Plan Statement: 

    

    A
      bonus
      plan will be offered up to 15% of your annual salary. This plan will be based
      upon agreed job performance and set goals and will be administered solely at
      the
      Company’s discretion. Of your total bonus, 75% of your first year bonus will be
      based upon job performance and set goals while the remainder will be based
      upon
      Company specific goals currently in place for the executive management
      team.

    

    Restricted
      Stock: 

    

    You
      will
      be considered for a grant of restricted stock after completing one year of
      employment with Hersha.

    

    Medical
      Benefits:

    

    You
      are
      eligible for medical insurance benefits under the Blue Shield program for
      yourself and the coverage will be paid at 100%. You may purchase coverage for
      your spouse and dependents through our program.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Change
      of
      Control Compensation:

    

    During
      the first year of your employment, in the event of a termination without cause
      within six months of a Change of Control, the Company shall pay your annual
      salary for a period of three months following the termination. During years
      two
      and three of your employment, in the event of a termination without cause within
      six months of a Change of Control, the Company shall pay your annual salary
      for
      a period of six months following termination. A more formal agreement defining
      Change of Control will be executed upon the commencement of your
      employment.

    

    Other
      Benefits:

     

    You
      will
      be eligible to receive a cellular telephone at the expense of the Company and
      if
      needed a laptop computer and Blackberry. 

     

    The
      Hersha Group is an “at will” employer. “At will,” means that either the employer
      or the employee can terminate the employment relationship without notice and
      without cause. This letter constitutes the full commitments that have been
      extended to you. 

    

    I
      am very
      pleased to extend this offer to join us in creating this exciting new platform.
      We hope that you will grow to become an integral part of our team and a partner
      in our success.

    

    Sincerely,
      

    

    

    

    James
      Bowling 

    Vice
      President, Human Resources 

    

    I
      accept
      this offer: 

    

    

    
      	
              
                

              

              Michael
                R. Gillespie

            	
              
                

                DateAmendment to Credit Agreement

    AMENDMENT

    TO

    CREDIT
      AGREEMENT

    

    THIS
      AMENDMENT TO CREDIT AGREEMENT,
      is
      entered into as of June 24, 2005 (the "Amendment"), by and among P&F
      INDUSTRIES, INC., a
      Delaware corporation ("P&F"),
      FLORIDA
      PNEUMATIC MANUFACTURING CORPORATION,
      a
      Florida corporation ("Florida Pneumatic"), EMBASSY
      INDUSTRIES, INC., a
      New
      York corporation ("Embassy"), GREEN
      MANUFACTURING, INC., a
      Delaware corporation ("Green"), COUNTRYWIDE
      HARDWARE, INC., a
      Delaware corporation ("Countrywide"), NATIONWIDE
      INDUSTRIES, INC.,
      a
      Florida corporation ("Nationwide") and
      WOODMARK
      INTERNATIONAL, L.P.
      ("Woodmark"; and collectively with P&F, Florida Pneumatic, Embassy, Green,
      Countrywide and Nationwide, the "Co-Borrowers"), CITIBANK,
      N.A. and
      HSBC
      BANK USA, NATIONAL ASSOCIATION
      (formerly known as HSBC Bank USA) (collectively, the "Lenders") and CITIBANK,
      N.A.,
      as
      Administrative Agent for the Lenders. 

    

    BACKGROUND

    

    The
      Co-Borrowers, the Lenders and the Administrative Agent are parties to a Credit
      Agreement, dated as of June 30, 2004 (as same has been and may be further
      amended, restated, supplemented or modified, from time to time, the "Credit
      Agreement"), pursuant to which the Lenders provide the Co-Borrowers with certain
      financial accommodations. 

    

    The
      Co-Borrowers have requested, and the Administrative Agent and the Lenders have
      agreed,
      subject to the terms and conditions of this Amendment, to amend certain
      provisions of the Credit Agreement as herein set forth. Capitalized
      terms used herein and not defined herein shall have the meanings given to them
      in the Credit Agreement.

    

    Accordingly,
      in consideration of the premises and of the mutual covenants and agreements
      hereinafter set forth, the parties hereto agree as follows:

    

    ARTICLE
      I.

    Amendments
      to Credit Agreement.

    

    Section
      1.1. The
      definition of "Revolving Credit Commitment Termination Date" in Section 1.01
      of
      the Credit Agreement is hereby amended in its entirety to provide as
      follows:

    

    "Revolving
      Credit Commitment Termination Date" shall mean June 30, 2006.

    

    Section
      1.2. Section
      6.03(e) of the Credit Agreement is hereby amended in its entirety to provide
      as
      follows:

    

    "(e)
      on
      or prior to the fifteenth (15th) day following the end of each quarterly period
      of each fiscal year of the Co-Borrowers, a detailed schedule of accounts
      receivable of the Co-Borrowers certified by the Chief Financial Officer of
      P&F and current as of the last Business Day of such fiscal period then
      ended, which schedule shall include accounts receivable agings on an invoice
      date basis, all in form satisfactory to the Required Lenders;"

    

    

    ARTICLE
      II.

    Conditions
      of Effectiveness.

    

    Section
      2.1. This Amendment shall become effective as of the date hereof, upon receipt
      by the Administrative Agent of this Amendment, duly executed by each Co-Borrower
      and each Lender. 

    

    ARTICLE
      III.

    Representations
      and Warranties; Effect on Credit Agreement.

    

    Section
      3.1. Each Co-Borrower hereby represents and warrants as follows:

    

    a. This
      Amendment and the Credit Agreement, as amended hereby, constitute legal, valid
      and binding obligations of the Co-Borrowers and are enforceable against the
      Co-Borrowers in accordance with their respective terms.

    

    b. Upon
      the
      effectiveness of this Amendment, the Co-Borrowers hereby reaffirm all covenants,
      representations and warranties made in the Credit Agreement to the extent that
      the same are not amended hereby and each Co-Borrower agrees that all such
      covenants, representations and warranties shall be deemed to have been remade
      as
      of the date hereof. 

    

    c. No
      Default or Event of Default has occurred and is continuing or would exist after
      giving effect to this Amendment.

    

    d. No
      Co-Borrower has any defense, counterclaim or offset with respect to the Credit
      Agreement.

    

    Section
      3.2.  Effect
      on Credit Agreement.

    

    a. Upon
      the
      effectiveness of this Amendment, each reference in the Credit Agreement to
      "this
      Agreement", "hereunder", "hereof", "herein" or words of like import shall mean
      and be a reference to the Credit Agreement as amended hereby.

    

    b. Except
      as
      specifically amended herein, the Credit Agreement, and all other documents,
      instruments and agreements executed and/or delivered in connection therewith,
      shall remain in full force and effect, and are hereby ratified and
      confirmed.

    

    c. Except
      as
      expressly provided herein, the execution, delivery and effectiveness of this
      Amendment shall not operate as a waiver of any right, power or remedy of the
      Administrative Agent or the Lenders, nor constitute a waiver of any provision
      of
      the Credit Agreement, or any other documents, instruments or agreements executed
      and/or delivered under or in connection therewith.

     

    
      ARTICLE
        IV.

      Miscellaneous.

       

    

    
      Section
        4.1. This
        Amendment shall be governed by and construed in accordance with the laws
        of the
        State of New York.

      

      Section
        4.2. Section
        headings in this Amendment are included herein for convenience of reference
        only
        and shall not constitute a part of this Amendment for any other
        purpose.

    

    
       

      
        
        

        2

      

      
        
        

      

    

     

    

    
    

    Section
      4.3. This
      Amendment may be executed in one or more counterparts, each of which shall
      constitute an original, and all of which, taken together, shall be deemed to
      constitute one and the same agreement.

    

    IN
      WITNESS WHEREOF,
      the
      Co-Borrowers, the Lenders and the Administrative Agent have caused this
      Amendment to be duly executed by their duly authorized officers as of the day
      and year first above written.

    

    P&F
      INDUSTRIES, INC.

    FLORIDA
      PNEUMATIC MANUFACTURING 

    CORPORATION

    EMBASSY
      INDUSTRIES, INC.

    GREEN
      MANUFACTURING, INC.

    COUNTRYWIDE
      HARDWARE, INC. NATIONWIDE INDUSTRIES, INC.

    WOODMARK
      INTERNATIONAL, L.P.

    By:
       Countrywide
      Hardware, Inc., its General 

    Partner

     

    By:
      /s/
      Joseph A. Molino, Jr.

    Joseph
      A.
      Molino, Jr., the Vice President of each

    of
      the
      foregoing corporations

    

    CITIBANK,
      N.A., as
      a
      Lender and as 

    Administrative
      Agent 

    

    By:
      /s/
      Stephen Kelly

    Name:
      Stephen Kelly

    Title:
       Vice
      President

    

    HSBC
      BANK USA, NATIONAL 

    ASSOCIATION,
      as
      a
      Lender 

    

    By:
      /s/
      Raymond Fincken

    Name:
      Raymond
      Fincken

    Title:
       Vice
      President

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