Document:

Exhibit 10.1

EXHIBIT
10.1

PLACEMENT
AGREEMENT

AMONG

HERSHA
HOSPITALITY LIMITED PARTNERSHIP,

 

HERSHA
HOSPITALITY TRUST,

HERSHA
STATUTORY TRUST II

 

AND

CREDIT
SUISSE FIRST BOSTON LLC

________________

 

 

Dated as
of May 31, 2005

________________

 

Hersha
Hospitality Limited Partnership

$25,000,000
Preferred Securities

Preferred
Securities

(Liquidation
Amount $1,000 per Preferred Security)

PLACEMENT
AGREEMENT

______________________

 

May 31,
2005          

Credit
Suisse First Boston LLC

Eleven
Madison Avenue

New York,
New York 10010

Ladies
and Gentlemen:

Hersha
Hospitality Limited Partnership, a Virginia limited partnership (the “Company”),
its financing subsidiary, Hersha Statutory Trust II, a Delaware statutory trust
(the “Trust,” and hereinafter together with the Company, the “Offerors”), and
Hersha Hospitality Trust, a Maryland corporation (“HHT”), hereby confirm their
agreement (this “Agreement”) with you as placement agent (the “Placement
Agent”), as follows:

Section
1.   
Issuance
and Sale of Securities.

1.1 
   Introduction. The
Offerors propose to issue and sell at the Closing (as defined in Section 2.3.1
hereof) TWENTY-FIVE
MILLION
($25,000,000) DOLLARS of the
Trust’s Preferred Securities, with a liquidation amount of $1,000 per preferred
security, bearing a fixed rate of interest equal to 7.173% per annum through the
interest payment date in July 2010 and, thereafter, a variable rate of interest,
per annum, reset quarterly, equal to LIBOR (as defined in the Indenture (as
defined below)) plus 3.00% (the “Preferred Securities”), directly or indirectly,
to Credit Suisse First Boston, acting through its Cayman Islands branch, a Swiss
banking corporation (the “Purchaser”), pursuant to the terms of the Preferred
Securities Subscription Agreement entered into, or to be entered into on or
prior to the Closing Date (as defined in Section 2.3.1 hereof), between the
Offerors, HHT and the Purchaser (the “Subscription Agreement”), the form of
which is attached hereto as Exhibit
A
and
incorporated herein by this reference.

1.2 
   Operative
Agreements. The
entire proceeds from the sale by the Trust to the holders of the Preferred
Securities shall be combined with the entire proceeds from the sale by the Trust
to the Company of its common securities (the “Common Securities”), and shall be
used by the Trust to purchase TWENTY-FIVE MILLION SEVEN HUNDRED SEVENTY-FOUR
THOUSAND
($25,774,000) DOLLARS in
principal amount of the Junior Subordinated Notes (the “Junior Subordinated
Notes”) of the Company. The Preferred Securities and the Common Securities of
the Trust shall be issued pursuant to an Amended and Restated Trust Agreement
among Wilmington Trust Company, as property trustee (the “Property Trustee”) and
as Delaware trustee (the “Delaware Trustee”), the Administrative Trustees named
therein and the Company, to be dated as of the Closing Date and in substantially
the form heretofore delivered to the Placement Agent (the “Trust Agreement”).
The Junior Subordinated Notes shall be issued pursuant to an Indenture (the
“Indenture”), to be dated as of the Closing Date, between the Company and
Wilmington Trust Company, as indenture trustee (the “Indenture Trustee”). The
documents identified in this Section
1.2 and in
Section
1.1 are
referred to herein as the “Operative Documents.” The Preferred Securities, the
Common Securities and the Junior Subordinated Notes are collectively referred to
as the “Securities.” All other capitalized terms used but not defined in this
Agreement shall have the meanings ascribed to them in the
Indenture.

2

1.3 
   Rights
of Purchaser. The
Preferred Securities shall be offered and sold by the Trust, directly or
indirectly, to the Purchaser without registration of any of the Preferred
Securities or the Junior Subordinated Notes under the Securities Act of 1933, as
amended (the “Securities Act”), or any other applicable securities laws in
reliance upon exemptions from the registration requirements of the Securities
Act and other applicable securities laws. The Offerors agree that this Agreement
shall be incorporated by reference into the Subscription Agreement and the
Purchaser shall be entitled to each of the benefits of the Placement Agent and
the Purchaser under this Agreement and shall be entitled to enforce obligations
of the Offerors under this Agreement as fully as if the Purchaser were a party
to this Agreement. The Offerors and the Placement Agent have entered into this
Agreement to set forth their understanding as to their relationship and their
respective rights, duties and obligations.

1.4 
   Legends. Upon
original issuance thereof, and until such time as the same is no longer required
under the applicable requirements of the Securities Act, the Preferred
Securities and Junior Subordinated Notes certificates shall each contain a
legend as required pursuant to any of the Operative Documents.

Section
2.         Purchase
of Preferred
Securities.

2.1     Exclusive
Rights; Purchase Price. From the
date hereof until the Closing Date (which date may be extended by mutual
agreement of the Offerors and the Placement Agent), the Offerors hereby grant to
the Placement Agent the exclusive right to arrange for the sale to the Purchaser
of the Preferred Securities at a purchase price equal to $1,000 per Preferred
Security. The aggregate purchase price shall be TWENTY-FIVE
MILLION
($25,000,000) DOLLARS (the
“Purchase Price”), which Purchase Price is equal to 100% of the stated
liquidation amount of the Preferred Securities.

2.2     Subscription. The
Offerors hereby agree to evidence their acceptance of the subscription by
countersigning a copy of the Subscription Agreement and returning the same to
the Placement Agent.

2.3     Closing
and Delivery of Payment.

3

2.3.1   Closing;
Closing Date. The
closing (the “Closing”) for the sale and purchase of the Preferred Securities
shall occur at the offices of Thacher Proffitt & Wood llp, Two
World Financial Center, New York, New York 10281, or such other place as the
parties hereto shall agree at 11:00 a.m. (New York time) on May 31, 2005, or
such other later date (not later than June 29, 2005) as the parties may
designate (such date and time of delivery and payment for the Preferred
Securities being herein called the “Closing Date”). The Preferred Securities
shall be transferred and delivered to the Purchaser or its designee against the
payment of the Purchase Price to the Offerors in immediately available funds on
the Closing Date to a U.S. account designated in writing by the Company at least
two (2) business days prior to the Closing Date.

2.3.2   Delivery. Delivery
of the Preferred Securities shall be made at such location, and in such names
and denominations, as the Purchaser shall designate at least two (2) business
days in advance of the Closing Date. The Company and the Trust agree to have the
Preferred Securities available for inspection and checking by the Purchaser in
New York, New York not later than 1:00 P.M., New York time, on the business day
prior to the Closing Date. 

2.4  
   Placement
Agents’ Fees and Expenses.

2.4.1   Placement
Agents’ Compensation. The
Trust shall use the proceeds from the sale of the Preferred Securities, together
with the proceeds from the sale of the Common Securities, to purchase the Junior
Subordinated Notes. Because the proceeds from the sale of the Preferred
Securities shall be used to purchase the Junior Subordinated Notes from the
Company, the Company shall pay an aggregate of $30.00 for each $1,000 of
principal amount of Junior Subordinated Notes (3.00%) sold to the Trust
(excluding the Junior Subordinated Notes related to the Common Securities
purchased by the Company) (the “Commission”). Such amount shall be delivered to
the Placement Agent or such other person designated by the Placement Agent on
the Closing Date. The Placement Agent shall be responsible for the following
expenses: (i) rating agency costs and expenses and (ii) any fee payable to the
Company’s introducing agent; provided, that such introducing agent has an
agreement with the Placement Agent, but excluding the fees and expenses set
forth in Section
2.4.2 hereof.

2.4.2   Costs
and Expenses. The
Company hereby covenants and agrees that it shall pay or cause to be paid
(directly or by reimbursement) all costs and expenses incident to the
performance of the obligations of the Offerors under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated, including (i) all costs and expenses incident to the authorization,
issuance, sale and delivery of the Preferred Securities and any taxes payable in
connection therewith; (ii) the fees and expenses of qualifying the
Preferred Securities under the securities laws of the several jurisdictions as
provided in Section
6.4;
(iii) the fees and expenses of the counsel, the accountants and any other
experts or advisors retained by the Company or the Trust; (iv) the fees and all
reasonable expenses of the Property Trustee, the
Delaware Trustee, the
Indenture Trustee and any other trustee or paying agent appointed under the
Operative Documents, including the fees and disbursements of counsel for such
trustees; and (v) a due diligence fee in an amount equal to $5,000.

2.4.3   Reimbursement
of Expenses. If the
sale of the Preferred Securities provided for in this Agreement is not
consummated because any condition set forth in Section
3 to be
satisfied by either the Company or the Trust is not satisfied, because this
Agreement is terminated pursuant to Section
10 or
because of any failure, refusal or inability on the part of the Company or the
Trust to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder other than by a reason of a default by the
Placement Agent, the Company will reimburse the Placement Agent upon demand for
all reasonable out-of-pocket expenses (including the fees and expenses of each
of the Placement Agent’s or Purchaser’s counsel) that shall have been incurred
by the Placement Agent or Purchaser in connection with the proposed purchase and
sale of the Preferred Securities. The Company shall not in any event be liable
to the Placement Agent or Purchaser for the loss of anticipated profits from the
transactions contemplated by this Agreement. 

4

2.5     Failure
to Close. If any
of the conditions to the Closing specified in this Agreement shall not have been
fulfilled to the satisfaction of the Placement Agent or if the Closing shall not
have occurred on or before 11:00 a.m. (New York time) on June 29, 2005, then
each party hereto, notwithstanding anything to the contrary in this Agreement,
shall be relieved of all further obligations under this Agreement without
thereby waiving any rights it may have by reason of such nonfulfillment or
failure; provided,
however, that
the obligations of the parties under Sections
2.4, and
8 shall
not be so relieved and shall continue in full force and effect.

Section
3.        Closing
Conditions. The
obligations of the parties under this Agreement on the Closing Date are subject
to the following conditions:

3.1 
   Accuracy
of Representations and Warranties. The
representations and warranties contained in this Agreement, and the statements
of the Offerors and of HHT made in any certificates pursuant to this Agreement,
shall be accurate as of the date of delivery of the Preferred
Securities:

3.2 
   Opinions
of Counsel. On the
Closing Date, the Placement Agent shall have received the following favorable
opinions or certificate, as the case may be, each dated as of the Closing Date:
(a) from Thacher Proffitt & Wood llp, special
counsel for the Placement Agent and Purchaser and addressed to the Placement
Agent and Purchaser in substantially the form set forth on Exhibit
B-1 attached
hereto and incorporated herein by this reference, (b) from Hunton & Williams
LLP, counsel for the Offerors, or an Officers’ Certificate, addressed to the
Purchaser and the Placement Agent in substantially the form set forth on
Exhibit
B-2 attached
hereto and incorporated herein by this reference, (c) from Thacher Proffitt
& Wood llp, special
tax counsel for the Placement Agent and Purchaser and addressed to the Placement
Agent and Purchaser in substantially the form set forth on Exhibit
B-3 attached
hereto and incorporated herein by this reference, (d) from Morris, James,
Hitchens & Williams LLP, special Delaware counsel to the Trust and addressed
to the Purchaser, the Placement Agent and the Offerors, in substantially the
form set forth on Exhibit
B-4 attached
hereto and incorporated herein by this reference, and (e) from Morris, James,
Hitchens & Williams LLP, special counsel to the Indenture Trustee, the
Property Trustee and the Delaware Trustee and addressed to the Purchaser, the
Placement Agent and the Offerors, in substantially the form set forth on
Exhibit
B-5 attached
hereto and incorporated herein by this reference. Each opinion addressed to the
Purchaser shall state that the first entity, if any, to which the Purchaser
transfers any of the Preferred Securities (each, a “Subsequent Purchaser”) shall
be entitled to rely on such opinion.

3.3     Officer’s
Certificate. The
Company and HHT shall have furnished to the Placement Agent and the Purchaser a
certificate of the Company and HHT, signed by the General Partner of the Company
and by the President and Chief Operating Officer and by the Chief Financial
Officer of HHT, and the Trust shall have furnished to the Placement Agent and
the Purchaser a certificate of the Trust, signed by an Administrative Trustee of
the Trust, in each case dated the Closing Date, and, in the case of the Company
and HHT, as to 3.3.1 and
3.3.2 below
and, in the case of the Trust, as to 3.3.1
below:

3.3.1   the
representations and warranties in this Agreement are true and correct on and as
of the Closing Date with the same effect as if made on the Closing Date, and the
Company, HHT and the Trust have complied with all the agreements and satisfied
all the conditions on either of their part to be performed or satisfied at or
prior to the Closing Date; and

5

3.3.2   since the
date of the Interim Financial Statements (as defined below), there has been no
material adverse change in the condition (financial or other), earnings,
business, prospects or assets of HHT and its subsidiaries, whether or not
arising from transactions occurring in the ordinary course of
business.

3.4  
   No
Subsequent Change.
Subsequent to the execution of this Agreement, there shall not have been any
change, in or affecting the condition (financial or other), earnings, business
or assets of the Company and its subsidiaries, whether or not occurring in the
ordinary course of business, the effect of which is, in the Placement Agent’s or
Purchaser’s judgment, so material and adverse as to make it impractical or
inadvisable to proceed with the purchase of the Preferred
Securities.

3.5     Purchase
Permitted by Applicable Laws; Legal Investment. The
purchase of and payment for the Preferred Securities as described in this
Agreement and pursuant to the Subscription Agreement shall (a) not be prohibited
by any applicable law or governmental regulation, (b) not subject the Purchaser
or the Placement Agent to any penalty or, in the reasonable judgment of the
Purchaser and the Placement Agent, other onerous conditions under or pursuant to
any applicable law or governmental regulation, and (c) be permitted by the laws
and regulations of the jurisdictions to which the Purchaser and the Placement
Agent are subject.

3.6     Consents
and Permits. The
Company and the Trust shall have received all consents, permits and other
authorizations, and made all such filings and declarations, as may be required
from any person or entity pursuant to any law, statute, regulation or rule
(federal, state, local and foreign), or pursuant to any agreement, order or
decree to which the Company or the Trust is a party or to which either is
subject, in connection with the transactions contemplated by this Agreement.

3.7     Information. Prior to
or on the Closing Date, the Offerors shall have furnished to the Placement
Agent, the Purchaser and their respective counsel such further information,
certificates, opinions and documents as the Placement Agent, Purchaser or their
respective counsel may reasonably request.

If any of
the conditions specified in this Section
3 shall
not have been fulfilled when and as required in this Agreement, or if any of the
opinions, certificates and documents mentioned above or elsewhere in this
Agreement shall not be reasonably satisfactory in form and substance to the
Placement Agent, the Purchaser or their respective counsel, this Agreement and
all the Placement Agent’s obligations hereunder may be canceled at, or any time
prior to, the Closing Date by the Placement Agent. Notice of such cancellation
shall be given to the Offerors in writing or by telephone or facsimile confirmed
in writing.

Each
certificate signed by any trustee of the Trust or any officer of the Company or
HHT and delivered to the Placement Agent, Purchaser or their respective counsel
in connection with the Operative Documents and the transactions contemplated
hereby and thereby shall be deemed to be a representation and warranty of the
Trust, the Company and/or HHT, as the case may be, and not by such trustee or
officer in any individual capacity.

6

Section
4.   
Representations
and Warranties of the Offerors and HHT. The
Offerors jointly and severally represent and warrant to the Placement Agent and
the Purchaser; and HHT represents and warrants to the Placement Agent and the
Purchaser as to the matters set forth in Sections 4.7, 4.15, 4.19, 4.20, 4.27
and 4.29 below, each as of the date hereof and as of the Closing Date as
follows:

4.1     
Securities
Laws Matters.

(i) 
 
Neither
the Company nor the Trust, nor any of their “Affiliates” (as defined in Rule
501(b) of Regulation D under the Securities Act (“Regulation D”)), nor any
person acting on any of their behalf (except for the Placement Agent, as to
which neither the Company nor the Trust make any representation) has, directly
or indirectly, made offers or sales of any security, or solicited offers to buy
any security, under circumstances that would require the registration under the
Securities Act of any of the Securities.

(ii)
 
Neither
the Company nor the Trust, nor any of their Affiliates, nor any person acting on
its or their behalf (except for the Placement Agent, as to which neither the
Company nor the Trust make any representation) has (i) offered for sale or
solicited offers to purchase the Securities, (ii) engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of any of the Securities, or (iii) engaged in
any “directed selling efforts” within the meaning of Regulation S under the
Securities Act (“Regulation S”) with respect to the Securities.

(iii)  The
Securities (i) are not and have not been listed on a national securities
exchange registered under section 6 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), or quoted on a U.S. automated interdealer
quotation system and (ii) are not of an open-end investment company, unit
investment trust or face-amount certificate company that are, or are required to
be, registered under section 8 of the Investment Company Act of 1940, as amended
(the “Investment Company Act”), and the Securities otherwise satisfy the
eligibility requirements of Rule 144A(d)(3) promulgated pursuant to the
Securities Act (“Rule 144A(d)(3)”).

(iv)  Neither
the Company nor the Trust is, and, immediately following consummation of the
transactions contemplated hereby and the application of the net proceeds
therefrom, neither the Company nor the Trust will be, an “investment company” or
an entity “controlled” by an “investment company,” in each case within the
meaning of section 3(a) of the Investment Company Act.

(v)
 
Neither
the Company nor the Trust has paid or agreed to pay to any person or entity,
directly or indirectly, any fees or other compensation for soliciting another to
purchase any of the Securities, except for the Commission and/or any fee payable
to the Company’s introducing agent; provided, that such introducing agent has an
agreement with the Placement Agent.

7

 

4.2     Standing
and Qualification of the Trust. The
Trust has been duly created and is validly existing in good standing as a
statutory trust under the Delaware Statutory Trust Act, 12 Del. C. §3801,
et
seq. (the
“Statutory Trust Act”) with all requisite power and authority to own property
and to conduct the business it transacts and proposes to transact and to enter
into and perform its obligations under the Operative Documents to which it is a
party. The Trust is duly qualified to transact business as a foreign entity and
is in good standing in each jurisdiction in which such qualification is
necessary, except where the failure to so qualify or be in good standing would
not have a material adverse effect on the condition (financial or otherwise),
earnings, business, prospects or assets of the Trust, whether or not occurring
in the ordinary course of business. The Trust is not a party to, or otherwise
bound by, any agreement other than the Operative Documents. The Trust is, and
under current law will continue to be, classified for federal income tax
purposes as a grantor trust and not as an association or publicly traded
partnership taxable as a corporation.

 

4.3     Trust
Agreement. The
Trust Agreement has been duly authorized by the Company and, on the Closing Date
specified in Section
2.3.1, will
have been duly executed and delivered by the Company and the Administrative
Trustees of the Trust, and, assuming due authorization, execution and delivery
by the Property Trustee and the Delaware Trustee, will be a legal, valid and
binding obligation of the Company and the Administrative Trustees, enforceable
against them in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally and to general
principles of equity. Each of the Administrative Trustees of the Trust is an
employee of the Company or one of its subsidiaries and has been duly authorized
by the Company to execute and deliver the Trust Agreement. To the knowledge of
the Administrative Trustees, the Trust is not in violation of any provision of
the Statutory Trust Act.

4.4     The
Indenture. The
Indenture has been duly authorized by the Company and, on the Closing Date, will
have been duly executed and delivered by the Company, and, assuming due
authorization, execution and delivery by the Indenture Trustee, will be a legal,
valid and binding obligation of the Company enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and to general principles of
equity.

4.5     Preferred
Securities and Common Securities.  The
Preferred Securities and the Common Securities have been duly authorized by the
Trust and, when issued and delivered against payment therefor on the Closing
Date to the Purchaser in accordance with this Agreement and the Subscription
Agreement, in the case of the Preferred Securities, and to the Company in
accordance with the Common Securities Subscription Agreement between the Company
and the Trust, dated as of the Closing Date, in the case of the Common
Securities, will be validly issued, fully paid and nonassessable and will
represent undivided beneficial interests in the assets of the Trust entitled to
the benefits of the Trust Agreement, enforceable against the Trust in accordance
with their terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and to general principles of equity. The
issuance of the Securities is not subject to preemptive or other similar rights.
On the Closing Date, all of the issued and outstanding Common Securities will be
directly owned by the Company free and clear of any pledge, security interest,
claim, lien or other encumbrance (each, a “Lien”).

8

 

4.6     Junior
Subordinated Notes. The
Junior Subordinated Notes have been duly authorized by the Company and, on the
Closing Date, will have been duly executed and delivered to the Indenture
Trustee for authentication in accordance with the Indenture and, when
authenticated in the manner provided for in the Indenture and delivered to the
Trust against payment therefor in accordance with the Junior Subordinated Note
Subscription Agreement between the Company and the Trust, dated as of the
Closing Date, will constitute legal, valid and binding obligations of the
Company entitled to the benefits of the Indenture enforceable against the
Company in accordance with their terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally and to general
principles of equity.

 

4.7     Placement
Agreement. This
Agreement has been duly authorized, executed and delivered by the Company, HHT
and the Trust and constitutes the legal, valid and binding obligation of the
Company, HHT and the Trust, enforceable against the Company, HHT and the Trust
in accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors’ rights generally and to general principles of
equity.

4.8     Defaults. Neither
the issue and sale of the Common Securities, the Preferred Securities or the
Junior Subordinated Notes, nor the purchase of the Junior Subordinated Notes by
the Trust, the execution and delivery of and compliance with the Operative
Documents by the Company or the Trust, the consummation of the transactions
contemplated herein or therein, or the use of the proceeds therefrom, (i) will
conflict with or constitute a breach of, or a default under, the Trust Agreement
or the charter or bylaws of the Company or any subsidiary of the Company or any
applicable law, statute, rule, regulation, judgment, order, writ or decree of
any government, governmental authority, agency or instrumentality or court,
domestic or foreign, having jurisdiction over the Trust, or the Company or any
of its subsidiaries, or their respective properties or assets (collectively,
“Governmental Entities”), (ii) will conflict with or constitute a violation or
breach of, or a default or Repayment Event (as defined below) under, or result
in the creation or imposition of any Lien upon any property or assets of the
Trust, the Company or any of the Company’s subsidiaries pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which (A) the Trust, the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or (B) any of the property or
assets of any of them is subject, or any judgment, order or decree of any court,
Governmental Entity or arbitrator, except, in the case of this clause (ii), for
such conflicts, breaches, violations, defaults, Repayment Events (as defined
below) or Liens which (X) would not, singly or in the aggregate, adversely
affect the consummation of the transactions contemplated by the Operative
Documents and (Y) would not, singly or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), earnings, business,
liabilities, prospects and assets (taken as a whole) or business prospects of
the Company and its subsidiaries taken as a whole, whether or not occurring in
the ordinary course of business (a “Material Adverse Effect”) or (iii) require
the consent, approval, authorization or order of any court or Governmental
Entity. As used herein, a “Repayment Event” means any event or condition which
gives the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the Trust or
the Company or any of its subsidiaries prior to its scheduled
maturity.

4.9     Organization,
Standing and Qualification of the Company. The
Company has been duly incorporated and is validly existing as a limited
partnership in good standing under the laws of Virginia, with all requisite
partnership power and authority to own, lease and operate its properties and
conduct the business it transacts and proposes to transact, and is duly
qualified to transact business and is in good standing in each jurisdiction
where the nature of its activities requires such qualification, except where the
failure of the Company to be so qualified would not, singly or in the aggregate,
have a Material Adverse Effect.

9

4.10    Subsidiaries
of the Company. The
Company has no subsidiaries that are material to its business, financial
condition or earnings other than those subsidiaries listed in Schedule
1 attached
hereto (the “Significant Subsidiaries”). Each Significant Subsidiary has been
duly organized and is validly existing and in good standing under the laws of
the jurisdiction in which it is chartered or organized, with all requisite power
and authority to own its properties and conduct the business it transacts and
proposes to transact. Each Significant Subsidiary is duly qualified to transact
business and is in good standing as a foreign entity in each jurisdiction where
the nature of its activities requires such qualification, except where the
failure of any such Significant Subsidiary to be so qualified would not, singly
or in the aggregate, have a Material Adverse Effect. 

4.11    Government
Licenses. Each of
the Trust, the Company and each of its subsidiaries hold all necessary
approvals, authorizations, orders, licenses, certificates and permits
(collectively, “Government Licenses”) of and from Governmental Entities
necessary to conduct its respective business as now being conducted, and neither
the Trust, the Company nor any of the Company’s subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
Government License, except where the failure to be so licensed or approved or
the receipt of an unfavorable decision, ruling or finding, would not, singly or
in the aggregate, have a Material Adverse Effect; all of the Government Licenses
are valid and in full force and effect, except where the invalidity or the
failure of such Government Licenses to be in full force and effect, would not,
singly or in the aggregate, have a Material Adverse Effect; and the Company and
its subsidiaries are in compliance with all applicable laws, rules, regulations,
judgments, orders, decrees and consents, except where the failure to be in
compliance would not, singly or in the aggregate, have a Material Adverse
Effect.

4.12    Stock. All of
the issued and outstanding partnership units of the Company and all of the
issued and outstanding shares of capital stock of or other ownership interests
in each of its subsidiaries are validly issued, fully paid and nonassesssable;
except as set forth on Schedule
2 attached
hereto, all of the issued and outstanding capital stock of or other ownership
interests in each subsidiary of the Company is owned by the Company, directly or
through subsidiaries, free and clear of any Lien, claim or equitable right; and
none of the issued and outstanding capital stock of the Company or any
subsidiary was issued in violation of any preemptive or similar rights arising
by operation of law, under the charter or by-laws of such entity or under any
agreement to which the Company or any of its subsidiaries is a
party.

4.13    Property. Each of
the Trust, the Company and each subsidiary of the Company has good and
marketable title to all of its respective real and personal properties, in each
case free and clear of all Liens and defects, except for those that would not,
singly or in the aggregate, have a Material Adverse Effect; and all of the
leases and subleases under which the Trust, the Company or any subsidiary of the
Company holds properties are in full force and effect, except where the failure
of such leases and subleases to be in full force and effect would not, singly or
in the aggregate, have a Material Adverse Effect and none of the Trust, the
Company or any subsidiary of the Company has any notice of any claim of any sort
that has been asserted by anyone adverse to the rights of the Trust, the Company
or any subsidiary of the Company under any such leases or subleases, or
affecting or questioning the rights of such entity to the continued possession
of the leased or subleased premises under any such lease or sublease, except for
such claims that would not, singly or in the aggregate, have a Material Adverse
Effect.

10

4.14    Conflicts,
Authorizations and Approvals. Neither
the Company nor any of its subsidiaries is (i) in violation of its respective
charter, bylaws or similar organizational documents or (ii) in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument to which either the Company or any such subsidiary
is a party or by which it or any of them may be bound or to which any of the
property or assets of any of them is subject, except, in the case of clause
(ii), where such default would not, singly or in the aggregate, have a Material
Adverse Effect. No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any Governmental Entity, other
than those that have been made or obtained, is necessary or required for the
performance by the Trust or the Company of their respective obligations under
the Operative Documents, as applicable, or the consummation by the Trust and the
Company of the transactions contemplated by the Operative
Documents.

4.15    Financial
Statements.

(a)    The
audited consolidated financial statements (including the notes thereto) and
schedules of HHT and its consolidated subsidiaries at and for the fiscal year
ended December 31, 2004 (the “Financial Statements”) and the interim unaudited
consolidated financial statements of HHT and its consolidated subsidiaries at
and for the quarter ended March 31, 2005 (the “Interim Financial Statements”)
provided to the Placement Agent are the most recently available audited and
unaudited consolidated financial statements of HHT and its consolidated
subsidiaries, respectively, and fairly present in all material respects, in
accordance with U.S. generally accepted accounting principles (“GAAP”), the
financial position of HHT and its consolidated subsidiaries, and the results of
operations and changes in financial condition as of the dates and for the
periods therein specified, subject, in the case of Interim Financial Statements,
to year-end adjustments (which are expected to consist solely of normal
recurring adjustments). Such consolidated financial statements and schedules
have been prepared in accordance with GAAP consistently applied throughout the
periods involved (except as otherwise noted therein).

(b)    Since the
respective dates of the Financial Statements and Interim Financial Statements,
there has not been (A) any material adverse change or development with respect
to the condition (financial or otherwise), earnings, business, assets or
business prospects of HHT and its subsidiaries, taken as a whole, or the Company
and its subsidiaries, taken as a whole, whether or not occurring in the ordinary
course of business or (B) any dividend or distribution of any kind declared,
paid or made by the Company on any of its partnership units or by HHT on any
class of its capital stock other than regular quarterly dividends on HHT’s
common stock.

11

(c)    The
accountants of HHT who certified the Financial Statements are independent public
accountants of HHT and its subsidiaries within the meaning of the Securities Act
and the rules and regulations of the Securities and Exchange Commission (“SEC”)
thereunder.

4.16    No
Undisclosed Liabilities. None of
the Trust, the Company nor any of its subsidiaries has any material liability,
whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for taxes (and there
is no past or present fact, situation, circumstance, condition or other basis
for any present or future action, suit, proceeding, hearing, charge, complaint,
claim or demand against the Company or its subsidiaries that could give rise to
any such liability), except for (i) liabilities set forth in the Financial
Statements or the Interim Financial Statements and (ii) normal fluctuations
in the amount of the liabilities referred to in clause (i) above occurring
in the ordinary course of business of the Trust, the Company and all of its
subsidiaries since the date of the most recent balance sheet included in such
Financial Statements.

4.17    Litigation. There is
no action, suit or proceeding before or by any Governmental Entity, arbitrator
or court, domestic or foreign, now pending or, to the knowledge of the Company
or the Trust after due inquiry, threatened against or affecting the Trust or the
Company or any of the Company’s subsidiaries, except for such actions, suits or
proceedings that, if adversely determined, would not, singly or in the
aggregate, adversely affect the consummation of the transactions contemplated by
the Operative Documents or have a Material Adverse Effect; and the aggregate of
all pending legal or governmental proceedings to which the Trust or the Company
or any of its subsidiaries is a party or of which any of their respective
properties or assets is subject, including ordinary routine litigation
incidental to the business, are not expected to result in a Material Adverse
Effect.

4.18    No
Labor Disputes. No
labor dispute with the employees of the Trust, the Company or any of its
subsidiaries exists or, to the knowledge of the executive officers of the Trust
or the Company, is imminent, except those which would not, singly or in the
aggregate, have a Material Adverse Effect.

4.19    Filings
with the SEC. The
documents of HHT filed with the SEC in accordance with the Exchange Act, from
and including the commencement of the fiscal year covered by HHT’s most recent
Annual Report on Form 10-K, at the time they were or hereafter are filed by HHT
with the SEC (collectively, the “1934 Act Reports”), complied and will comply in
all material respects with the requirements of the Exchange Act and the rules
and regulations of the SEC thereunder (the “1934 Act Regulations”), and, at the
date of this Agreement and on the Closing Date, do not and will not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and other than
such instruments, agreements, contracts and other documents as are filed as
exhibits to HHT’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q or
Current Reports on Form 8-K, there are no instruments, agreements, contracts or
documents of a character described in Item 601 of Regulation S-K
promulgated by the SEC to which HHT or any of its subsidiaries is a party. HHT
is in compliance with all currently applicable requirements of the Exchange Act
that were added by the Sarbanes-Oxley Act of 2002.

12

4.20    Tax
Returns.  The
Company, HHT and each of the Significant Subsidiaries have timely and duly filed
all Tax Returns (defined below) required to be filed by them, and all such Tax
Returns are true, correct and complete in all material respects. The Company,
HHT and each of the Significant Subsidiaries have timely and duly paid in full
all material Taxes required to be paid by them prior to the date hereof (whether
or not such amounts are shown as due on any Tax Return). To the Company’s
knowledge, there are no federal, state, or other Tax audits or deficiency
assessments proposed or pending with respect to the Company, HHT or any of the
Significant Subsidiaries, and to the Company’s knowledge no such audits or
assessments are threatened. As used herein, the terms “Tax” or
“Taxes” mean
(i) all federal, state, local, and foreign taxes, and other assessments of a
similar nature (whether imposed directly or through withholding), including any
interest, additions to tax, or penalties applicable thereto, imposed by any
Governmental Entity, and (ii) all liabilities in respect of such amounts arising
as a result of being a member of any affiliated, consolidated, combined, unitary
or similar group, as a successor to another person or by contract. As used
herein, the term “Tax
Returns” means
all federal, state, local, and foreign Tax returns, declarations, statements,
reports, schedules, forms, and information returns and any amendments thereto
filed or required to be filed with any Governmental Entity.

4.21    Taxes. The
Trust is not subject to United States federal income tax with respect to income
received or accrued on the Junior Subordinated Notes, interest payable by the
Company on the Junior Subordinated Notes is deductible by the Company, in whole
or in part, for United States federal income tax purposes, and the Trust is not,
or will not be within ninety (90) days of the date hereof, subject to more than
a de
minimis amount
of other taxes, duties or other governmental charges. There are no rulemaking or
similar proceedings before the United States Internal Revenue Service or
comparable federal, state, local or foreign government bodies which involve or
affect the Company or any subsidiary, which, if the subject of an action
unfavorable to the Company or any subsidiary, could result in a Material Adverse
Effect.

4.22    Books
and Records. The
books, records and accounts of the Company and its subsidiaries accurately and
fairly reflect, in reasonable detail, the transactions in, and dispositions of,
the assets of, and the results of operations of, the Company and its
subsidiaries. The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.

 

13

 

4.23    Insurance. The
Company and the Significant Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts in
all material respects as are customary in the businesses in which they are
engaged or propose to engage after giving effect to the transactions
contemplated hereby, including, but not limited to, real or personal property
owned or leased against theft, damage, destruction, act of vandalism and all
other risks customarily insured against. All policies of insurance and fidelity
or surety bonds insuring the Company or any of the Significant Subsidiaries or
the Company’s or Significant Subsidiaries’ respective businesses, assets,
employees, officers and directors are in full force and effect. The Company and
each of the Significant Subsidiaries are in compliance with the terms of such
policies and instruments in all material respects. Neither the Company nor any
Significant Subsidiary has reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect. Within the
past twelve months, neither the Company nor any Significant Subsidiary has been
denied any insurance coverage which it has sought or for which it has
applied.

 

4.24    Corporate
Funds. The
Company and its subsidiaries or any person acting on behalf of the Company and
its subsidiaries including, without limitation, any director, officer, agent or
employee of the Company or its subsidiaries has not, directly or indirectly,
while acting on behalf of the Company and its subsidiaries (i) used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (ii) made any unlawful payment
to foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds; (iii) violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made
any other unlawful payment.

14

4.25    Environmental
Laws. Except
as would not, individually or in the aggregate, result in a Material Adverse
Effect, (i) the Company and its subsidiaries have been and are in compliance
with applicable Environmental Laws (as defined below), (ii) none of the Company,
any of its subsidiaries or, to the best of the Company’s knowledge, any other
owners of any of the real property owned, leased, operated or managed by the
Company or any of its subsidiaries (the “Properties”) at any time or any other
party, has at any time released (as such term is defined in CERCLA (as defined
below)) or otherwise disposed of Hazardous Materials (as defined below) on, to,
in, under or from the Properties or any other real properties previously owned,
leased or operated by the Company or any of its subsidiaries, (iii) neither the
Company nor any of its subsidiaries intends to use the Properties or any
subsequently acquired properties, other than in compliance with applicable
Environmental Laws, (iv) neither the Company nor any of its subsidiaries has
received any notice of, or has any knowledge of any occurrence or circumstance
which, with notice or passage of time or both, would give rise to a claim under
or pursuant to any Environmental Law with respect to the Properties, any other
real properties previously owned, leased or operated by the Company or any of
its subsidiaries, or their respective assets or arising out of the conduct of
the Company or its subsidiaries, (v) none of the Properties are included or, to
the best of the Company’s knowledge, proposed for inclusion on the National
Priorities List issued pursuant to CERCLA by the United States Environmental
Protection Agency or, to the best of the Company’s knowledge, proposed for
inclusion on any similar list or inventory issued pursuant to any other
Environmental Law or issued by any other Governmental Entity, (vi) none of the
Company, any of its subsidiaries or agents or, to the Company’s knowledge, any
other person or entity for whose conduct any of them is or may be held
responsible, has generated, manufactured, refined, transported, treated, stored,
handled, disposed, transferred, produced or processed any Hazardous Material at
any of the Properties, except in compliance with all applicable Environmental
Laws, and has not transported or arranged for the transport of any Hazardous
Material from the Properties or any other real properties previously owned,
leased or operated by the Company or any of its subsidiaries to another
property, except in compliance with all applicable Environmental Laws, (vii) no
lien has been imposed on the Properties by any Governmental Entity in connection
with the presence on or off such Property of any Hazardous Material, and (viii)
none of the Company, any of its subsidiaries or, to the Company’s knowledge, any
other person or entity for whose conduct any of them is or may be held
responsible, has entered into or been subject to any consent decree, compliance
order, or administrative order with respect to the Properties or any facilities
or improvements or any operations or activities thereon.

As used
herein, “Hazardous
Material” shall
include, without limitation, any flammable materials, explosives, radioactive
materials, hazardous materials, hazardous substances, hazardous wastes, toxic
substances or related materials, asbestos, petroleum, petroleum products and any
hazardous material as defined by any federal, state or local environmental law,
statute, ordinance, rule or regulation, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. §§ 9601-9675 (“CERCLA”), the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. §§ 5101-5127,
the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
§§ 6901-6992k, the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. §§ 11001-11050, the Toxic Substances Control Act, 15 U.S.C.
§§ 2601-2692, the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. §§ 136-136y, the Clean Air Act, 42 U.S.C. §§ 7401-7642, the
Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C.
§§ 1251-1387, the Safe Drinking Water Act, 42 U.S.C. §§ 300f-300j-26,
and the Occupational Safety and Health Act, 29 U.S.C. §§ 651-678, and any
analogous state laws, as any of the above may be amended from time to time and
in the regulations promulgated pursuant to each of the foregoing (including
environmental statutes and laws not specifically defined herein) (individually,
an “Environmental
Law” and
collectively, the “Environmental
Laws”) or by
any Governmental Entity.

15

4.26    Review
of Environmental Laws. In the
ordinary course of its business, the Company periodically reviews the effect of
Environmental Laws on the business, operations and properties of the Company and
its subsidiaries, and periodically identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties). On the
basis of such reviews and the amount of its established reserves, the Company
has reasonably concluded that such associated costs and liabilities would not,
individually or in the aggregate, result in a Material Adverse
Change.

4.27    REIT
Status. HHT is
organized in conformity with the requirements for qualification as a real estate
investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended
(the “Code”), and the present and contemplated method of operation of HHT and
its subsidiaries does and will enable HHT to meet the requirements for taxation
as a REIT under the Code.

4.28    OSHA
Compliance. Neither
the Company nor any of its subsidiaries is in violation of any federal or state
law or regulation relating to occupational safety and health and the Company and
its subsidiaries have received all permits, licenses or other approvals required
of them under applicable federal and state occupational safety and health and
environmental laws and regulations to conduct their respective businesses, and
the Company and each of its subsidiaries is in compliance with all terms and
conditions of any such permit, license or approval, except any such violation of
law or regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals which would not, singly or in the aggregate result in a
Material Adverse Effect. 

4.29    Information. The
information provided by the Company, HHT and the Trust pursuant to this
Agreement does not, as of the date hereof, and will not, as of the Closing Date,
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

Section
5.        
Representations
and Warranties of the Placement Agent. The
Placement Agent represents and warrants to, and agrees with, the Company and the
Trust as follows:

5.1     General
Solicitation. Neither
the Placement Agent, nor any of the Placement Agent’s affiliates, nor any person
acting on the Placement Agent’s or the Placement Agent’s Affiliate’s behalf has
engaged, or will engage, in any form of “general solicitation or general
advertising” (within the meaning of Regulation D under the Securities Act) in
connection with any offer or sale of the Preferred Securities.

16

5.2     Purchaser. The
Placement Agent has made such reasonable inquiry as is necessary to determine
that the Purchaser is acquiring the Preferred Securities for its own account,
the Purchaser does not intend to distribute the Preferred Securities in
contravention of the Securities Act or any other applicable securities
laws.

5.3     Qualified
Purchasers. The
Placement Agent has not offered or sold, and will not arrange for the offer or
sale of, the Preferred Securities except (i) to those the Placement Agent
reasonably believes are institutional “accredited investors” (within the meaning
of subparagraph (a)(1), (2), (3) or (7) of Rule 501 of Regulation D), (ii) in an
offshore transaction complying with Rule 903 of Regulation S or (iii) in any
other manner that does not require registration of the Preferred Securities
under the Securities Act. In connection with each such sale, the Placement Agent
has taken or will take reasonable steps to ensure that the Purchaser is aware
that (a) such sale is being made in reliance on an exemption under the
Securities Act and (b) future transfers of the Preferred Securities may not be
made except in compliance with applicable securities laws.

5.4     Offering
Circulars. Neither
the Placement Agent nor its representatives will include any nonpublic
information about the Company, the Trust or any of their affiliates in any
registration statement, prospectus, offering circular or private placement
memorandum used in connection with any purchase of Preferred Securities without
the prior written consent of the Trust and the Company.

Section
6.        Covenants
of the Offerors. The
Offerors covenant and agree with the Placement Agent and the Purchaser as
follows:

6.1     Compliance
with Representations and Warranties. During
the period from the date of this Agreement to the Closing Date, the Offerors and
HHT shall use their reasonable best efforts and take all action necessary or
appropriate to cause their representations and warranties contained in
Section 4 hereof
to be true as of the Closing Date, after giving effect to the transactions
contemplated by this Agreement, as if made on and as of the Closing
Date.

6.2     Sale
and Registration of Securities. Neither
the Company nor the Trust will, nor will either of them permit any of its
Affiliates to, nor will either of them permit any person acting on its or their
behalf (other than the Placement Agent and the Purchaser and their respective
affiliates) to, directly or indirectly, (i) resell any Preferred Securities that
have been acquired by any of them, (ii) sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in the
Securities Act) that would or could be integrated with the sale of the Preferred
Securities in any manner that would require the registration of the Securities
under the Securities Act or (iii) make offers or sales of any such Security, or
solicit offers to buy any such Security, under any circumstances that would
require the registration of any of such Securities under the Securities
Act.

6.3     Lock
Up. Neither
the Company, HHT nor the Trust will, until one hundred eighty (180) days
following the Closing Date, without the Purchaser’s prior written consent,
offer, sell, contract to sell, grant any option to purchase or otherwise dispose
of, directly or indirectly, (i) any Preferred Securities or other securities of
the Trust other than as contemplated by this Agreement or (ii) any other
securities convertible into, or exercisable or exchangeable for, any Preferred
Securities or other securities of the Trust.

17

6.4     Qualification
of Securities. The
Company and the Trust will arrange for the qualification of the Preferred
Securities for sale under the laws of such jurisdictions as the Placement Agent
may designate and will maintain such qualifications in effect so long as
required for the sale of the Preferred Securities. The Company or the Trust, as
the case may be, will promptly advise the Placement Agent of the receipt by the
Company or the Trust, as the case may be, of any notification with respect to
the suspension of the qualification of the Preferred Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.

6.5     Use of
Proceeds. The
Trust shall use the proceeds from the sale of the Preferred Securities and the
Common Securities to purchase the Junior Subordinated Notes from the
Company.

6.6     Investment
Company. So long
as any of the Securities are outstanding, (i) the Securities shall not be listed
on a national securities exchange registered under section 6 of the Exchange Act
or quoted in a U.S. automated interdealer quotation system, (ii) neither the
Company nor the Trust shall be an open-end investment company, unit investment
trust or face-amount certificate company that is, or is required to be,
registered under section 8 of the Investment Company Act, and, the Securities
shall otherwise satisfy the eligibility requirements of Rule 144A(d)(3) and
(iii) neither of the Offerors shall engage, or permit any subsidiary to engage,
in any activity which would cause it or any subsidiary to be an “investment
company” under the provisions of the Investment Company Act. 

6.7     Solicitation
and Advertising. Neither
the Company nor the Trust will, nor will either of them permit any of their
Affiliates or any person acting on their behalf to (other than the Placement
Agent, the Purchaser or their respective affiliates), (i) engage in any
“directed selling efforts” within the meaning of Regulation S under the
Securities Act or (ii) engage in any form of “general solicitation or general
advertising” (within the meaning of Regulation D) in connection with any offer
or sale of any of the Securities.

6.8     Compliance
with Rule 144A(d)(4) under the Securities Act. So long
as any of the Securities are outstanding and are “restricted securities” within
the meaning of Rule 144(a)(3) under the Securities Act, the Offerors will,
during any period in which they are not subject to and in compliance with
Section 13 or 15(d) of the Exchange Act, or the Offerors are not exempt from
such reporting requirements pursuant to and in compliance with Rule 12g3-2(b)
under the Exchange Act, provide to each holder of such restricted securities and
to each prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser in
connection with any proposed transfer, any information required to be provided
by Rule 144A(d)(4) under the Securities Act, if applicable. The information
provided by the Offerors pursuant to this Section
6.8 will
not, at the date thereof, contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. If the
Company and the Trust are required to register under the Exchange Act, such
reports filed in compliance with Rule 12g3-2(b) shall be sufficient information
as required above. This covenant is intended to be for the benefit of the
Purchaser, the holders of the Securities, and the prospective purchasers
designated by such holders, from time to time, of the Securities.

18

6.9     Reports. HHT
shall furnish to (i) the Placement Agent, (ii) the Purchaser and any subsequent
holder of the Securities, and (iii) any beneficial owner of the Securities
reasonably identified to HHT (which identification may be made by either such
beneficial owner or by the Purchaser), a duly completed and executed certificate
in the form attached hereto as Annex F, including the financial statements
referenced in such Annex, which certificate and financial statements shall be so
furnished by HHT not later than forty-five (45) days after the end of each of
the first three fiscal quarters of each fiscal year of HHT and not later than
ninety (90) days after the end of each fiscal year of HHT. The
delivery requirements under this Section 6.9 may be satisfied by compliance with
Section 7.3(b) of the Indenture.

Section
7.        
Covenants
of the Placement Agent. The
Placement Agent covenants and agrees with the Offerors that, during the period
from the date of this Agreement to the Closing Date, the Placement Agent shall
use its best efforts and take all action necessary or appropriate to cause its
representations and warranties contained in Section
5 to be
true as of the Closing Date, after giving effect to the transactions
contemplated by this Agreement, as if made on and as of the Closing Date. The
Placement Agent further covenants and agrees not to engage in hedging
transactions with respect to the Preferred Securities unless such transactions
are conducted in compliance with the Securities Act.

Section
8.        
Indemnification
& Contribution.

8.1     Indemnification.

8.1.1  
  The
Company, HHT and the Trust agree jointly and severally to indemnify and hold
harmless the Placement Agent, the Purchaser, the Placement Agent’s affiliates, a
Subsequent Purchaser (collectively, the “Indemnified Parties”) and the
Indemnified Parties’ respective directors, officers, employees and agents and
each person who “controls” the Indemnified Parties within the meaning of either
the Securities Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in any information or documents furnished or made
available to the Purchaser or the Placement Agent by or on behalf of the
Company, (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (iii) the breach or alleged breach of any representation,
warranty or agreement of either Offeror or HHT contained herein, and agrees to
reimburse each such Indemnified Party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which the Company, HHT or the
Trust may otherwise have.

19

8.1.2   Promptly
after receipt by an Indemnified Party under this Section 8 of
notice of the commencement of any action, such Indemnified Party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8,
promptly notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve
the indemnifying party from liability under Section
8.1.1 above
unless and to the extent that such failure results in the forfeiture by the
indemnifying party of material rights and defenses and (ii) will not, in
any event, relieve the indemnifying party from any obligations to any
Indemnified Party other than the indemnification obligation provided in
Section
8.1.1 above.
The Placement Agent shall be entitled to appoint counsel to represent the
Indemnified Party in any action for which indemnification is sought. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the Indemnified Party) also be counsel to the
Indemnified Party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all Indemnified Parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. An
indemnifying party will not, without the prior written consent of the
Indemnified Parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not the Indemnified Parties are actual or potential parties to such claim,
action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of each Indemnified Party from all liability
arising out of such claim, action, suit or proceeding.

8.2     Contribution.

8.2.1   
  In order
to provide for just and equitable contribution in circumstances under which the
indemnification provided for in Section
8.1 hereof
is for any reason held to be unenforceable for the benefit of an Indemnified
Party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such Indemnified Party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Offerors, on the
one hand, and the Placement Agent, on the other hand, from the offering of the
Securities or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause
(i) above,
but also the relative fault of the Offerors, on the one hand, and the Placement
Agent, on the other hand, in connection with the statements, omissions or
breaches, which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.

8.2.2   The
relative benefits received by the Offerors and HHT, on the one hand, and the
Placement Agent, on the other hand, in connection with the offering of the
Securities shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Securities (before deducting expenses)
received by the Offerors and HHT and the Commission received by the Placement
Agent bear to the aggregate of such net proceeds and
Commission.

20

8.2.3   The
Offerors and HHT and the Placement Agent agree that it would not be just and
equitable if contribution pursuant to this Section 8.2 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 8.2. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an Indemnified Party and referred to above in this Section 8.2 shall be
deemed to include any legal or other expenses reasonably incurred by such
Indemnified Party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement, omission or alleged omission or breach or
alleged breach.

8.2.4   Notwithstanding
any provision of this Section 8 to the
contrary, the Placement Agent shall not be required to contribute any amount in
excess of the amount of the Commission.

8.2.5   No person
guilty of fraudulent misrepresentation (within the meaning of section 11(f)
of the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.

8.2.6   For
purposes of this Section 8.2, the
Placement Agent, each person, if any, who controls the Placement Agent within
the meaning of section 15 of the Securities Act or section 20 of the
Exchange Act and the respective partners, directors, officers, employees and
agents of the Placement Agent or any such controlling person shall have the same
rights to contribution as the Placement Agent, while each officer and director
of the Company, each trustee of the Trust and each person, if any, who controls
the Company within the meaning of section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution
as the Offerors.

8.3      Additional
Remedies. The
indemnity and contribution agreements contained in this Section
8 are in
addition to any liability that the Offerors and HHT may otherwise have to any
Indemnified Party.

8.4     Additional
Indemnification. The
Company shall indemnify and hold harmless the Trust against all loss, liability,
claim, damage and expense whatsoever, as due from the Trust under Sections
8.1 through
8.3
hereof.

Section
9.        
Rights
and Responsibilities of Placement Agent.

9.1     Reliance. In
performing its duties under this Agreement, the Placement Agent shall be
entitled to rely upon any notice, signature or writing which it shall in good
faith believe to be genuine and to be signed or presented by a proper party or
parties. The Placement Agent may rely upon any opinions or certificates or other
documents delivered by the Offerors, HHT or their counsel or designees to either
the Placement Agent or the Purchaser.

9.2     Rights
of Placement Agent. In
connection with the performance of its duties under this Agreement, the
Placement Agent shall not be liable for any error of judgment or any action
taken or omitted to be taken unless the Placement Agent was grossly negligent or
engaged in willful misconduct in connection with such performance or
non-performance. No provision of this Agreement shall require the Placement
Agent to expend or risk its own funds or otherwise incur any financial liability
on behalf of the Purchaser in connection with the performance of any of its
duties hereunder. The Placement Agent shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement.

21

Section
10.      
Termination. This
Agreement shall be subject to termination in the absolute discretion of the
Placement Agent, by notice given to the Company and the Trust prior to delivery
of and payment for the Preferred Securities, if prior to such time (i) a
downgrading shall have occurred in the rating accorded the Company’s or HHT’s
debt securities or preferred stock by any “nationally recognized statistical
rating organization,” as that term is used by the SEC in Rule
15c3-1(c)(2)(vi)(F) under the Exchange Act, or such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of the Company’s or HHT’s debt securities or
preferred stock, (ii) the Trust shall be unable to sell and deliver to the
Purchaser at least $25,000,000 stated liquidation value of Preferred Securities,
(iii) a suspension or material limitation in trading in securities generally
shall have occurred on the New York Stock Exchange, (iv) a suspension or
material limitation in trading in any of the Company’s or HHT’s securities shall
have occurred on the exchange or quotation system upon which the Company’s or
HHT’s securities are traded, if any, (v) there shall have occurred any
outbreak or escalation of hostilities, or declaration by the United States of a
national emergency or war or other calamity or crisis the effect of which on
financial markets is such as to make it, in the Placement Agent’s or Purchaser’s
judgment, impracticable or inadvisable to proceed with the offering or delivery
of the Preferred Securities.

Section
11.      
Miscellaneous.

11.1   Disclosure
Schedule. The term
“Disclosure Schedule,” as used herein, means the schedule, if any, attached to
this Agreement that sets forth items the disclosure of which is necessary or
appropriate as an exception to one or more representations or warranties
contained in Section
4 hereof.
The Disclosure Schedule shall be arranged in paragraphs corresponding to the
section numbers contained in Section
4. Nothing
in the Disclosure Schedule shall be deemed adequate to disclose an exception to
a representation or warranty made herein unless the Disclosure Schedule
identifies the exception with reasonable particularity and describes the
relevant facts in reasonable detail. Without limiting the generality of the
immediately preceding sentence, the mere listing (or inclusion of a copy) of a
document or other item in the Disclosure Schedule shall not be deemed adequate
to disclose an exception to a representation or warranty made herein unless the
representation or warranty has to do with the existence of the document or other
item itself. Information provided by the Company in response to any due
diligence questionnaire shall not be deemed part of the Disclosure Schedule and
shall not be deemed to be an exception to one or more representations or
warranties contained in Section
4 hereof
unless such information is specifically included on the Disclosure Schedule in
accordance with the provisions of this Section
11.1.

11.2   Notices. All
communications hereunder will be in writing and effective only on receipt, and
will be mailed, delivered by hand or courier or sent by facsimile and
confirmed:

22

If to the
Placement Agent, to:

Credit
Suisse First Boston LLC

Eleven
Madison Avenue

New York,
New York 10010-3629

Facsimile:
(212) 743-5043

Attention:
The CDO Group

with a
copy to:

Thacher
Proffitt & Wood llp

Two World
Financial Center

New York,
New York 10281

Facsimile:
(212) 912-7751

Telephone:
(212) 912-7400

Attention:
Mark I. Sokolow, Esq. 

if to the
Offerors or HHT, to:

Hersha
Hospitality Limited Partnership

510
Walnut Street, 9th
Floor

Philadelphia,
Pennsylvania 19106

Facsimile:
215-238-0157

Telephone:
215-238-1046

Attention:
Chief Financial Officer

 

with a
copy to:

Hunton
& Williams llp

Riverfront
Plaza, East Tower

951 East
Byrd Street

Richmond,
Virginia 23219

Facsimile:
(804) 788-8218

Telephone:
(804) 788-8200

Attention:
James S. Seevers, Jr., Esq. 

All such
notices and communications shall be deemed to have been duly given (i) at the
time delivered by hand, if personally delivered, (ii) five business days after
being deposited in the mail, postage prepaid, if mailed, (iii) when answered
back, if telexed, (iv) the next business day after being telecopied, or (v) the
next business day after timely delivery to a courier, if sent by overnight air
courier guaranteeing next-day delivery. From and after the Closing, the
foregoing notice provisions shall be superseded by any notice provisions of the
Operative Documents under which notice is given. The Placement Agent, the
Company, HHT and their respective counsel, may change their respective notice
addresses, from time to time, by written notice to all of the foregoing
persons.

11.3   Parties
in Interest, Successors and Assigns. This
Agreement will inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
other than the parties hereto and the affiliates, directors, officers,
employees, agents and controlling persons referred to in Section
8 hereof,
their successors, assigns, heirs and legal representatives, and any Subsequent
Purchaser, any right or obligation hereunder. None of the rights or obligations
of the Company, HHT or the Trust under this Agreement may be assigned, whether
by operation of law or otherwise, without the Placement Agent’s prior written
consent. The rights and obligations of the Placement Agent and Purchaser under
this Agreement may be assigned by such party without the Company’s, HHT’s or the
Trust’s consent; provided that the assignee assumes the obligations of such
party under this Agreement.

23

11.4   Amendments. This
Agreement may not be modified, amended, altered or supplemented, except upon the
execution and delivery of a written agreement by each of the parties
hereto.

11.5   Counterparts
and Facsimile. This
Agreement may be executed by any one or more of the parties hereto in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument. This
Agreement may be executed by any one or more of the parties hereto by
facsimile.

11.6   Headings. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.

11.7   Governing
Law. THIS
AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW
(OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).

11.8   Submission
to Jurisdiction. ANY
LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR
ARISING OUT OF THIS AGREEMENT MAY BE BROUGHT IN OR REMOVED TO THE COURTS OF THE
STATE OF NEW YORK, IN AND FOR THE COUNTY OF NEW YORK, OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE SITTING IN THE
BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY
ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS (AND COURTS OF APPEALS
THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT.

11.9   Entire
Agreement. This
Agreement, together with the Operative Documents and the other documents
delivered in connection with the transactions contemplated by this Agreement, is
intended by the parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein. This Agreement, together with
the Operative Documents and the other documents delivered in connection with the
transaction contemplated by this Agreement, supersedes all prior agreements and
understandings between the parties with respect to such subject
matter.

24

11.10  
  Severability. In the
event that any one or more of the provisions contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected, it being
intended that all of the Placement Agent’s and the Purchaser’s rights and
privileges shall be enforceable to the fullest extent permitted by
law.

11.11  
  Survival. The
respective agreements, representations, warranties, indemnities and other
statements of the Company, HHT and the Trust and their respective officers or
trustees and of the Placement Agent set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of the Placement Agent, the Purchaser, the Company, HHT or
the Trust or any of their respective officers, directors, trustees or
controlling persons, and will survive delivery of and payment for the Preferred
Securities. The provisions of Sections
2.4 and
8 shall
survive the termination or cancellation of this Agreement.

Signatures
appear on the following page

 

25

If this
Agreement is satisfactory to you, please so indicate by signing the acceptance
of this Agreement and deliver such counterpart to the Offerors whereupon this
Agreement will become binding between us in accordance with its
terms.

Very
truly yours,

	 	 
	 	
      Hersha
      Hospitality Limited Partnership

	 	 
	 	
      By:
      Hersha Hospitality Trust, its general partner

	 	 
	 	
      By:
	 
	 	 	
      Name:

	 	 	
      Title:

	 	 
	 	
      Hersha
      Hospitality Trust

	 	 
	 	
      By:
	
       

	 	 	
      Name:

	 	 	
      Title:

	 	 
	 	
      Hersha
      Statutory Trust II

	 	
      By:
      Hersha Hospitality Limited Partnership, as Depositor

	 	 
	 	
      By:
	 
	 	 	
      Name:

	 	 	
      Title:

CONFIRMED
AND ACCEPTED

as of the
date first set forth above

 

	
      Credit
      Suisse First Boston LLC, as Placement Agent
	 
	
      By:
	 	 
	 	
      Name:
	 
	 	
      Title:
	 

 

26

 

Schedule
1

 

List of
Significant Subsidiaries

 44 New
England Management Company, a Virginia corporation

27

EXHIBIT
A

FORM OF
SUBSCRIPTION AGREEMENT

PREFERRED
SECURITIES SUBSCRIPTION AGREEMENT

May 31,
2005

THIS
PREFERRED SECURITIES SUBSCRIPTION AGREEMENT (this
“Agreement”) made among Hersha Statutory Trust II (the “Trust”), a statutory
trust created under the Delaware Statutory Trust Act (12 Del. C. §3801,
et
seq.),
Hersha Hospitality Limited Partnership, a Virginia limited partnership, with its
principal offices located at 510 Walnut Street, 9th Floor,
Philadelphia, Pennsylvania 19106 (the “Company” and, together with the Trust,
the “Offerors”), Hersha Hospitality Trust, a Maryland corporation (“HHT”) and
Credit Suisse First Boston, acting through its Cayman Islands branch, a Swiss
banking corporation (the “Purchaser”), and Credit Suisse First Boston LLC (as to
Sections 1.2, 1.3 and Article III).

RECITALS:

A.   The Trust
desires to issue TWENTY-FIVE
MILLION
($25,000,000) DOLLARS of its
Preferred Securities (the “Preferred Securities”), liquidation amount $1,000 per
Preferred Security, representing an undivided beneficial interest in the assets
of the Trust (the “Offering”), to be issued pursuant to an Amended and Restated
Trust Agreement (the “Trust Agreement”) by and among the Company, Wilmington
Trust Company, as Property Trustee (the “Property Trustee”), Wilmington Trust
Company, as Delaware Trustee the administrative trustees named therein and the
Holders (as defined therein); and

B.   The
proceeds from the sale of the Preferred Securities will be combined with the
proceeds from the sale by the Trust to the Company of its Common Securities, and
will be used by the Trust to purchase an equivalent amount of Junior
Subordinated Notes of the Company (the “Notes”) to be issued by the Company
pursuant to an indenture (the “Indenture”) to be executed by the Company and
Wilmington Trust Company as Indenture Trustee; and 

C.   In
consideration of the premises and the mutual representations and covenants
hereinafter set forth, the parties hereto agree as follows:

Article
I

PURCHASE
AND SALE OF PREFERRED SECURITIES

1.1   Upon the
execution of this Agreement, the Purchaser hereby agrees to purchase, directly
or indirectly, from the Trust, Preferred Securities at a price equal to $1,000
per Preferred Security for an aggregate purchase price equal to TWENTY-FIVE
MILLION
($25,000,000) DOLLARS (the
“Purchase Price”) and the Trust agrees to sell such Preferred Securities to the
Purchaser for said Purchase Price. The rights and preferences of the Preferred
Securities are set forth in the Trust Agreement. The closing of the sale and
purchase of the Preferred Securities shall occur on May 31, 2005, or such other
later date (not later than June 29, 2005) as the parties may designate (the
“Closing Date”). The Purchase Price is payable in immediately available funds on
the Closing Date. The Offerors shall provide the Purchaser payment instructions
no later than two (2) days prior to the Closing Date.

A-1

1.2   The
Placement Agreement, dated as of May 31, 2005 (the “Placement Agreement”), among
the Offerors, HHT and the Placement Agent identified therein (the “Placement
Agent”) includes certain representations and warranties, covenants and
conditions to closing and certain other matters governing the Offering. The
Placement Agreement is hereby incorporated by reference into this Agreement, and
the Purchaser shall be entitled to each of the benefits of the Placement Agent
and the Purchaser under the Placement Agreement and shall be entitled to enforce
the obligations of the Offerors and HHT under such Placement Agreement as fully
as if the Purchaser were a party to such Placement Agreement.

1.3   The
Purchaser is purchasing the Preferred Securities in its capacity as a warehouse
lender, and Purchaser may resell the Preferred Securities to a subsequent
purchaser (any such purchaser from the Purchaser being referred to hereinafter
as a “Subsequent Purchaser”). Upon transfer of the Preferred Securities to a
Subsequent Purchaser, the Subsequent Purchaser shall be entitled to each of the
benefits of the Placement Agent and the Purchaser under the Placement Agreement
and this Agreement, and shall be entitled to enforce the obligations of the
Offerors and HHT under the Placement Agreement and this Agreement, as fully as
if the Subsequent Purchaser were a party to the Placement Agreement and this
Agreement.

Article
II

REPRESENTATIONS
AND WARRANTIES OF PURCHASER

2.1   The
Purchaser understands and acknowledges that the Preferred Securities and the
Notes (i) have not been registered under the Securities Act of 1933, as amended
(the “Securities Act”), or any other applicable securities law, (ii) are being
offered for sale by the Offerors in transactions not requiring registration
under the Securities Act and (iii) may not be offered, sold, pledged or
otherwise transferred by the Purchaser except in compliance with the
registration requirements of the Securities Act or any other applicable
securities laws, pursuant to an exemption therefrom or in a transaction not
subject thereto.

2.2   Neither
the Purchaser nor any
of the Purchaser’s affiliates, nor any person acting on the Purchaser’s or the
Purchaser’s Affiliate’s behalf has engaged, or will engage, in any form of
"general solicitation or general advertising" (within the meaning of Regulation
D under the Securities Act) or "directed selling efforts" (within the meaning of
Regulation S under the Securities Act) in connection with any offer or sale of
the Preferred Securities.

2.3   The
Purchaser represents and warrants that it is purchasing the Preferred Securities
for its own account and not with a view to, or for offer or sale in connection
with, any distribution thereof in violation of the Securities Act or other
applicable securities laws, subject to any requirement of law that the
disposition of its property be at all times within its control and subject to
its ability to resell such Preferred Securities pursuant to an effective
registration statement under the Securities Act or under Rule 144A or any other
exemption from registration available under the Securities Act or any other
applicable securities law. The Purchaser understands that no public market
exists for any of the Preferred Securities, and that it is unlikely that a
public market will ever exist for the Preferred Securities.

A-2

2.4   The
Purchaser represents and warrants that (a) it has consulted with its own legal,
regulatory, tax, business, investment, financial and accounting advisers in
connection herewith to the extent it has deemed necessary; (b) it has had a
reasonable opportunity to ask questions of and receive answers from officers and
representatives of the Offerors concerning their respective financial condition
and results of operations and the purchase of the Preferred Securities and any
such questions have been answered to its satisfaction; (c) it has had the
opportunity to review all publicly available records and filings concerning the
Offerors and it has carefully reviewed such records and filings that it
considers relevant to making an investment decision; and (d) it has made its own
investment decisions based upon its own judgment, due diligence and advice from
such advisers as it has deemed necessary and not upon any view expressed by the
Offerors or the Placement Agent.

2.5   The
Purchaser represents and warrants that it is an institutional “accredited
investor” within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
of Regulation D under the Securities Act. 

Article
III

MISCELLANEOUS

3.1   Any
notice or other communication given hereunder shall be deemed sufficient if in
writing and sent by registered or certified mail, return receipt requested,
international courier or delivered by hand against written receipt therefor, or
by facsimile transmission and confirmed by telephone, to the following
addresses, or such other address as may be furnished to the other parties as
herein provided:

	 	
      To
      the Offerors and HTT:
	
      Hersha
      Hospitality Limited Partnership

510
Walnut Street, 9th
Floor

Philadelphia,
Pennsylvania 19106

Fax:
215-238-0157

Attention:
Chief Financial Officer

	 	
      To
      the Purchaser:
	
      Credit
      Suisse First Boston, acting through its Cayman Islands
    branch

c/o
Credit Suisse First Boston LLC

Eleven
Madison Avenue

New York,
New York 10010-3629

Fax:
(212) 743-5043

Attention:
The CDO Group

 

Unless
otherwise expressly provided herein, notices shall be deemed to have been given
on the date of mailing, except notice of change of address, which shall be
deemed to have been given when received.

 

3.2   This
Agreement shall not be changed, modified or amended except by a writing signed
by the parties to be charged, and this Agreement may not be discharged except by
performance in accordance with its terms or by a writing signed by the party to
be charged.

A-3

3.3   Upon the
execution and delivery of this Agreement by the Purchaser, this Agreement shall
become a binding obligation of the Purchaser with respect to the purchase of
Preferred Securities as herein provided.

3.4   NOTWITHSTANDING
THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE
PARTIES EXPRESSLY AGREE THAT ALL THE TERMS AND PROVISIONS HEREOF SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

3.5   The
parties agree to execute and deliver all such further documents, agreements and
instruments and take such other and further action as may be necessary or
appropriate to carry out the purposes and intent of this Agreement.

3.6   This
Agreement may be executed in one or more counterparts each of which shall be
deemed an original, but all of which shall together constitute one and the same
instrument.

3.7   In the
event that any one or more of the provisions contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected, it being
intended that all of the Offerors’ and the Purchaser’s rights and privileges
shall be enforceable to the fullest extent permitted by law.

 

Signatures
appear on the following page

A-4

 

IN
WITNESS WHEREOF, this Agreement is agreed to and accepted as of the day and year
first written above.

	
      CREDIT
      SUISSE FIRST BOSTON,
      acting through its Cayman Islands branch, as Purchaser
	 
	 	 	 
	
      By:
	
        
      
	 
	 	
      Name:
	 
	 	
      Title:
	 
	 	 	 
	 	 	 
	
      By:
	
        
      
	 
	 	
      Name:
	 
	 	
      Title:
	 
	 	 	 
	
      CREDIT
      SUISSE FIRST BOSTON LLC

      (for
      purposes of the rights and obligations in Sections
      1.2, 1.3 and Article III only)
	 
	 	 	 
	
      By:
	
        
      
	 
	 	
      Name:
	 
	 	
      Title:
	 
	 	 	 
	
      HERSHA
      HOSPITALITY LIMITED PARTNERSHIP
	 
	 	 
	
      By:
      Hersha Hospitality Trust, its general partner
	 
	 	 	 
	
      By:
	
        
      
	 
	 	
      Name:
	 
	 	
      Title:
	 
	 	 	 
	
      HERSHA
      HOSPITALITY TRUST
	 
	
      (for
      purpose of the rights and obligations in Sections 1.2, 1.3 and Article III
      only)
	 
	 	 	 
	
      By:
	
        
      
	 
	 	
      Name:
	 
	 	
      Title:
	 
	 	 	 

 

A-5

    

EXHIBIT
B-1

 

FORM OF
THACHER PROFFITT & WOOD LLP OPINION

Pursuant
to Section 3.2(a) of the Placement Agreement, Thacher Proffitt & Wood LLP,
special counsel for the Placement Agent and Purchaser, shall deliver an opinion
to the effect that:

	
      (i)
	
      the
      Company and each Significant Subsidiary is validly existing as a
      corporation in good standing under the laws of the jurisdiction in which
      it is chartered or organized; the Company has corporate power and
      authority to (a) execute and deliver, and to perform its obligations
      under, the Operative Documents to which it is a party and (b) issue and
      perform its obligations under the Notes;

	
      (ii)
	
      neither
      the issue and sale of the Common Securities, the Preferred Securities or
      the Junior Subordinated Notes, nor the purchase by the Trust of the Junior
      Subordinated Notes, nor the execution and delivery of and compliance with
      the Operative Documents by the Company or the Trust nor the consummation
      of the transactions contemplated thereby will constitute a breach or
      violation of the Trust Agreement or the charter or by-laws of the
      Company;

	
      (iii)
	
      the
      Amended and Restated Trust Agreement has been duly authorized, executed
      and delivered by the Company and duly executed and delivered by the
      Administrative Trustees;

	
      (iv)
	
      the
      Indenture has been duly authorized, executed and delivered by the Company
      and, assuming it has been duly authorized, executed and delivered by the
      Indenture Trustee, constitutes a legal, valid and binding obligation of
      the Company enforceable against the Company in accordance with its terms,
      subject to applicable bankruptcy, insolvency and similar laws affecting
      creditors’ rights generally and to general principles of
      equity; 

	
      (v)
	
      the
      Junior Subordinated Notes have been duly authorized and executed by the
      Company and delivered to the Indenture Trustee for authentication in
      accordance with the Indenture and, when authenticated in accordance with
      the provisions of the Indenture and delivered to the Trust against payment
      therefor, will constitute legal, valid and binding obligations of the
      Company entitled to the benefits of the Indenture and enforceable against
      the Company in accordance with their terms, subject to applicable
      bankruptcy, insolvency and similar laws affecting creditors’ rights
      generally and to general principles of equity;

	
      (vi)
	
      the
      Trust is not, and, following the issuance of the Preferred Securities and
      the consummation of the transactions contemplated by the Operative
      Documents and the application of the proceeds therefrom, the Trust will
      not be, an “investment company” or an entity “controlled” by an
      “investment company,” in each case within the meaning of the Investment
      Company Act; 

	
      (vii)
	
      assuming
      (a) the accuracy of the representations and warranties, and compliance
      with the agreements contained in the Placement Agreement and (b) that the
      Preferred Securities are sold in a manner contemplated by, and in
      accordance with the Placement Agreement, Subscription Agreement and the
      Amended and Restated Trust Agreement, it is not necessary in connection
      with the offer, sale and delivery of the Preferred Securities by the Trust
      to the Purchaser, to register any of the Securities under the Securities
      Act or to require qualification of the Indenture under the Trust Indenture
      Act of 1939, as amended;

B-1-1

	
      (viii)
	
      the
      Placement Agreement and Subscription Agreement have been duly authorized,
      executed and delivered by the Company; 

	
      (ix)
	
      the
      Subscription Agreement has been duly executed and delivered by the
      Administrative Trustees; and 

	
      (x)
	
      the
      Indenture constitutes the legal, valid and binding obligation of
      Wilmington Trust Company enforceable against Wilmington Trust Company in
      accordance with its terms, subject to applicable bankruptcy, insolvency
      and similar laws affecting creditors’ rights generally and to general
      principles of equity. 

In
rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of New York, the Delaware General
Corporation Law and the federal laws of the United States; (B) as to
matters involving the application of laws of any jurisdiction other than the
State of New York and the Delaware General Corporation Law or the federal
laws of the United States, (i) rely, to the extent deemed proper and
specified in such opinion, upon the opinion of other counsel of good standing
believed to be reliable and who are satisfactory to the Purchaser or (ii) assume
such law is substantially similar to the law of the State of New York and, (C)
as to matters of fact, rely to the extent deemed proper, on certificates of
responsible officers of the Company and public officials.

 

B-1-2

 

EXHIBIT
B-2

FORM OF
COMPANY COUNSEL OPINION

OR
OFFICERS’ CERTIFICATE

Pursuant
to Section 3.2(b) of the Placement Agreement, counsel for the Company shall
deliver an opinion, or the Company shall provide an Officers’ Certificate, to
the effect that:

	
      (i)
	
      all
      of the issued and outstanding shares of capital stock of each Significant
      Subsidiary are owned of record by the Company, and the issuance of the
      Preferred Securities and the Common Securities is not subject to any
      contractual preemptive rights known to such
officer;

	
      (ii)
	
      no
      consent, approval, authorization or order of any court or governmental
      authority is required for the issue and sale of the Common Securities, the
      Preferred Securities or the Junior Subordinated Notes, the purchase by the
      Trust of the Junior Subordinated Notes, the execution and delivery of and
      compliance with the Operative Documents by the Company or the Trust or the
      consummation of the transactions contemplated in the Operative Documents,
      except such approvals (specified in such certificate) as have been
      obtained;

	
      (iii)
	
      to
      the knowledge of such officer, there is no action, suit or proceeding
      before or by any government, governmental instrumentality, arbitrator or
      court, domestic or foreign, now pending or threatened against or affecting
      the Trust or the Company or any Significant Subsidiary that could
      adversely affect the consummation of the transactions contemplated by the
      Operative Documents or could have a Material Adverse
    Effect;

	
      (iv)
	
      the
      Company is not and, immediately following consummation of the transactions
      contemplated hereby and the application of the net proceeds therefrom, the
      Company will not be, an “investment company” or an entity “controlled” by
      an “investment company” by virtue of section [ ] of the Investment Company
      Act; and the Trust is not, and immediately following the consummation of
      the transactions contemplated hereby and the application of the net
      proceeds therefrom, the Trust will not be, an “investment company” or an
      entity “controlled” by an “investment company,” within the meaning of the
      Investment Company Act;

	
      (v)
	
      The
      execution, delivery and performance of the Operative Documents, as
      applicable, by the Company and the Trust and the consummation by the
      Company and the Trust of the transactions contemplated by the Operative
      Documents, as applicable, (a) will not result in any violation of the
      charter or bylaws of the Company, the charter or bylaws of any Significant
      Subsidiary, the Amended and Restated Trust Agreement or the Certificate of
      Trust, and (b) will not conflict with, or result in a breach of any of the
      terms or provisions of, or constitute a default (or an event which, with
      notice or lapse of time or both, would constitute a default) under, or
      result in the creation or imposition of any lien, charge and encumbrance
      upon any assets or properties of the Company or any Significant Subsidiary
      under, (A) any agreement, indenture, mortgage or instrument that the
      Company or any Significant Subsidiary of the Company is a party to or by
      which it may be bound or to which any of its assets or properties may be
      subject, or (B) any existing applicable law, rule or administrative
      regulation of any court or governmental agency or authority having
      jurisdiction over the Company or any Significant Subsidiary of the Company
      or any of their respective assets or properties, except in case of (b),
      where any such violation, conflict, breach, default, lien, charge or
      encumbrance, would not have a material adverse effect on the assets,
      properties, business, results of operations or financial condition of the
      Company and its subsidiaries, taken as
whole.

B-2-1

All terms
used but not defined herein shall have the meanings assigned to them in the
Placement Agreement. A Subsequent Purchaser shall be entitled to rely on this
certificate.

 

B-2-2

 

EXHIBIT
B-3

FORM OF
TAX COUNSEL OPINION

Pursuant
to Section 3.2(c) of the Placement Agreement, Thacher Proffitt & Wood LLP,
special tax counsel for the Placement Agent and Purchaser, shall deliver an
opinion to the effect that:

	
      (i)
	
      the
      Trust will be classified for United States federal income tax purposes as
      a grantor trust and not as an association or a publicly traded partnership
      taxable as a corporation; and

	
      (ii)
	
      for
      United States federal income tax purposes, the Junior Subordinated Notes
      will constitute indebtedness.

In
rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of New York and the federal laws of the
United States and (B) rely as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of the Company and public
officials.

 

B-3-1

 

EXHIBIT
B-4

 

FORM OF
DELAWARE COUNSEL TRUST OPINION

Pursuant
to Section 3.2(d) of the Placement Agreement, Morris,
James, Hitchens & Williams LLP, special
Delaware counsel for the Trust, shall deliver an opinion to the effect
that:

	(i)	
      The
      Trust has been duly created and is validly existing in good standing as a
      statutory trust under the Act, and all filings required under the laws of
      the State of Delaware with respect to the creation and valid existence of
      the Trust as a statutory trust have been
made.

	(ii)	
      Under
      the Act and the Trust Agreement, the Trust has the trust power and
      authority (i) to own property and conduct its business, all as described
      in the Trust Agreement, (ii) to execute and deliver, and to perform its
      obligations under, each of the Trust Documents, the Preferred Securities
      and the Common Securities, and (iii) to purchase and hold the
      Notes.

	(iii)	
      Under
      the Act, the certificate attached to the Trust Agreement as Exhibit C is
      an appropriate form of certificate to evidence ownership of the Preferred
      Securities. The Preferred Securities have been duly authorized by the
      Trust Agreement and, when issued in accordance with the Trust Agreement
      and delivered against payment therefor in accordance with the Trust
      Agreement and the Subscription Agreement, the Preferred Securities will be
      validly issued and (subject to the qualifications set forth in this
      paragraph) fully paid and nonassessable and will represent undivided
      beneficial interests in the assets of the Trust, and the Preferred
      Security Holders will be entitled to the benefits of the Trust Agreement.
      The Preferred Security Holders as beneficial owners of the Trust, will be
      entitled to the same limitation of personal liability extended to
      stockholders of private corporations for profit organized under the
      General Corporation Law of the State of Delaware. The Preferred Security
      Holders may be obligated to make payments or provide indemnity or security
      as set forth in the Trust
Agreement.

	(iv)	
      The
      Common Securities have been duly authorized by the Trust Agreement and,
      when issued in accordance with the Trust Agreement and delivered against
      payment therefor in accordance with the Trust Agreement and the Common
      Securities Subscription Agreement, will be validly issued and will
      represent undivided beneficial interests in the assets of the Trust, and
      the Common Security Holder will be entitled to the benefits of the Trust
      Agreement.

	(v)	
      Under
      the Act and the Trust Agreement, the issuance of the Trust Securities is
      not subject to preemptive or other similar
rights.

	(vi)	
      Under
      the Act and the Trust Agreement, the execution and delivery by the Trust
      of the Trust
      Documents, and the performance by the Trust of its obligations thereunder,
      have been duly authorized by all necessary trust action on the part of the
      Trust.

	(vii)	
      The
      Trust Agreement constitutes a legal, valid and binding obligation of the
      Company and the Trustees, enforceable against the Company and the Trustees
      in accordance with its terms.

B-4-1

	(viii)	
      The
      issuance and sale by the Trust of the Trust Securities, the purchase by
      the Trust of the Notes, the execution, delivery and performance by the
      Trust of the Trust Documents, the consummation by the Trust of the
      transactions contemplated by the Trust Documents, and compliance by the
      Trust with its obligations thereunder are not prohibited by (i) the
      Certificate of Trust or the Trust Agreement, or (ii) any law or regulation
      of the State of Delaware applicable to the
Trust.

	(ix)	
      No
      filing with, or authorization, approval, consent, license, order,
      registration, qualification or decree of, any Delaware court or Delaware
      governmental authority or Delaware agency is required solely in connection
      with the issuance and sale by the Trust of the Trust Securities, the
      purchase by the Trust of the Notes, the execution, delivery and
      performance by the Trust of the Trust Documents, the consummation by the
      Trust of the transactions contemplated by the Trust Documents, and
      compliance by the Trust with its obligations
thereunder.

	(x)	
      The
      Preferred Security Holders (other than those Preferred Security Holders
      who reside or are domiciled in the State of Delaware) will have no
      liability for income taxes imposed by the State of Delaware solely as a
      result of their participation in the Trust
      and the Trust wi1l not be liable for any income tax imposed by the State
      of Delaware.

In
rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware and (B) rely as to matters of
fact, to the extent deemed proper, on certificates of responsible officers of
the Company and public officials.

 

B-4-2

 

EXHIBIT
B-5

 

FORM OF
TRUSTEE COUNSEL OPINION

Pursuant
to Section 3.2(e) of the Placement Agreement, Morris,
James, Hitchens & Williams LLP, special
counsel for the Property Trustee, the Delaware Trustee and the Indenture
Trustee, shall deliver an opinion to the effect that:

	(i)	
      WTC
      is duly incorporated and validly existing as a Delaware banking
      corporation in good standing under the laws of the State of Delaware with
      trust powers and its principal place of business in the State of
      Delaware.

	(ii)	
      WTC
      has requisite corporate power and authority to execute and deliver, and to
      perform its obligations under, the Trustee
Documents.

	(iii)	
      The
      execution, delivery, and performance by WTC of the Trustee Documents have
      been duly authorized by all necessary corporate action on the part of WTC,
      and the Trustee Documents have been duly executed and delivered by
      WTC.

	(iv)	
      The
      Trust Agreement is a legal, valid and binding obligation of WTC,
      enforceable against WTC, in accordance with its terms.

	(v)	
      No
      approval, authorization or other action by, or filing with, any
      governmental authority or agency under any law or regulation of the State
      of Delaware or the United States of America governing the trust powers of
      WTC is required solely in connection with the execution, delivery and
      performance by WTC of the Trustee Documents, except for the filing of the
      Certificate of Trust with the Secretary of State, which Certificate of
      Trust has been duly filed with the Secretary of State.

	(vi)	
      The
      execution, delivery and performance of the Trustee Documents by WTC are
      not prohibited by (i) the Charter or Bylaws of WTC, (ii) any law or
      regulation of the State of Delaware or the United States of America
      governing the trust powers of WTC, or (iii) to our knowledge (based and
      relying solely on the Officer Certificates), any agreements or instruments
      to which WTC is a party or by which WTC is bound or any judgment or order
      applicable to WTC. 

	(vii)	
      The
      Notes delivered on the date hereof have been authenticated by due
      execution thereof and delivered by WTC, as Note Trustee, in accordance
      with the Company Order. The Preferred Securities delivered on the date
      hereof have been authenticated by due execution thereof and delivered by
      WTC, as Property Trustee, in accordance with the Trust
    Order.

In
rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware and the federal laws of the
United States governing the trust powers of WTC and (B) rely as to
matters of fact, to the extent deemed proper, on certificates of responsible
officers of WTC and public officials.

 

B-5-1

FORM OF
OFFICER’S FINANCIAL CERTIFICATE

The
undersigned, the [Chief Financial Officer/Treasurer/Assistant Treasurer/
Secretary/ Assistant Secretary, Chairman/ViceChairman/Chief Executive
Officer/President/Vice President] hereby certifies, pursuant to Section 6.9 of
the Placement Agreement, dated as of May 31, 2005, that, as of [date], HTT had
the following ratios and balances, on a consolidated basis:

As of
[Quarterly/Annual
Financial Date]

	 	 
	
      Senior
      secured indebtedness for borrowed money (“Debt”)
	
      $_____

	 	 
	
      Senior
      unsecured Debt
	
      $_____

	 	 
	
      Subordinated
      Debt
	
      $_____

	 	 
	
      Total
      Debt
	
      $_____

	 	 
	
      Ratio
      of (x) senior secured and unsecured Debt to (y) total Debt
	
      _____%

[FOR
FISCAL YEAR END: Attached hereto are the audited consolidated financial
statements (including the balance sheet, income statement and statement of cash
flows, and notes thereto, together with the report of the independent
accountants thereon) of HHT and its consolidated subsidiaries for the three
years ended [date], 20__.]

[FOR
FISCAL QUARTER END: Attached hereto are the unaudited consolidated and
consolidating financial statements (including the balance sheet and income
statement) of HHT and its consolidated subsidiaries for the fiscal quarter ended
[date], 20__.]

The
financial statements fairly present in all material respects, in accordance with
U.S. generally accepted accounting principles (“GAAP”), the financial position
of HHT and its consolidated subsidiaries, and the results of operations and
changes in financial condition as of the date, and for the [quarter] [annual]
period ended [date], 20__, and such financial statements have been prepared in
accordance with GAAP consistently applied throughout the period involved (expect
as otherwise noted therein).

 

1

IN
WITNESS WHEREOF, the undersigned has executed this Officer’s Financial
Certificate as of this _____ day of _____________, 20__.

	 	
      By:
      
	 	 
	 	
      Name:
	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	
      Hersha
      Hospitality Trust
	 
	 	
      510
      Walnut Street, 9th
      Floor
	 
	 	
      Philadelphia,
      Pennsylvania 19106
	 
	 	
      215-238-1046
	 

 

2<PAGE>

                                                                  EXHIBIT 10.33

                 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

         THIS CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (this "AGREEMENT")
is made and entered into as of August 24, 2004, between VisiJet, Inc., a
corporation organized and existing under the laws of the State of Delaware
("VISIJET, INC."), and Langley Park Investments PLC, a corporation organized
under the laws of England and Wales with its offices at 30 Farringdon Street,
London EC4A 4HJ ("LANGLEY").

         WHEREAS, subject to the terms and conditions set forth in this
Agreement, VisiJet, Inc. desires to issue and sell to Langley and Langley
desires to acquire from VisiJet, Inc. Four Hundred Fifty Thousand (450,000)
shares of VisiJet, Inc.'s Series A 0% Convertible Preferred Stock, $.001 par
value (the "SERIES A PREFERRED Stock"), with a Stated Value of ten dollars ($10)
per share, and an aggregate Stated Value of Four Million Five Hundred Thousand
Dollars ($4,500,000) for an aggregate purchase price of Three Million One
Hundred Fifty Thousand Dollars ($1,350,000).

         IN CONSIDERATION of the mutual covenants contained in this Agreement,
VisiJet, Inc. and Langley agree as follows:

                                    ARTICLE I

                               CERTAIN DEFINITIONS

         1.1 CERTAIN DEFINITIONS. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:

         "AFFILIATE" means, with respect to any Person, any Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "CONTROL" (including,
with correlative meanings, the terms "CONTROLLED BY" and "UNDER COMMON CONTROL
WITH") shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or by contract or otherwise.

         "AGREEMENT" shall have the meaning set forth in the introductory
paragraph of this Agreement.

         "ATTORNEY-IN-FACT" means Gottbetter & Partners, LLP, 488 Madison
Avenue, 12 Floor, New York, NY 10022; Tel: 212-400-6900; Fax: 212-400-6901.

         "BUSINESS DAY" means any day except Saturday, Sunday, any day which
shall be a legal holiday or a day on which banking institutions in the State of
New York are authorized or required by law or other government actions to close.

         "CERTIFICATE OF DESIGNATION" means the Certificate of Designation of
the Series A Preferred Stock annexed as EXHIBIT A hereto.

<PAGE>

         "CHANGE OF CONTROL" means the acquisition, directly or indirectly, by
any Person of ownership of, or the power to direct the exercise of voting power
with respect to, a majority of the issued and outstanding voting shares of
VisiJet, Inc.

         "CLOSING" shall have the meaning set forth in SECTION 2.2(A) hereof.

         "CLOSING DATE" shall have the meaning set forth in SECTION 2.2(A)
hereof.

         "COMMON STOCK" means shares now or hereafter authorized of the class of
common stock $.001 par value of VisiJet, Inc.

         "CONSIDERATION STOCK" shall have the meaning set forth in SECTION
2.1(A) hereof.

         "CONTROL PERSON" shall have the meaning set forth in SECTION 4.8(A)
hereof.

         "CONVERSION DATE" shall have the meaning set forth in the Certificate
of Designation.

         "CONVERSION PRICE" shall have the meaning set forth in the Certificate
of Designation.

         "DEFAULT" means any event or condition which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.

         "DISCLOSURE DOCUMENTS" means VisiJet, Inc.'s reports filed under the
Exchange Act with the SEC.

         "ESCROW AGREEMENT" means the Escrow Agreement in the form of EXHIBIT D
attached hereto.

         "EVENT OF DEFAULT" shall have the meaning set forth in SECTION 5.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

         "EXECUTION DATE" means the date of this Agreement first written above.

         "INDEMNIFIED PARTY" shall have the meaning set forth in SECTION 4.8(B)
hereof.

         "INDEMNIFYING PARTY" shall have the meaning set forth in SECTION 4.8(B)
hereof.

         "G&P" means Gottbetter & Partners, LLP.

         "LANGLEY" shall have the meaning in the introductory paragraph.

         "LANGLEY CONSIDERATION SHARES" shall have the meaning in SECTION 2.1(C)
hereof.

                                       2

<PAGE>

         "LANGLEY SHARES" shall mean ordinary shares of 1.0p each in Langley.

         "LIMITATION ON CONVERSION" shall have the meaning set forth in SECTION
4.12 hereof.

         "LOSSES" shall have the meaning set forth in SECTION 4.8(A) hereof.

         "MATERIAL" shall mean having a financial consequence in excess of
$25,000.

         "MATERIAL ADVERSE EFFECT" shall have the meaning set forth in SECTION
3.1(A).

         "NASD" means the National Association of Securities Dealers, Inc.

         "NASDAQ" shall mean the Nasdaq Stock Market, Inc.(R)

         "ORIGINAL ISSUE DATE" shall have the meaning set forth in the
Certificate of Designation.

         "OTCBB" shall mean the NASD over-the counter Bulletin Board(R).

         "PER SHARE MARKET VALUE" of the Common Stock means on any particular
date (a) the last sale price of shares of Common Stock on such date or, if no
such sale takes place on such date, the last sale price on the most recent prior
date, in each case as officially reported on the principal national securities
exchange on which the Common Stock is then listed or admitted to trading, or (b)
if the Common Stock is not then listed or admitted to trading on any national
securities exchange, the closing bid price per share as reported by Nasdaq, or
(c) if the Common Stock is not then listed or admitted to trading on the Nasdaq,
the closing bid price per share of the Common Stock on such date as reported on
the OTCBB or if there is no such price on such date, then the last bid price on
the date nearest preceding such date, or (d) if the Common Stock is not quoted
on the OTCBB, the closing bid price for a share of Common Stock on such date in
the over-the-counter market as reported by the Pinksheets LLC (or similar
organization or agency succeeding to its functions of reporting prices) or if
there is no such price on such date, then the last bid price on the date nearest
preceding such date, or (e) if the Common Stock is no longer publicly traded,
the fair market value of a share of the Common Stock as determined by an
Appraiser (as defined in the Certificate of Designation) selected in good faith
by the holders of a majority of the Series A Preferred Stock; PROVIDED, HOWEVER,
that VisiJet, Inc., after receipt of the determination by such Appraiser, shall
have the right to select an additional Appraiser, in which case, the fair market
value shall be equal to the average of the determinations by each such
Appraiser.

         "PERSON" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.

         "POWER OF ATTORNEY" means the power of attorney in the form of EXHIBIT
B annexed hereto.

                                       3

<PAGE>

         "PROCEEDING" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

         "REDEMPTION PRICE" shall mean an amount equal to the Stated Value of
the shares of Consideration Stock outstanding that are subject to redemption.

         "REPORTING ISSUER" means a company that is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act.

         "REQUIRED APPROVALS" shall have the meaning set forth in SECTION
3.1(F).

         "SECURITIES" means the Series A Preferred Stock, the Common Stock and
the Underlying Shares and stock of any other class into which such shares may
hereafter have been reclassified or changed.

         "SEC" means the Securities and Exchange Commission.

         "SECURITIES ACT" means the Securities Act of 1933, as amended.

         "STATED VALUE" means the sum of ten dollars ($10) per share of
Consideration Stock or Three Million One Hundred Fifty Thousand Dollars
($3,150,000) for all of the shares of Consideration Stock.

         "SERIES A PREFERRED STOCK" shall have the meaning set forth in the
recital.

         "SUBSIDIARIES" shall have the meaning set forth in SECTION 3.1(A).

         "VISIJET, INC." shall have the meaning set forth in the introductory
paragraph.

         "TOTAL PURCHASE PRICE" shall have the meaning set forth in SECTION
2.1(B) hereof.

         "TRADING DAY" means (a) a day on which the Common Stock is quoted on
Nasdaq, the OTCBB or the principal stock exchange on which the Common Stock has
been listed, or (b) if the Common Stock is not quoted on Nasdaq, the OTCBB or
any stock exchange, a day on which the Common Stock is quoted in the
over-the-counter market, as reported by the Pinksheets LLC (or any similar
organization or agency succeeding its functions of reporting prices).

         "TRANSACTION DOCUMENTS" means this Agreement and all exhibits and
schedules hereto and all other documents, instruments and writings required
pursuant to this Agreement.

         "UNDERLYING SHARES" means the shares of VisiJet, Inc.'s Common Stock
into which the shares of Consideration Stock are convertible as provided in the
Certificate of Designation.

         "U.S." means the United States.

                                       4

<PAGE>

                                   ARTICLE II

                PURCHASE AND SALE OF CONVERTIBLE PREFERRED SHARES

         2.1 PURCHASE AND SALE; PURCHASE PRICE.

                  (a) Subject to the terms and conditions set forth herein,
VisiJet, Inc. shall issue and sell and Langley shall purchase Four Hundred Fifty
Thousand (450,000) shares of VisiJet, Inc.'s Series A 0% Convertible Preferred
Stock, $.001 par value per share (the "CONSIDERATION STOCK"). The Series A
Preferred Stock shall have the respective rights, preferences and privileges as
set forth in the Certificate of Designation to be filed by VisiJet, Inc. with
the Secretary of State of Delaware prior to the Closing Date.

                  (b) The purchase price for each share of Series A Preferred
Stock shall be Ten Dollars ($10) (the "PER SHARE CONSIDERATION"). The Per Share
Consideration multiplied by the number of shares of Series A Preferred Stock to
be purchased by Langley is referred to as the "TOTAL PURCHASE PRICE."

                  (c) The Total Purchase Price shall be paid by delivery to
VisiJet, Inc. of the number of Langley Shares (the "LANGLEY CONSIDERATION
SHARES") equal to the Total Purchase Price divided by the conversion rate of the
British Pound Sterling to purchase US Dollars as determined below on July 30,
2004. The Langley Shares shall have a value of (pound)1 per share. The number of
Langley Shares to be issued will be based on the conversion rate of the British
Pound Sterling to the US Dollar in effect as of the close of business on the day
preceding the closing of the transaction, as quoted by Coutts & Co. as the
commercial rate it gives to purchase US Dollars. For example, if the effective
conversion rate is $1.80/(pound) 1 and the Total Purchase Price is $5,000,000,
then the number of Langley Shares VisiJet, Inc. will receive shall equal the
$5,000,000/$1.80, or 2,777,777 Langley Shares.

         2.2 EXECUTION AND DELIVERY OF DOCUMENTS; THE CLOSING.

                  (a) The Closing of the purchase and sale of the shares of
Consideration Stock (the "Closing") shall take place within sixty (60) days from
the date hereof (the "CLOSING DATE"). On the Closing Date,

                  (i) VisiJet, Inc. shall execute and deliver to Langley the
certificates representing the shares of Consideration Stock, which shares of
Consideration Stock shall have the respective rights, preferences and privileges
as set forth in the Certificate of Designation annexed as EXHIBIT A hereto;

                  (ii) VisiJet, Inc. shall execute and deliver the Power of
Attorney annexed as EXHIBIT B hereto, provided that VisiJet, Inc. may execute
the Power of Attorney upon the execution of this Agreement, in which case it
will be held in escrow by G&P and delivered at Closing;

                  (iii) VisiJet, Inc. shall execute and deliver to Langley a
certificate of its President, in the form of EXHIBIT C annexed hereto,
certifying that attached thereto is a copy of resolutions duly adopted by the

                                       5

<PAGE>

Board of Directors of VisiJet, Inc. authorizing VisiJet, Inc. to execute and
deliver the Transaction Documents and to enter into the transactions
contemplated thereby, provided that VisiJet, Inc. may execute such certificate
upon the execution of this Agreement, in which case it will be held in escrow by
G&P and delivered at Closing;

                  (iv) Langley shall execute and deliver a certificate in the
name of VisiJet, Inc. or a provisional letter of allotment for a trading account
in the name of VisiJet, Inc. representing the Langley Consideration Shares;

                  (v) VisiJet, Inc., Langley and the Escrow Agent shall execute
and deliver to each other an executed Escrow Agreement in the form annexed
hereto as EXHIBIT D, provided that VisiJet, Inc., Langley and Escrow Agent may
execute the Escrow Agreement upon the execution of this Agreement, in which case
it will be held in escrow by the Escrow Agent and delivered at Closing

                  (vi) VisiJet, Inc. shall wire the monies owed to G&P pursuant
to SECTION 5.1 hereof for legal fees with the following wire instructions:

                                    Citibank, N.A.
                                    488 Madison Avenue
                                    New York, NY
                                    ABA Routing No.: 021000089
                                    Account Name: Gottbetter & Partners, LLP
                                    Account No. 49061322
                                    Reference:  [Target Company]

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         3.1 REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF VISIJET, INC..
VisiJet, Inc. hereby makes the following representations and warranties to
Langley, all of which shall survive the Closing:

                  (a) ORGANIZATION AND QUALIFICATION. VisiJet, Inc. is a
corporation, duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its formation, with the requisite corporate power
and authority to own and use its properties and assets and to carry on its
business as currently conducted. VisiJet, Inc. has no subsidiaries other than as
set forth on SCHEDULE 3.1(A) attached hereto (collectively, the "SUBSIDIARIES").
Each of the Subsidiaries is a corporation, duly incorporated, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
with the full corporate power and authority to own and use its properties and
assets and to carry on its business as currently conducted. Each of VisiJet,
Inc. and the Subsidiaries is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as

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the case may be, would not, individually or in the aggregate, have a material
adverse effect on the results of operations, assets, prospects, or financial
condition of VisiJet, Inc. and the Subsidiaries, taken as a whole (a "MATERIAL
ADVERSE Effect").

                  (b) AUTHORIZATION, ENFORCEMENT. VisiJet, Inc. has the
requisite corporate power and authority to enter into and to consummate the
transactions contemplated hereby and by each other Transaction Document and to
otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of this Agreement and each of the other Transaction Documents by
VisiJet, Inc. and the consummation by it of the transactions contemplated hereby
and thereby has been duly authorized by all necessary action on the part of
VisiJet, Inc.. Each of this Agreement and each of the other Transaction
Documents has been or will be duly executed by VisiJet, Inc. and when delivered
in accordance with the terms hereof or thereof will constitute the valid and
binding obligation of VisiJet, Inc. enforceable against VisiJet, Inc. in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors'
rights and remedies or by other equitable principles of general application.

                  (c) CAPITALIZATION. The authorized, issued and outstanding
capital stock of the Company is set forth on SCHEDULE 3.1(C). No shares of the
Series A Preferred Stock have been issued as of the date hereof. No shares of
Common Stock are entitled to preemptive or similar rights, nor is any holder of
the Common Stock entitled to preemptive or similar rights arising out of any
agreement or understanding with VisiJet, Inc. by virtue of this Agreement.
Except as disclosed in SCHEDULE 3.1(C), there are no outstanding options,
warrants, script, rights to subscribe to, registration rights, calls or
commitments of any character whatsoever relating to, or, except as a result of
the purchase and sale of the Series A Preferred Stock hereunder, securities,
rights or obligations convertible into or exchangeable for, or giving any Person
any right to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings, or arrangements by which VisiJet, Inc. or any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common Stock.
Neither VisiJet, Inc. nor any Subsidiary is in violation of any of the
provisions of its Certificate of Incorporation, bylaws or other charter
documents.

                  (d) ISSUANCE OF SECURITIES. The shares of Consideration Stock
have been duly and validly authorized for issuance, offer and sale pursuant to
this Agreement and, when issued and delivered as provided hereunder against
payment in accordance with the terms hereof, shall be valid and binding
obligations of VisiJet, Inc. enforceable in accordance with their respective
terms. VisiJet, Inc. has and at all times while the shares of Consideration
Stock are outstanding will continue to maintain an adequate reserve of shares of
Common Stock to enable it to perform its obligations under this Agreement and
the Certificate of Designation. When issued in accordance with the terms hereof,
the Underlying Shares will be duly authorized, validly issued, fully paid and
non-assessable.

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                  (e) NO CONFLICTS. The execution, delivery and performance of
this Agreement and the other Transaction Documents by VisiJet, Inc. and the
consummation by VisiJet, Inc. of the transactions contemplated hereby and
thereby do not and will not (i) conflict with or violate any provision of its
Certificate of Incorporation or bylaws (each as amended through the date hereof)
or (ii) be subject to obtaining any consents except those referred to in Section
3.1(f), conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which VisiJet, Inc. is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which
VisiJet, Inc. or its Subsidiaries is subject (including, but not limited to,
those of other countries and the federal and state securities laws and
regulations), or by which any property or asset of VisiJet, Inc. or its
Subsidiaries is bound or affected, except in the case of clause (ii), such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect. The business of VisiJet, Inc. and its Subsidiaries is not being
conducted in violation of any law, ordinance or regulation of any governmental
authority.

                  (f) CONSENTS AND APPROVALS. Except as specifically set forth
in SCHEDULE 3.1(F), neither VisiJet, Inc. nor any Subsidiary is required to
obtain any consent, waiver, authorization or order of, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by VisiJet, Inc. of this Agreement and each of the
other Transaction Documents except for the filing of the Certificate of
Designation with respect to the Series A Preferred Stock with the Secretary of
State of the State of Delaware, which filing shall be effected prior to the
Closing Date (together with the consents, waivers, authorizations, orders,
notices and filings referred to in SCHEDULE 3.1(F), the "REQUIRED APPROVALS").

                  (g) LITIGATION; PROCEEDINGS. Except as specifically disclosed
in SCHEDULE 3.1(G), there is no action, suit, notice of violation, proceeding or
investigation pending or, to the best knowledge of VisiJet, Inc., threatened
against or affecting VisiJet, Inc. or any of its Subsidiaries or any of their
respective properties before or by any court, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign) which
(i) relates to or challenges the legality, validity or enforceability of any of
the Transaction Documents, the Underlying Shares or the shares of Consideration
Stock, (ii) could, individually or in the aggregate, have a Material Adverse
Effect or (iii) could, individually or in the aggregate, materially impair the
ability of VisiJet, Inc. to perform fully on a timely basis its obligations
under the Transaction Documents.

                  (h) NO DEFAULT OR VIOLATION. Except as set forth in SCHEDULE
3.1(H) hereto, neither VisiJet, Inc. nor any Subsidiary (i) is in default under
or in violation of any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound, except such conflicts or defaults as do not have a Material
Adverse Effect, (ii) is in violation of any order of any court, arbitrator or

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governmental body, except for such violations as do not have a Material Adverse
Effect, or (iii) is in violation of any statute, rule or regulation of any
governmental authority which could (individually or in the aggregate) (a)
adversely affect the legality, validity or enforceability of this Agreement, (b)
have a Material Adverse Effect or (c) adversely impair VisiJet, Inc.'s ability
or obligation to perform fully on a timely basis its obligations under this
Agreement.

                  (i) DISCLOSURE DOCUMENTS. The Disclosure Documents are
accurate in all material respects and do not contain any untrue statement of
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.

                  (j) NON-REGISTERED OFFERING. Neither VisiJet, Inc. nor any
Person acting on its behalf has taken or will take any action (including,
without limitation, any offering of any securities of VisiJet, Inc. under
circumstances which would require the integration of such offering with the
offering of the Securities under the Securities Act) which might subject the
offering, issuance or sale of the Securities to the registration requirements of
Section 5 of the Securities Act.

                  (k) PLACING AGENT. VisiJet, Inc. accepts and agrees that
Dungarvon Associates, Inc. ("DUNGARVON") is acting for Langley and does not
regard any Person other than Langley as its customer in relation to this
Agreement, and that it has not made any recommendation to VisiJet, Inc., in
relation to this Agreement and is not advising VisiJet, Inc., with regard to the
suitability or merits of the Langley Shares and in particular Dungarvon has no
duties or responsibilities to VisiJet, Inc. for the best execution of the
transaction contemplated by this Agreement.

                  (l) PRIVATE PLACEMENT REPRESENTATIONS. VisiJet, Inc. (i) has
received and carefully reviewed such information and documentation relating to
Langley that VisiJet, Inc. has requested, including, without limitation,
Langley's Confidential Private Offering Memorandum dated June 17, 2004; (ii) has
had a reasonable opportunity to ask questions of and receive answers from
Langley concerning the Langley Shares, and all such questions, if any, have been
answered to the full satisfaction of VisiJet, Inc.; (iii) has such knowledge and
expertise in financial and business matters that it is capable of evaluating the
merits and risks involved in an investment in the Langley Shares; (iii)
understands that Langley has determined that the exemption from the registration
provisions of the Securities Act of 1933, as amended (the "SECURITIES ACT"),
provided by Section 4(2) of the Securities Act is applicable to the offer and
sale of the Langley Shares, based, in part, upon the representations, warranties
and agreements made by VisiJet, Inc. herein; and (iv) except as provided herein
and in the Private Placement Memorandum, dated June 17, 2004, no representations
or warranties have been made to VisiJet, Inc. by Langley or any agent, employee
or affiliate of Langley and in entering into this transaction VisiJet, Inc. is
not relying upon any information, other than the results of independent

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investigation by VisiJet, Inc. Langley acknowledges and agrees that VisiJet,
Inc. makes no representation or warranty with respect to the transactions
contemplated hereby other than those specifically set forth in SECTION 3.1
hereof.

         3.2 REPRESENTATIONS AND WARRANTIES OF LANGLEY. Langley hereby
represents and warrants to VisiJet, Inc. as follows:

                  (a) ORGANIZATION; AUTHORITY. Langley is a corporation, duly
         organized, validly existing and in good standing under the laws of the
         jurisdiction of its formation with the requisite power and authority to
         enter into and to consummate the transactions contemplated hereby and
         by the other Transaction Documents and otherwise to carry out its
         obligations hereunder and thereunder. The acquisition of the shares of
         Consideration Stock to be purchased by Langley hereunder has been duly
         authorized by all necessary action on the part of Langley. This
         Agreement has been duly executed and delivered by Langley and
         constitutes the valid and legally binding obligation of Langley,
         enforceable against it in accordance with its terms, except as such
         enforceability may be limited by applicable bankruptcy, insolvency,
         reorganization, moratorium or similar laws relating to, or affecting
         generally the enforcement of, creditors rights and remedies or by other
         general principles of equity.

                  (b) ISSUANCE OF LANGLEY CONSIDERATION SHARES. The Langley
         Consideration Shares have been duly and validly authorized for
         issuance, offer and sale pursuant to this Agreement and, when issued
         and delivered as provided hereunder against payment in accordance with
         the terms hereof, shall be valid and binding obligations of Langley
         enforceable in accordance with their terms.

                  (c) INVESTMENT INTENT. Langley is acquiring the shares of
         Consideration Stock to be purchased by it hereunder, and will acquire
         the Underlying Shares relating to such shares of Consideration Stock
         for its own account for investment purposes only and not with a view to
         or for distributing or reselling such shares of Consideration Stock, or
         Underlying Shares or any part thereof or interest therein, without
         prejudice, however, to Langley's right, subject to the provisions of
         this Agreement, at all times to sell or otherwise dispose of all or any
         part of such shares of Consideration Stock in compliance with
         applicable federal and state securities laws.

                  (d) EXPERIENCE OF LANGLEY. Langley, either alone or together
         with its representatives, has such knowledge, sophistication and
         experience in business and financial matters so as to be capable of
         evaluating the merits and risks of an investment in the shares of
         Consideration Stock to be acquired by it hereunder, and has so
         evaluated the merits and risks of such investment.

                  (e) ABILITY OF LANGLEY TO BEAR RISK OF INVESTMENT. Langley is
         able to bear the economic risk of an investment in the Securities to be
         acquired by it hereunder and, at the present time, is able to afford a
         complete loss of such investment.

                  (f) ACCESS TO INFORMATION. Langley acknowledges that it has
         been afforded (i) the opportunity to ask such questions as it has
         deemed necessary of, and to receive answers from, representatives of
         VisiJet, Inc. concerning the terms and conditions of the Securities

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<PAGE>

         offered hereunder and the merits and risks of investing in such
         securities; (ii) access to information about VisiJet, Inc. and VisiJet,
         Inc.'s financial condition, results of operations, business,
         properties, management and prospects sufficient to enable it to
         evaluate its investment in the Securities; and (iii) the opportunity to
         obtain such additional information which VisiJet, Inc. possesses or can
         acquire without unreasonable effort or expense that is necessary to
         make an informed investment decision with respect to the investment and
         to verify the accuracy and completeness of the information that it has
         received about VisiJet, Inc..

                  (g) RELIANCE. Langley understands and acknowledges that (i)
         the shares of Consideration Stock and the Underlying Shares being
         offered and sold to it hereunder are being offered and sold without
         registration under the Securities Act in a private placement that is
         exempt from the registration provisions of the Securities Act under
         Section 4(2) of the Securities Act and (ii) the availability of such
         exemption depends in part on, and that VisiJet, Inc. will rely upon the
         accuracy and truthfulness of, the foregoing representations and Langley
         hereby consents to such reliance.

                  (h) REGULATION S. Langley understand and acknowledge that (A)
         the shares of Consideration Stock have not been registered under the
         Securities Act, are being sold in reliance upon an exemption from
         registration afforded by Regulation S; and that such shares of
         Consideration Stock have not been registered with any state securities
         commission or authority; (B) pursuant to the requirements of Regulation
         S, the shares of Consideration Stock may not be transferred, sold or
         otherwise exchanged unless in compliance with the provisions of
         Regulation S and/or pursuant to registration under the Securities Act,
         or pursuant to an available exemption hereunder; and (C) Langley is
         under no obligation to register the shares of Consideration Stock under
         the Securities Act or any state securities law, or to take any action
         to make any exemption from any such registration provisions available.

         Langley is not a U.S. person and is not acquiring the shares of
Consideration Stock for the account of any U.S. person; (B) no director or
executive officer of Langley is a national or citizen of the United States; and
(C) it is not otherwise deemed to be a "U.S. Person" within the meaning of
Regulation S.

         Langley was not formed specifically for the purpose of acquiring the
shares of Consideration Stock purchased pursuant to this Agreement.

         Langley is purchasing the shares of Consideration Stock for its own
account and risk and not for the account or benefit of a U.S. Person as defined
in Regulation S and no other person has any interest in or participation in the
shares of Consideration Stock or any right, option, security interest, pledge or
other interest in or to the shares of Consideration Stock. Langley understands,
acknowledges and agrees that it must bear the economic risk of its investment in
the shares of Consideration Stock for an indefinite period of time and that
prior to any such offer or sale, VisiJet, Inc. may require, as a condition to
effecting a transfer of the shares of Consideration Stock, an opinion of
counsel, acceptable to VisiJet, Inc., as to the registration or exemption
therefrom under the Securities Act and any state securities acts, if applicable.

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<PAGE>

         Langley will, after the expiration of the Restricted Period, as set
forth under Regulation S Rule 903(b)(3)(iii)(A), offer, sell, pledge or
otherwise transfer the shares of Consideration Stock only in accordance with
Regulation S, or pursuant to an available exemption under the Securities Act
and, in any case, in accordance with applicable state securities laws. The
transactions contemplated by this Agreement have neither been pre-arranged with
a purchaser who is in the U.S. or who is a U.S. Person, nor are they part of a
plan or scheme to evade the registration provisions of the United States federal
securities laws.

         The offer leading to the sale evidenced hereby was made in an "offshore
transaction." For purposes of Regulation S, Langley understands that an
"offshore transaction" as defined under Regulation S is any offer or sale not
made to a person in the United States and either (A) at the time the buy order
is originated, the purchaser is outside the United States, or the seller or any
person acting on his behalf reasonably believes that the purchaser is outside
the United States; or (B) for purposes of (1) Rule 903 of Regulation S, the
transaction is executed in, or on or through a physical trading floor of an
established foreign exchange that is located outside the United States or (2)
Rule 904 of Regulation S, the transaction is executed in, on or through the
facilities of a designated offshore securities market, and neither the seller
nor any person acting on its behalf knows that the transaction has been
prearranged with a buyer in the U.S.

         Neither Langley nor any affiliate or any person acting on Langley's
behalf, has made or is aware of any "directed selling efforts" in the United
States, which is defined in Regulation S to be any activity undertaken for the
purpose of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for any of the shares of
Consideration Stock being purchased hereby.

         Langley understands that VisiJet, Inc. is the seller of the shares of
Consideration Stock which are the subject of this Agreement, and that, for
purpose of Regulation S, a "distributor" is any underwriter, dealer or other
person who participates, pursuant to a contractual arrangement, in the
distribution of securities offered or sold in reliance on Regulation S and that
an "affiliate" is any partner, officer, director or any person directly or
indirectly controlling, controlled by or under common control with any person in
question. Langley agrees that Langley will not, during the Restricted Period set
forth under Rule 903(b)(iii)(A), act as a distributor, either directly or though
any affiliate, nor shall it sell, transfer, hypothecate or otherwise convey the
shares of Consideration Stock other than to a non-U.S. Person.

         Langley acknowledges that the shares of Consideration Stock will bear a
legend in substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN OFFERED AND SOLD IN AN
"OFFSHORE TRANSACTION" IN RELIANCE UPON REGULATION S AS PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION. ACCORDINGLY, THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT") AND MAY NOT BE TRANSFERRED OTHER THAN IN ACCORDANCE WITH
REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO

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AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE THE SUBJECT OF HEDGING
TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE
SECURITIES ACT.

VisiJet, Inc. acknowledges and agrees that Langley makes no representations or
warranties with respect to the transactions contemplated hereby other than those
specifically set forth in this SECTION 3.2.

                                   ARTICLE IV

                         OTHER AGREEMENTS OF THE PARTIES

         4.1 MANNER OF OFFERING. The Consideration Stock is being issued
pursuant to section 4(2) of the Securities Act and Regulation S thereunder. The
Langley Consideration Shares are being issued pursuant to section 4(2) of the
Securities Act.

         4.2 NOTICE OF CERTAIN EVENTS. VisiJet, Inc. shall, on a continuing
basis, (i) advise Langley promptly after obtaining knowledge of, and, if
requested by Langley, confirm such advice in writing, of (A) the issuance by any
state securities commission of any stop order suspending the qualification or
exemption from qualification of the shares of Consideration Stock, for offering
or sale in any jurisdiction, or the initiation of any proceeding for such
purpose by any state securities commission or other regulatory authority, or (B)
any event that makes any statement of a material fact made by VisiJet, Inc. in
SECTION 3.1 or in the Disclosure Documents untrue or that requires the making of
any additions to or changes in SECTION 3.1 or in the Disclosure Documents in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading, (ii) use its best efforts to prevent the
issuance of any stop order or order suspending the qualification or exemption
from qualification of the Securities under any state securities or Blue Sky
laws, and (iii) if at any time any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Securities under any such laws, and use its
best efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.

         4.3 BLUE SKY LAWS. VisiJet, Inc. agrees that it will execute all
necessary documents and pay all necessary state filing or notice fees to enable
VisiJet, Inc. to sell the Securities to Langley.

         4.4 INTEGRATION. VisiJet, Inc. shall not and shall use its best efforts
to ensure that no Affiliate shall sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in Section 2 of
the Securities Act) that would be integrated with the offer or sale of the
Securities in a manner that would require the registration under the Securities
Act of the sale of the Securities to Langley.

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         4.5 FURNISHING OF RULE 144(C) MATERIALS. VisiJet, Inc. shall, for so
long as any of the Securities remain outstanding and during any period in which
VisiJet, Inc. is not subject to Section 13 or 15(d) of the Exchange Act, make
available to any registered holder of the Securities ("HOLDER" or "HOLDERS") in
connection with any sale thereof and any prospective purchaser of such
Securities from such Person, such information in accordance with Rule 144(c)
promulgated under the Securities Act as is required to sell the Securities under
Rule 144 promulgated under the Securities Act.

         4.6 SOLICITATION MATERIALS. VisiJet, Inc. shall not (i) distribute any
offering materials in connection with the offering and sale of the shares of
Consideration Stock and the Underlying Shares other than the Disclosure
Documents and any amendments and supplements thereto prepared in compliance
herewith or (ii) solicit any offer to buy or sell the shares of Consideration
Stock by means of any form of general solicitation or advertising.

         4.7 LISTING OF COMMON STOCK. If the Common Stock is or shall become
listed on the OTCBB or on another exchange, VisiJet, Inc. shall (a) use its best
efforts to maintain the listing of its Common Stock on the OTCBB or such other
exchange on which the Common Stock is then listed until two years from the date
hereof, and (b) shall provide to Langley evidence of such listing.

         4.8 INDEMNIFICATION.

                  (a) INDEMNIFICATION.

                  (i) VisiJet, Inc. shall, notwithstanding termination of this
Agreement and for a period of six (6) years, indemnify and hold harmless Langley
and its officers, directors, agents, employees and affiliates, each Person who
controls or Langley (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) (each such Person, a "CONTROL PERSON") and the
officers, directors, agents, employees and affiliates of each such Control
Person, to the fullest extent permitted by applicable law, from and against any
and all losses, claims, damages, liabilities, costs (including, without
limitation, costs of preparation and attorneys' fees) and expenses
(collectively, "LOSSES"), as incurred, arising out of, or relating to, a breach
or breaches of any representation, warranty, covenant or agreement by VisiJet,
Inc. under this Agreement or any other Transaction Document.

                  (ii) Langley shall, notwithstanding termination of this
Agreement and for a period of six (6) years, indemnify and hold harmless
VisiJet, Inc., its officers, directors, agents and employees, each Control
Person and the officers, directors, agents and employees of each Control Person,
to the fullest extent permitted by applicable law, from and against any and all
Losses, as incurred, arising out of, or relating to, a breach or breaches of any
representation, warranty, covenant or agreement by Langley under this Agreement
or the other Transaction Documents, except for Losses solely arising out of
negligence, bad faith or breach of this Agreement by VisiJet, Inc..

                  (iii) VisiJet, Inc. and Langley acknowledge that in the SEC's
opinion, directors, officers and persons controlling a company subject to the
Securities Act can not be indemnified for liabilities arising under the
Securities Act by such company.

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<PAGE>

                  (b) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity hereunder
(an "INDEMNIFIED PARTY"), such Indemnified Party promptly shall notify the
Person from whom indemnity is sought (the "INDEMNIFYING PARTY") in writing, and
the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant to
this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have proximately
and materially adversely prejudiced the Indemnifying Party.

                  An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed to
pay such fees and expenses; or (2) the Indemnifying Party shall have failed
promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3)
the named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party
and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense of the claim against the Indemnified Party but will
retain the right to control the overall Proceedings out of which the claim arose
and such counsel employed by the Indemnified Party shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.

                  All fees and expenses of the Indemnified Party to which the
Indemnified Party is entitled hereunder (including reasonable fees and expenses
to the extent incurred in connection with investigating or preparing to defend
such Proceeding in a manner not inconsistent with this Section) shall be paid to
the Indemnified Party, as incurred, within ten (10) Business Days of written
notice thereof to the Indemnifying Party.

                  No right of indemnification under this Section shall be
available as to a particular Indemnified Party if the Indemnifying Party obtains
a non-appealable final judicial determination that such Losses arise solely out
of the negligence or bad faith of such Indemnified Party in performing the
obligations of such Indemnified Party under this Agreement or a breach by such
Indemnified Party of its obligations under this Agreement.

                  (c) CONTRIBUTION. If a claim for indemnification under this
Section is unavailable to an Indemnified Party or is insufficient to hold such
Indemnified Party harmless for any Losses in respect of which this Section would

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apply by its terms (other than by reason of exceptions provided in this
Section), then each Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such Losses in such proportion as is appropriate to reflect the
relative benefits received by the Indemnifying Party on the one hand and the
Indemnified Party on the other and the relative fault of the Indemnifying Party
and Indemnified Party in connection with the actions or omissions that resulted
in such Losses as well as any other relevant equitable considerations. The
relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether there was a judicial
determination that such Losses arise in part out of the negligence or bad faith
of the Indemnified Party in performing the obligations of such Indemnified Party
under this Agreement or the Indemnified Party's breach of its obligations under
this Agreement. The amount paid or payable by a party as a result of any Losses
shall be deemed to include any attorneys' or other fees or expenses incurred by
such party in connection with any Proceeding to the extent such party would have
been indemnified for such fees or expenses if the indemnification provided for
in this Section was available to such party.

                  (d) NON-EXCLUSIVITY. The indemnity and contribution agreements
contained in this Section are in addition to any obligation or liability that
the Indemnifying Parties may have to the Indemnified Parties.

         4.9 ATTORNEY-IN-FACT. For the sole purpose of effectuating the terms
and provisions of this Agreement and the Certificate of Designation, VisiJet,
Inc. hereby agrees to give a power of attorney to G&P as is evidenced by EXHIBIT
B annexed hereto. All acts done under such power of attorney are hereby ratified
and approved and neither the Attorney-in-Fact nor any designee or agent thereof
shall be liable for any acts of commission or omission, for any error of
judgment or for any mistake of fact or law, as long as the Attorney-in-Fact is
operating within the scope of the power of attorney and this Agreement and its
exhibits. The power of attorney, being coupled with an interest, shall be
irrevocable while any of the shares of Consideration Stock remain unconverted,
or any portion of this Agreement remains unsatisfied. In addition, VisiJet, Inc.
shall give the Attorney-in-Fact resolutions executed by the Board of Directors
of VisiJet, Inc. which authorize transfers of the shares of Consideration Stock
and future issuances of the Underlying Shares for the shares of Consideration
Stock, and which resolutions state that they are irrevocable while any of the
shares of Consideration Stock remain unconverted, or any portion of this
Agreement remains unsatisfied.

         4.10 SALE OF LANGLEY CONSIDERATION SHARES. Langley shall assist
VisiJet, Inc. in setting up and maintaining a trading account at a registered
broker in the United Kingdom to facilitate the sale of the Langley Consideration
Shares. Broker's commissions in the trading account shall not exceed one half
percent (0.5%).

         4.11 LOCK UP BY LANGLEY. Langley shall not sell, transfer or assign all
or any of the shares of Consideration Stock or the Underlying Shares for a
period of one (1) year following the Closing, without the written consent of
VisiJet, Inc., which consent may be withheld in VisiJet, Inc.'s sole discretion.

                                       16

<PAGE>

         4.12 LANGLEY'S OWNERSHIP OF COMMON STOCK. In addition to and not in
lieu of the limitations on conversion set forth in the Certificate of
Designation, the conversion and exercise rights of Langley set forth in the
Certificate of Designation shall be limited, solely to the extent required, from
time to time, such that, unless Langley gives written notice seventy five (75)
days in advance to VisiJet, Inc. of Langley's intention to exceed the Limitation
on Conversion as defined herein, with respect to all or a specified amount of
the shares of Consideration Stock and the corresponding number of the Underlying
Shares, in no instance shall the maximum number of shares of Common Stock which
Langley (singularly, together with any Persons who in the determination of
Langley, together with Langley, constitute a group as defined in Rule 13d-5 of
the Exchange Act) may receive in respect of any conversion of the shares of
Consideration Stock, exceed, at any one time, an amount equal to four and ninety
nine one hundredths percent (4.99%) of the then issued and outstanding shares of
Common Stock of VisiJet, Inc. following such conversion (the foregoing being
herein referred to as the "LIMITATION ON Conversion"); PROVIDED, HOWEVER, that
the Limitation on Conversion shall not apply to any forced or automatic
conversion pursuant to this Agreement or the Certificate of Designation; and
PROVIDED, FURTHER that if Langley shall have declared an Event of Default and,
if a cure period is provided, VisiJet, Inc. shall not have properly and fully
cured such Event of Default within any such cure period, the provisions of this
Section 4.12 shall be null and void from and after such date. VisiJet, Inc.
shall, promptly upon its receipt of a Notice of Conversion tendered by Langley
(or its sole designee) for the Consideration Stock, as applicable, notify
Langley by telephone and by facsimile of the number of shares of Common Stock
outstanding on such date and the number of Underlying Shares which would be
issuable to Langley (or its sole designee, as the case may be) if the conversion
requested in such Notice of Conversion or exercise requested in such Notice of
Exercise were effected in full, whereupon, in accordance with the Certificate of
Designation and notwithstanding anything to the contrary set forth therein,
Langley may within one (1) Business Day of its receipt of VisiJet, Inc. notice
required by this Section 4.12 by facsimile revoke such conversion or exercise to
the extent (in whole or in part) that Langley determines that such conversion or
exercise would result in the ownership by Langley of shares of Common Stock in
excess of the Limitation on Conversion.

         4.13 NO VIOLATION OF APPLICABLE LAW. Notwithstanding any provision of
this Agreement to the contrary, if the redemption of the Consideration Stock
otherwise required under this Agreement or the Certificate of Designation would
be prohibited by the relevant provisions of Delaware law, such redemption shall
be effected as soon as it is permitted under such law; PROVIDED, HOWEVER, that
interest payable by VisiJet, Inc. with respect to any such redemption shall
accrue at fifteen percent (15%) per annum.

         4.14 REDEMPTION RESTRICTIONS. Notwithstanding any provision of this
Agreement to the contrary, if any redemption of the shares of Consideration
Stock otherwise required under this Agreement or the Certificate of Designation
would be prohibited in the absence of consent from any lender to VisiJet, Inc.
or any of the Subsidiaries, or by the holders of any class of securities of
VisiJet, Inc., VisiJet, Inc. shall use its best efforts to obtain such consent
as promptly as practicable after any such redemption is required. Interest
payable by VisiJet, Inc. with respect to any such redemption shall accrue at
fifteen percent (15%) per annum until such consent is obtained. Nothing
contained in this Section 4.14 shall be construed as a waiver by Langley of any
rights they may have by virtue of any breach of any representation or warranty
of VisiJet, Inc. herein as to the absence of any requirement to obtain any such
consent.

                                       17

<PAGE>

                                   ARTICLE V

                                  MISCELLANEOUS

         5.1 FEES AND EXPENSES. Except as set forth in this Agreement, each
party shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and performance of this
Agreement. VisiJet, Inc. shall pay all stamp and other taxes and duties levied
in connection with the issuance of the shares of Consideration Stock (and, upon
conversion or exercise thereof, the Underlying Shares) pursuant hereto. Langley
shall be responsible for any taxes payable by Langley that may arise as a result
of the investment hereunder or the transactions contemplated by this Agreement
or any other Transaction Document. VisiJet, Inc. agrees to pay a total Langley's
counsel $7,500 for legal fees associated with the transactions contemplated by
this Agreement at Closing. VisiJet, Inc. shall pay all costs, expenses, fees and
all taxes incident to and in connection with: (A) the issuance and delivery of
the Securities, and the filing of the Certificate of Designation, (B) the
exemption from registration of the Securities for offer and sale to Langley
under the securities or Blue Sky laws of the applicable jurisdictions, and (C)
the preparation of certificates for the Securities (including, without
limitation, printing and engraving thereof), and (D) all fees and expenses of
counsel and accountants of VisiJet, Inc.

         5.2 ENTIRE AGREEMENT This Agreement, together with all of the Exhibits
and Schedules annexed hereto, and any other Transaction Document contains the
entire understanding of the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings, oral or written, with
respect to such matters. This Agreement shall be deemed to have been drafted and
negotiated by both parties hereto and no presumptions as to interpretation,
construction or enforceability shall be made by or against either party in such
regard.

         5.3 NOTICES. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be deemed to have been duly
given upon facsimile transmission (with written transmission confirmation
report) at the number designated below (if delivered on a Business Day during
normal business hours where such notice is to be received), or the first
Business Day following such delivery (if delivered other than on a Business Day
during normal business hours where such notice is to be received) whichever
shall first occur. The addresses for such communications shall be:

                  If to VisiJet, Inc.:

                  With copies to:                VisiJet, Inc.
                                                 192 Technology Drive
                                                 Suite Q
                                                 Irvine, California 92618
                                                 Attn: Laurence  Schreiber
                                                 Tel:  (949) 450-1660 Ext. 29
                                                 Fax:  (949) 453-9652

                                       18

<PAGE>

                  If to Langley:                 Langley Park Investments PLC
                                                 30 Farringdon Street
                                                 London EC4A 4HJ
                                                 Attn: Harry Pearl
                                                 Tel: 44.207.569.0044
                                                 Fax: 44.207.724.0090

                  With copies to:                Gottbetter & Partners, LLP
                                                 488 Madison Avenue, 12th Floor
                                                 New York, NY 10022
                                                 Attn:  Adam S. Gottbetter, Esq.
                                                 Tel:  (212) 400-6900
                                                 Fax:  (212) 400-6901

or such other address as may be designated hereafter by notice given pursuant to
the terms of this Section 5.3.

         5.4 AMENDMENTS; WAIVERS. No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by both VisiJet, Inc. and Langley, or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise
of any such right accruing to it thereafter.

         5.5 HEADINGS. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.

         5.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns. The assignment by a party of this Agreement or any rights
hereunder shall not affect the obligations of such party under this Agreement.

         5.7 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

         5.8 GOVERNING LAW; VENUE; SERVICE OF PROCESS. The parties hereto
acknowledge that the transactions contemplated by this Agreement and the
exhibits hereto bear a reasonable relation to the State of New York. The parties
hereto agree that the internal laws of the State of New York shall govern this
Agreement and the exhibits hereto, including, but not limited to, all issues
related to usury. Any action to enforce the terms of this Agreement or any of
its exhibits, or any other Transaction Document shall be brought exclusively in
the state and/or federal courts situated in the County and State of New York. If
and only if New York declines jurisdiction within the State of New York, such
action shall be brought in the State and County where VisiJet, Inc.'s principal
place of business is situated. Service of process in any action by Langley or

                                       19

<PAGE>

VisiJet, Inc. to enforce the terms of this Agreement may be made by serving a
copy of the summons and complaint, in addition to any other relevant documents,
by commercial overnight courier to the other party at its principal address set
forth in this Agreement.

         5.9 SURVIVAL. The representations and warranties of VisiJet, Inc. and
Langley contained in Article III and the agreements and covenants of the parties
contained in Article IV and this Article V shall survive the Closing.

         5.10 COUNTERPART SIGNATURES. This Agreement may be executed in two or
more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.

         5.11 PUBLICITY. VisiJet, Inc. and Langley shall consult with each other
in issuing any press releases or otherwise making public statements with respect
to the transactions contemplated hereby and neither party shall issue any such
press release or otherwise make any such public statement without the prior
written consent of the other, which consent shall not be unreasonably withheld
or delayed, unless counsel for the disclosing party deems such public statement
to be required by applicable federal and/or state securities laws. Except as
otherwise required by applicable law or regulation, VisiJet, Inc. will not
disclose to any third party (excluding its legal counsel, accountants and
representatives) the name of Langley.

         5.12 SEVERABILITY. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable provision which shall be a reasonable substitute
therefore, and upon so agreeing, shall incorporate such substitute provision in
this Agreement.

         5.13 LIMITATION OF REMEDIES. With respect to claims by VisiJet, Inc. or
any person acting by or through VisiJet, Inc., or by Langley or any person
acting through Langley, for remedies at law or at equity relating to or arising
out of a breach of this Agreement, liability, if any, shall, in no event,
include loss of profits or incidental, indirect, exemplary, punitive, special or
consequential damages of any kind.

                           [ SIGNATURE PAGE FOLLOWS ]

                                       20

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first indicated above.

                                                 Target Company:

                                                 VisiJet, Inc.

                                                 By: /S/ RANDAL A. BAILEY
                                                     ---------------------------
                                                 Name:   Randal A. Bailey
                                                 Title:  President

                                                 Langley:

                                                 Langley Park Investments Plc

                                                 By: /S/ RUFUS PEARL
                                                     ---------------------------
                                                 Name:   Rufus Pearl
                                                 Title:  Administrative Director

                                       21

<PAGE>

                                    EXHIBIT A

                           CERTIFICATE OF DESIGNATION
                          OF THE RIGHTS AND PREFERENCES
                                       OF
                     SERIES A 0% CONVERTIBLE PREFERRED STOCK
                                       OF
                                  VISIJET, INC.

         VisiJet, Inc., a corporation organized and existing under the laws of
the State of Delaware (the "Company"), hereby certifies that the following
resolutions were adopted by the Board of Directors of the Company pursuant to
the authority of the Board of Directors as required by Section 151 of the
Delaware General Corporation Law (the "DGCL").

         RESOLVED, that pursuant to the authority granted. to and vested in the
Board of Directors of said Company (the "Board of Directors" or the "Board"} in
accordance with the provisions of its Articles of Incorporation and Bylaws, each
as amended through the date hereof, the Board of Directors hereby authorizes a
series of the Company's previously authorized Preferred Stock, no par value (the
"Preferred Stock"), and hereby states the designation and number of shares, and
fixes the relative rights, preferences, privileges, powers and restrictions
thereof as follows:

                             I. CERTAIN DEFINITIONS

         For purposes of this Certificate of Designation, capitalized terms are
defined in this Certificate of Designation or shall have the following meanings:

         "BUSINESS DAY" means any day except Saturday, Sunday, and any day which
shall be a legal holiday or a day on which banking institutions in the State of
New York are authorized or required by law or other government actions to close.

         "COMMON STOCK" means the common stock of the Company, par value .001
per share.

         "CONVERSION PERIOD" means the three (3) year period commencing on the
Issuance Date.

         "FIXED CONVERSION PRICE" means the average of the Par Share Market
Value of the Common Stock during the ten (10) Trading Days immediately preceding
July 20, 2004.

         "HOLDER" or "HOLDERS" means a holder or holders of the shares of Series
A Preferred Stock as they appear on the stock records of the Company.

         "ISSUANCE DATE" means the date of the Closing under the Purchase
Agreement with respect to the initial issuance of the Series A Preferred Stock.

                                       22

<PAGE>

         "PER SHARE MARKET VALUE" means on any particular date (a) the closing
bid price per share of the Common Stock on such date on the Over-The-Counter
Bulleting Board, the OTC Bulletin Board(R) ("OTCBB") or other stock exchange on
which the Common Stock has been listed or if there is no such price on such
date, then the last bid price on such exchange on the date nearest preceding
such date, or (b) if the Common Stock is not listed on OTCBB or any stock
exchange, the closing bid price for a share of Common Stock in the
over-the-counter market, as reported by the NASD, at the close of business on
such date, or (c) if the Common Stock is not quoted by the NASD, the closing bid
price for a share of Common Stock in the over-the-counter market as reported by
the Pinksheets LLC (or similar organization or agency succeeding to its
functions of reporting prices), or (d) if the Common Stock is no longer publicly
traded the fair market value of the share of Common Stock as determined by an
Appraiser (as defined in Section IV(c)(iv)) selected in good faith by the
Holders of a majority of the outstanding Series A Preferred Stock; provided,
however, that the Company, after receipt of the determination by such Appraiser,
shall have the right to select an additional Appraiser, in which case, the fair
market value shall be equal to the average of the determinations by each such
Appraiser, in each case as reported by Bloomberg Financial Markets, or if not
available, a comparable reporting service chosen by the Company reasonably
acceptable to the Holder of majority of the outstanding shares of Series A
Preferred Stock.

         "PERSON" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock. company, government (or an agency or political subdivision
thereof) or other entity of any kind.

         "PURCHASE AGREEMENT" means the Convertible Preferred Stock Purchase
Agreement dated August 24 2004, by and between the Company and Langley Park
Investments PLC (the "Purchaser").

         "TRADING DAY" means (a) a day on which the Common Stock is quoted on
the OTCBB or principal stork exchange on which the Common Stock has been listed,
or {b) if the Common Stock is not quoted on the OTCBB or any stock exchange, a
day on which the Common Stock is quoted in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc. ("NASD"), or
(c) if the Common Stock is not quoted on the NASD, a day on which the Common
Stock is quoted in the over-the-counter market as reported by the Pinksheets LLC
(or any similar organization or agency succeeding its functions of reporting
prices).

                           II. DESIGNATION AND AMOUNT

         The designation of this series, which consists of. Four Hundred and
Fifty Thousand 450,000 shares of Preferred Stock, is the Series A 0% Convertible
Preferred Stock (the "Series A Preferred Stock") and the Stated Value shall be
U.S. ten dollars ($10.00) per share (the "Stated Value").

                                 III. DIVIDENDS

         The holder of the shares of Series A Preferred Stock as they appear on
the stock records of the Company ("Holder" or "Holders") shall not be entitled
to receive any dividends.

                                       23

<PAGE>

                                 IV. CONVERSION

         (a) The outstanding shares of Series A Preferred Stock shall be
convertible into shares of Common Stock as is determined by dividing the Stated
Value by the Conversion Price as defined below, at the option of the Holder in
whole or in part, at any time commencing on the Issuance Date and through the
expiration of the Conversion Period. Any conversion under this Section IV (a)
shall be for a minimum Stated Value of $10,000.00 of Series A Preferred Stock.
The Holder shall effect conversions by sending the form of conversion notice
attached hereto as Appendix I (the "Notice of Conversion") in the manner set
forth in Section IV (J). Each Notice of Conversion shall specify the Stated
Value of Series A Preferred Stock to be converted. The date on which such
conversion is to be effected (the "Conversion Date") shall be on the date the
Notice of Conversion is delivered pursuant to Section IV (j) hereof. Except as
provided herein, each Notice of Conversion, once given shall be irrevocable. If
the Holder is converting less than all of the Stated Value represented by a
certificate for the Series A Preferred Stock(s) tendered by the Holder in the
notice of Conversion, the Company shall deliver to the Holder a new Series A
Preferred Stock certificate for such Stated Value as has not been converted
within five (5) Business Days of the Company's receipt of the original Series A
Preferred Stock and Notice of Conversion. Upon the entire conversion of the
Series A Preferred Stock or the redemption of the Series A Preferred Stock,
Series A Preferred Stock shall be returned to the Company for cancellation.

         (b) On the first business day occurring after the expiration of the
Conversion Period (the "Automatic Conversion Date"), for each share of Series A
Preferred Stock shall be automatically convertible into shares of Common Stock
at the Conversion Price; provided, however, that no shares of Series A Preferred
Stock shall be converted (i) unless the Company shall have duly reserved for
issuance to the Holder a sufficient number of shares of common Stock to issue
upon such conversion or (ii) if an Event of Default shall have occurred
hereunder and is continuing. In connection with such conversion, the Company
shall deliver to the Holder of such shares of Series A Preferred Stock a written
notice (the "Company Conversion Notice"). The Company Conversion Notice shall
specify the number of shares of Series A Preferred Stock that will be subject to
automatic conversion on the Company Conversion Date. The Company shall deliver
or cause to be delivered the Company Conversion Notice at least two (2) Business
Days before the Company Conversion Date. The Holder of the Series A Preferred
Stock shall surrender the certificates representing such shares at the office of
the Company not later than five (5) Business Days after the Company Conversion
Date. Each of a Notice of Conversion and a Company Conversion Notice is
sometimes referred to herein as a Notice of Conversion, and each of a Conversion
Date and a Company Conversion Date is sometimes referred to herein as a
Conversion Date.

         (c) Not later than two (2) Business Days after the Conversation Date,
the Company will deliver to the individual (i) a certificate or certificates
representing the number of shares of Common Stock being acquired upon the
conversion of Series A Preferred Stock and (ii) once received from the Company,
Series A Preferred Stock in principal amount equal to the principal amount of
Series A Preferred Stock not converted; provided, however, that the Company
shall not be obligated to issue certificates evidencing the shares of Common
Stock issuable upon conversion of any Series A Preferred Stock until the Series
A Preferred Stock are either delivered for conversion to the Company that such
Series A Preferred Stock have been lost, stolen or destroyed and provides an

                                       24

<PAGE>

agreement reasonably acceptable to the Company to indemnify the Company from any
loss incurred by it in connection therewith. In the case of a conversion
pursuant to a Notice of Conversion, if such certificate or certificates are not
delivered by the date required under this Section (V(c)), the Holder shall be
entitled by providing written notice of the Company at any time on or before its
receipt of such certificate or certificates thereafter, to rescind such
conversion, in which event the Company shall immediately return the Series A
Preferred Stock tendered for conversion.

         (d) (i) The Conversion Price for each. share of Series A Preferred
Stock in effect on any Conversion date shall be the lesser of (a} the Fixed
Conversion Price or (b) eighty percent (80%) of the lowest Per Share Market
Value for the Common Stock in the ten (10) Trading Days preceding the date of
conversion, but in no event less than 20 percent (30%) of the Fixed Conversion
Price (the "Floating Conversion Price"). For purpose of determining the closing
bid price on any day, reference shall be to the closing bid price for a share of
Common Stock on such date on the NASD OTC Bulletin Board, as reported on
Bloomberg, L.P. (or similar organization or agency succeeding to its functions
or reporting prices).

                  (ii) If the Company, at any time while any Series A Preferred
Stock are outstanding, (a) shall pay a stock dividend or otherwise make a
distribution or distributions on shares to its Junior Securities payable in
shares of its capital stock (whether payable in shares of its Common Stock or of
capital stock of any class), (b) subdivide outstanding shares of Common Stock
into larger number of shares, (c) combine outstanding shares of Common Stock
into a smaller number of shares, or (d) issue by reclassification of shares of
Common Stock any shares of capital stock of the Company, the Fixed Conversion
Price designed in Section IV(d)(i) shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock of the Company
outstanding before such event and of which the denominator shall be the number
of shares of Common Stock outstanding after such event. Any adjustment made
pursuant to this Section IV (d) (ii) shall become effective immediately after
the record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.

                  (iii) If the Company, at any time while any Series A Preferred
Sock are outstanding, shall issue or sell shares of Common Stock, or options,
warrants or other rights to subscribe for or purchase shares of Common Stock,
(excluding shares of Common Stock issuable upon exercise of options, warrants or
conversion rights granted prior to the date hereof) and at a price per share
less than the Per Share Market Value of Common Stock at the issue date mentioned
below, the Fixed Conversion Price designated in Section IV(d)(i) shall be
multiplied by a fraction, of which the denominator shall be the number of shares
of Common Stock (excluding treasury shares, if any) outstanding on the date of
issuance of such rights or warrants plus the number of additional shares of
Common Stock offered for subscription or purchase, and of which the numerator
shall be the number of shares of Common Stock (excluding treasury shares, if
any) outstanding on the date of issuance of such shares, options, warrants or
rights plus the number of shares which the aggregate offering price of the total
number of shares so offered would purchase at such Per Share market Value. Such
adjustment shall be made whenever such rights or warrant are issued, and shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such rights or warrants. However, upon the
expiration of any right or warrant to purchase Common Stock the issuance of
which resulted in an adjustment in the Conversion Price designated in Section

                                       25

<PAGE>

IV(d)(i) pursuant to this Section IV(d)(iii), if any such right or warrant shall
expire and shall not have been exercised, the Fixed Conversion Price designated
in Section IV(d)(i) shall immediately upon such expiration be recomputed and
effective immediately upon such expiration be increased to the price which it
would have been (but reflecting any other adjustments in the Conversion Price
made pursuant to the provisions of this Article IV after the issuance of such
rights or warrants) had the adjustment of the Conversion Price made upon the
issuance of such rights or warrants been made on the basis of offering for
subscription or purchase only that number or shares of Common Stock actually
purchased upon the exercise of such rights or warrants actually exercised.

                  (iv) If the Company, at any time while Series A Preferred
Stock are outstanding, shall distribute to all holders of Common Stock (and not
to Holders of Series A Preferred Stock) evidences of its indebtedness or assets
or rights or warrants to subscribe for or purchase any security (excluding those
referenced in Section IV(d)(iii) above) then in each such case the Conversion
Price at which each Series A Preferred Stock shall thereafter be convertible
shall be determined by multiplying the Fixed Conversion Price in effect
immediately prior to the record date filed for determination of stockholders
entitled to receive such distribution by a fraction of which the denominator
shall be the Per Share Market Value of Common Stock determined as of the record
date mentioned above, and of which the numerator shall be such Per Share Market
Value of the Common Stock on such record date less the then fair market value at
such record date of the portion of such assets or evidence of indebtedness so
distributed applicable to one outstanding share of Common Stock as determined by
the Board of Directors in good faith; provided, however, that in the event of a
distribution exceeding ten percent (10%) of the net assets of the Company, such
fair market value shall be determined by a nationally recognized or major
regional investment banking firm or firm of independent certified public
accountant or recognized standing (which may be the firm that regularly examines
the financial statement of the Company) (an "Appraiser") selected in good faith
by the Holders of a majority of a principal amount of the Series A Preferred
Stock then outstanding; and provided, further, that the Company, after receipt
of the determination by such Appraiser shall have the right to select an
additional Appraiser, in which case the fair market value shall be equal to the
average of the determination by each such Appraiser. In either case the
adjustments shall be described in a statement provided to the Holder and all
other Holders of Series A Preferred Stock of the portion of assets or evidences
of indebtedness so distributed or such subscription rights applicable to one
share of Common Stock. Such Adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the record
date mentioned above.

                  (v) All calculations under this Article IV shall be made to
the nearest 1/1000th of a cent or the nearest 1/1000th of a share, as the case
may be. Any calculation over .005 shall be rounded up to the next cent or share
and any calculation less than .005 shall be rounded down to the previous cent or
share.

                  (vi) In the event the Fixed Conversion Price is not adjusted
pursuant to Section IV(d)(ii), (iii), (iv), or (v), within the (10) Business
Days following the occurrence of an event described therein, the Holder shall
have the right to require the Company to redeem all of the Holder's Series A
Preferred Stock at 130% of the Stated Value of such Holder's Series A Preferred
Stock an the Company shall pay such amount to the holder pursuant to the written
instructions provided by the Holder.

                                       26

<PAGE>

                  (vii) Whenever the Fixed Conversion Price is adjusted pursuant
to Section IV(d) (ii),(iii), (iv) or (v), or redeemed pursuant to Section
IV(d)(vi), the Company shall within two (2) days after the determination of the
new Fixed Conversion Price mail and fax to the Holder and to each other Holder
of Series A Preferred Stock, a notice setting forth the Fixed Conversion Price
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment.

                  (viii) In case of any reclassification of the Common Stock,
any consolidation or merger of the Company with or into another person., the
sale or transfer of all or substantially all of the assets of the Company or any
compulsory share exchange pursuant to which the Common Stock is converted into
other securities, cash or property, then each holder of Series A Preferred Stock
then outstanding shah have the right thereafter to convert such Series A
Preferred Stock only into the shares of stock and other securities and property
receivable upon or deemed to be held by holders of Common Stock following such
reclassification, consolidation., merger, sale, transfer or share exchange
(except in the event the property is cash, then the Holder shall have the right
to convert the Series A Preferred Stock and receive cash in the same manner as
other stockholders), and the Holder shall be entitled upon such even to receive
such amount of securities or property as the shares of the Common Stock into
which such Series A Preferred Stock could have been converted immediately prior
to such classification, consolidation, merger, sale, transfer or share exchange
would have been entitled. The terms of any such consolidation, merger, sale,
transfer or share exchange shall include such terms so as to continue to give to
the Holder the right to receive the securities or property set forth in this
Section IV(d)(viii) upon any conversion following such consolidation, merger,
sale, transfer of share exchange. This provision shall similarly apply to
successive reclassifications, consolidations, mergers, sales, transfers or share
exchanges.

                  (ix) If:

                           (A)      the Company shall declare a dividend (or any
                                    other distribution) on its Common Stock; or

                           (B)      the Company shall declare a special
                                    nonrecurring cash dividend on or a
                                    redemption of its Common Stock; or

                           (C)      the Company shall authorize the granting to
                                    all holders of the Common Stock rights or
                                    warrants to subscribe for or purchase any
                                    shares of capital stock of any class or of
                                    any rights; or

                           (D)      the approval of any stockholders of the
                                    Company shall be required in connection with
                                    any classification of the Common Stock of
                                    the Company (other than a subdivision or
                                    combination of the outstanding shares of
                                    Common Stock), any consolidation or merger
                                    to which the Company is a party, any sale or
                                    transfer of all or substantially all of the
                                    assets of the Company, or any compulsory
                                    share exchange whereby the Common Stock is
                                    converted into other securities, cash or
                                    property; or

                                       27

<PAGE>

                           (E)      the Company shall authorize the voluntary or
                                    involuntary dissolution, liquidation or
                                    winding-up of the affairs of the Company;

then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Series A Preferred Stock., and shall cause to be
mailed and faxed to the Holders of Series A Preferred Stock at their last
addresses as it shall appear upon the Series A Preferred Stock Register, at
least thirty (30) calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined, or (y) the date on which
such reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding-up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reclassifications, consolidation merger, sale,
transfer, share exchange, dissolution, liquidation or winding-up; provided,
however, that the failure to mail such notice or any defect therein or in the
mailing thereof shall not affect the validity of the corporate action required
to be specified in such notice.

         (e) If at any time conditions shall arise by reason of action or
inaction taken by the Company which in he opinion of the Board of Directors are
not adequately covered by the other provisions hereof and which might materially
and adversely affect the rights of the Holders of Series A Preferred Stock
(different than or distinguished from the effect generally on rights of holders
of any class of the Company's capital stock), the Company shall, at least thirty
(30) calendar days prior to the effective date of such action, mail and fax a
written notice to each Holder of Series A Preferred Stock briefly describing the
action contemplated and the material adverse effects of such action on the
rights of such Holders and an Appraiser selected by the Holders of majority of
the outstanding Series A Preferred Stock shall give its opinion as to the
adjustment, if any (not inconsistent with the standard established in this
Article IV), of the Fixed Conversion Price (including, if necessary, any
adjustment as to the securities into which Series A Preferred Stock may
thereafter be convertible) and any distribution which is or would be required to
preserve without diluting the rights of the Holders of Series A Preferred Stock;
provided, however, that the Company, after receipt of the determination by such
Appraiser, shall have the right to select an additional Appraiser, in which case
the adjustment shall be equal to the average of the adjustments recommended by
each such Appraiser. The Board of Directors shall make the adjustment
recommended forthwith upon the receipt of such opinion or opinions or the taking
of any such action contemplated, as the case may be; provided, however, that no
such adjustment of the Fixed Conversion Price shall be made which in the opinion
of the Appraiser(s) giving the a foresaid opinion or opinions would result in an
increase of the Fixed Conversion Price to more than the Fixed Conversion Price
then in effect.

         (f) The Company covenants that it will at all times reserve and keep
available out of its authorized and unissued Common Stock solely for the purpose
of issuance upon conversion of Series A Preferred Stock as herein provided, free
from preemptive rights or any other actual contingent purchase rights of persons
other than the Holders of Series A Preferred Stock, such number of shares of
Common Stock as shall be issuable (taking into account the adjustment and
restrictions of Section IV(d) and Section IV(e) hereof) upon the conversion of
the aggregate principal amount of all outstanding Series A Preferred Stock. The

                                       28

<PAGE>

Company covenants that all shares of Common Stock that shall be so issuable
shall, upon issue, be duly and validly authorized, issued and fully paid and
nonassessable.

         (g) No fractional share of Common Stock shall be issuable upon a
conversion hereunder and the number of shares to be issued shall be rounded up
to the nearest whole share. If a fractional share interest arises upon any
conversion hereunder, the Company shall eliminate such fractional share interest
by issuing Holder an additional full share of Common Stock.

         (h) The issuance of certificates for shares of Common Stock on
conversion of Series A Preferred stock shall be made without charge to the
Holder for any documentary stamp or similar taxes that maybe payable in respect
of the issue or delivery of such certificate, provided that the Company shall
not be required top ay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate upon conversion in
a name other than that of the Holder and the Company shall not be required to
issue or deliver such certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.

         (i) Series A Preferred Stock converted into Common Stock shall be
cancelled upon conversion.

         (j) Each Notice of Conversion shall be given by facsimile to the
Company no later than 2:00 pm New York time. Each Company Notice of Conversion
shall be given by facsimile addressed to each Holder of Series A Preferred Stock
at the facsimile telephone number and address of such Holder appearing on the
books of the Company as provided to the Company by such Holder for the purpose
of such Company Notice of Conversion. Any such notice shall be deemed given and
effective upon the transmission of such facsimile at the facsimile telephone
number specified in this Section IV (j) (with printed confirmation of
transmission). In the event that the Company receives the Notice of Conversion
after 4:00 p.m. New York time, the Conversion Date shall be deemed to be the
next Business Day. In the event that the Company receives the Notice of
Conversion after the end of the Business Day, notice will be deemed to have been
given the next Business Day.

                        V. EVENTS OF DEFAULT AND REMEDIES

         (a) "Event of Default", wherever used herein, means any one of the
following events:

                  (i) the Company shall fail to observe or perform any material
covenant, agreement or warranty contained in this Series A Preferred Stock
Certificate of Designation, and such failure shall not have been remedied within
ten (10) Business Days after the date on which written notice of such failure
shall have been given;

                  (ii) the occurrence of any event or breach or default by the
Company under the Purchase Agreement or any other Transaction Document (as
defined in the Purchase Agreement) and such failure or breach shall not have
been remedied within the applicable cure period provided for therein, if any;

                                       29

<PAGE>

                  (iii) the Company or any of its subsidiaries shall commence a
voluntary case under the United Sates Bankruptcy Code as now or hereafter in
effect or any successor thereto (the "Bankruptcy Code"); or an involuntary case
is commenced against the Company under the Bankruptcy Code and the Company fails
to pursue dismissal of the case within sixty (60) days after the commencement of
the case; or the Company commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to the Company or there is commenced against the
Company any such proceeding and the Company fails to pursue dismissal of the
case within sixty (60) days after commencement of the case; or the Company
suffers any appointment of any custodian or the like for it or any substantial
part of its property and the Company fails to pursue dismissal of the custodian
within sixty (6)) says after the appointment; or the Company makes a general
assignment for the benefit of creditors; or any corporate or other action is
taken by the Company for the purpose of effecting any of the foregoing.

                  (iv) trading in the common stock of the Company shall have
been suspended, delisted, or otherwise ceased by the Securities and Exchange
Commission or the NASD or other exchange or the Nasdaq (whether the National
Market or otherwise), and trading is not reinstated within twenty (20) Trading
Days, except for (i) any suspension of trading of limited duration solely to
permit dissemination of material information regarding the Company, and trading
is reinstated promptly after such dissemination and (ii) any general suspension
of trading for all companies trading on such exchange or market or OTCBB;

                  (v) the Company shall issue a press release, or otherwise make
publicly known, that it is not honoring properly executed Notice of Conversion
for any reason whatsoever, or

                  (iv) the Company shall issue or enter into an agreement to
issue any equity or equity equivalent security with a floating conversion price
substantially similar to the Series A Preferred Stock.

         (b) If any Event of Default occurs and continues, beyond any cure
period, if any, then so long as such Event of Default shall then be continuing
any Holder may, by notice to the Company demand redemption of the Shares of
Series A Preferred Stock at the Redemption Price (as defined herein), and such
Holder may immediately and without expiration of any grace period enforce any
and al of its rights and remedies hereunder and all other remedies available to
it under applicable law. Such declaration may be rescinded and annulled by such
Holder at any time prior to payment hereunder. No such rescission or annulment
shall affect any subsequent Event of Default or impair any right consequent
thereon. This shall include, but not be limited to the right to temporary,
preliminary and permanent injunctive relief without the requirement of posting
any bond or undertaking.

         (c) Such Holder may thereupon proceed to protect and enforce its rights
either by suit in equity, or by action at law, or by other appropriate
proceedings whether for the specific performance (to the extent permitted by
law) of any covenant or agreement contained in this Series A preferred Stock

                                       30

<PAGE>

Certificate of Designation or in aid of the exercise of any power granted in
this Series A Preferred Stock Certificate of Designation, and proceed to enforce
the redemption of any of the Series A Preferred Stock held by it, and to enforce
any other legal or equitable right of such Holder.

         (d) As a non-exclusive remedy, in the Event of a Default, the Holder
can convert the outstanding shares of Series A Preferred Stock at the lesser of
the Fixed Conversion Price or the Floating Conversion Price upon giving a notice
of conversion to the Company. The Company shall not have the right to object to
the conversion or the calculation of the applicable Conversion Price.

         (e) To effectuate the terms and provisions of this Certificate of
Designation of Series A Preferred Stock, the Holder may send notice of any
default to the Attorney-in-Fact (as defined in the Purchase Agreement) and send
a copy of such notice to the Company and its counsel, simultaneously, and
request the Attorney-in-Fact, to comply with the terms of this Certificate of
Designation of Series A Preferred Stock and the Purchase Agreement and all
agreements entered into pursuant to the Purchase Agreement on behalf of the
Company.

                                 VI. REDEMPTION

         (a) Except as provided in this section VI (a), neither the Holder nor
the Company may demand that the Series A Preferred Stock be redeemed. Until all
of the Series A Preferred Stock has been converted, in the event that the
Company engages in a single transaction or a series of related transactions that
cause it to (i) consolidate with or merge with or into any other Person, (ii)
permit any other Person to consolidate with or merge into it, or (iii) undergo a
Change in Control, then at the option of the Company exercisable by giving
thirty (30) days written notice to the Holder, the Company may request that the
Holder convert all shares of Series A Preferred Stock then held by the Holder
into Common Stock upon the terms and conditions set forth in this Certificate of
Designation. If the Holder does not comply with such request, the Company may
redeem all Series A Preferred Stock held by the Purchaser at their Stated Value
(the "Redemption Price"). The Company is not obligated to provide for redemption
of the Series A Preferred Stock through a sinking fund.

         (b) Shares of Series A Preferred Stock which have been redeemed or
converted shall be deemed retired pursuant to the DGCL and shall thereafter
resume the status of authorized and unissued shares of Preferred Stock,
undesignated as to series, and may be redesignated and reissued as part of any
new series of Preferred Stock other than Series A Preferred Stock.

         (c) No redemption shall be made and no sum set aside for such
redemption unless at the time thereof (i) all required mandatory redemption on
Senior Security have been made in full and (ii) all optional redemptions of
Senior Securities, if any, previously declared, have been made in full. No
redemption shall be made and no sum set aside for such redemption at any time
that the terms or provisions of any indenture or agreement of the Company,
including any agreement relating to indebtedness, specifically prohibits such
redemption or setting aside or provides that such redemption or setting aside
would constitute a breach or default thereunder (after notice or lapse of time
or both), except with the written consent of the lender or other parties to said
agreement as the case may be.

                                       31

<PAGE>

         (d) If any redemption shall at any time be prohibited by the DGCL, the
same shall be deferred until such time as the redemption can occur in full
compliance with such statute.

         (e) In the event the Company shall redeem shares of Series A Preferred
Stock notice of such redemption shall be given by first class mail, postage
prepaid, or by confirmed facsimile transmission, not less than thirty (30)
business days prior to the date fixed by the Board for redemption to each holder
of Series A Preferred Stock at the address that appears on the Company's stock
record books; provided, however, that no failure to provide such notice or any
defect therein shall affect the validity of the redemption proceeding except as
to the holder to whom the Company has failed to send such notice or whose notice
was defective. Each notice shall state (i) the redemption date, (ii) the number
of shares of Series A Preferred Stock to be redeemed, (iii) the Redemption
Price; and (iv) the place of places where certificates for shares of aforesaid
then from and after the redemption date (unless default shall be made by the
Company in providing money for the payment of the Redemption Price of the shares
called for redemption) said shares shall no longer be deemed to be outstanding
and all rights of the holders thereof shall cease (other than the right to
receive the Redemption Price or Common Stock with respect to converted Series A
Preferred Stock). Upon surrender of the certificates for Series A Preferred
Stock accompanied by appropriate stock powers, the shares shall be redeemed by
the Company at the Redemption Price. In case fewer than all shares represented
by any such certificates are redeemed, a new certificate representing the shares
of Series A Preferred Stock not so redeemed shall be issued to the holder
without cost.

                                    VII. RANK

         The Series A. Preferred Stock shall, as to redemptions and the
distribution of assets upon liquidation, dissolution or winding up of the
Company, rank (i) prior to the Company's Common Stock; (ii) prior to any class
or series of capital stock of the Company hereafter created that, by its terms,
ranks junior to the Series A Preferred Stock ("Junior Securities"); (iii) junior
to any class or series of capital stock of the Company hereafter created (with
the consent of the Holders of a majority of the outstanding Series A Preferred
Stock) which by its terms and ranks senior to the Series A Preferred Stock
("Senior Securities"); and (iv) pari passu with any other series of preferred
stock of the Company hereafter created (with the consent of the Holders of a
majority of the outstanding Series A Preferred Stock) which by its terms ranks
on a parity ("Pari Passu Securities") with the Series A Preferred Stock.

                          VIII. LIQUIDATION PREFERENCE

         If the Company shall commence a voluntary case under the U.S. Federal
bankruptcy laws or any other applicable bankruptcy, insolvency or similar law,
or consent to the entry of an order for relief in an involuntary ease under any
law or to the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or other similar official) of the Company or of any
substantial part of its property, or make an assignment for the benefit of its
creditors, or admit in writing its inability to pay its debts generally as they
become due, or if a decree or order for relief in respect of the Company shall

                                       32

<PAGE>

be entered by a court having jurisdiction in the premises in an involuntary case
under the U.S. Federal bankruptcy laws or any other applicable bankruptcy,
insolvency or similar law resulting in the appointment of a receiver,
liquidator, assignee, custodian, trustee sequestrator (or other similar
official) of the Company or of any substantial part of its property, or ordering
the winding up or liquidation of its affairs and any such decree or order shall
be unstayed and in effect for a period of sixty (60) consecutive days and, on
account of any such event, the Company shall liquidate, dissolve or wind up, or
if the Company shall otherwise liquidate, dissolve or wind up, including, but
not limited to, the sale or transfer of all or substantially all of the
Company's assets in one transaction or in a series of related transactions (a
"Liquidation Event"), no distribution shall be made to the holders of any shares
of capital stock of the received the Liquidation Preference (as defined below)
with respect to each share. If, upon the occurrence of a Liquidation Event, the
assets and funds available for distribution among the Holders of the Series A
Preferred Stock and Holders of Pari Passu Securities shall be insufficient to
permit the payment to such holders of the preferential amounts payable thereon,
then the entire assets and funds of the Company legally available for
distribution to the Series A Preferred Stock and the Pari Passu Securities shall
be distributed ratably among such shares in proportion to the ratio that the
Liquidation Preference payable on each share bears to the aggregate Liquidation
Preference payable on all such shares. The purchase or redemption by the Company
of stock of any class, in any manner permitted by law, shall not, for the
purposes hereof, be regarded as a liquidation, dissolution or winding up of the
Company. Neither the consolidation or merger of the Company with or into any
other entity not the sale or transfer by the Company of less than substantially
all of its assets shall, for the purposes hereof, be deemed to be a liquidation,
dissolution or winding up of the Company. The "Liquidation Preference" with
respect to a share of Series A Preferred Stock means an amount equal to the
Stated Value thereof. The Liquidation Preference with respect to any Pari Passu
Securities shall be as set forth in the Certificate of Designation filed in
respect thereof.

                                IX. VOTING RIGHTS

         The Holders of the Series A Preferred Stock have no voting power
whatsoever, except as otherwise provided by the DGCL. To the extent that under
the DGCL the vote of the Holders of the Series A Preferred Stock, voting
separately as a class or series, as applicable, is required to authorize a given
action of the Company, the affirmative vote or consent of the Holders of at
least a majority of the ten outstanding shares of the Series A Preferred Stock
represented at a duly held meeting at which a quorum is present or by written
consent of the Holders of at least a majority of the then outstanding shares of
Series A Preferred Stock (except as otherwise may be required under the DGCL)
shall constitute the approval of such action by the class. To the extent that
under the DGCL Holders of the Series A Preferred Stock are entitled to vote on a
matter with holders of Common Stock, voting together as one class, each share of
Series A Preferred Stock shall be entitled to a number of votes equal to the
number of shares of Common Stock into which it is then convertible (subject to
the limitations contained in Articles IV) using the record date for the taking
of such vote of shareholders as the date as of which the Conversion Price is
calculated.

                                       33

<PAGE>

                                X. MISCELLANEOUS

         (a) If any shares of Series A Preferred Stock are converted pursuant to
Article IV, the shares so converted shall be canceled, shall return to the
status of authorized, but unissued preferred stock of no designated series, and
shall not be issuable by the Company as Series A Preferred Stock.

         (b) Upon receipt by the Company of (i) evidence of the loss, theft,
destruction or mutilation of any Preferred Stock certificate(s) and (ii) (y) in
the case of loss, theft or destruction, of indemnity (without any bond or other
security) reasonably satisfactory to the Company, or (z) in the case of
mutilation, upon surrender and cancellation of the Preferred Stock
certificate(s), the Company shall execute and deliver new Preferred Stock
certificate(s) of like tenor and date. However, the Company shall not be
obligated to reissue such lost or stolen Preferred Stock certificate(s) if the
Holder contemporaneously requests the Company to convert such Series A Preferred
Stock.

         (c) Upon submission of a Notice of Conversion by a Holder of Series A
Preferred Stock, (i) the shares covered thereby shall be deemed converted into
shares of Common Stock and (ii) the Holder's rights as a Holder of such
converted shares of Series A preferred Stock shall cease and terminate,
excepting only the right to receive certificates for such shares of Common Stock
and to any remedies provided herein or otherwise available at law or in equity
to such Holder be cause of a failure by the Company to comply with the terms of
this Certificate of Designation. Notwithstanding the foregoing, if a Holder has
not received certificates for all Shares of Common Stock prior to the tenth
(10th) business day after the expiration of the Delivery Period with respect to
a conversion of Series A Preferred Stock for any reason, then (unless the Holder
otherwise elects to retain its status as a holder of Common Stock by so
notifying the Company within five (5) business days after the expiration of such
ten (10) business day period) the Holder otherwise elects to retain its status
as a holder of Common Stock by so notifying the Company within five (5) business
days after the expiration of such ten (10) business day period) the Holder shall
regain the rights of a Holder of Series A Preferred Stock with respect to such
unconverted shares of Series A p[referred Stock and the Company shall, as soon
as practicable, return such unconverted shares to the Holder. In all cases, the
Holder shall retain all of its rights and remedies for the Company's failure to
convert Series A Preferred Stock.

         (d) The remedies provided in this Certificate of Designation shall be
cumulative and in addition to all other remedies available under this
Certificate of Designation, at law or in equity (including a decree of specific
performance and/or other injunctive relief), and nothing herein shall limit a
Holder's right to pursue actual damages for any failure by the Company to comply
with the terms of this Certificate of Designation. The Company acknowledges that
a breach by it of its obligations hereunder will cause irreparable harm to the
Holders of Series A Preferred Stock and that the remedy at law for any such
breach may be inadequate. The Company therefore agrees, in the event of any such
breach or threatened breach, that the Holders of Series A Preferred Stock shall
be entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required.

                                       34

<PAGE>

         IN WITNESS WHEREOF, the undersigned, being the President and Secretary
of VisiJet Inc., hereby declares under penalty of perjury that the foregoing is
a true and correct copy of the Certificate of Designation of the Rights and
Preferences of the Series A 0% Convertible Preferred Stock of VisiJet, Inc. duly
adopted by the Board of Directors of VisiJet, Inc. on August 24, 2004, and this
Certificate of Designation is executed by the undersigned on behalf of VisiJet,
Inc. this 24th day of August, 2004.

                                             VisiJet, Inc.

                                             By: /S/ RANDAL A. BAILEY
                                                 -------------------------------
                                                 Randal Bailey, President

                                             By: /S/ LAURENCE SCHREIBER
                                                 -------------------------------
                                                 Laurence Schreiber, Secretary

                                       35

<PAGE>

                                   APPENDIX I

                              NOTICE OF CONVERSION
                          AT THE ELECTION OF THE HOLDER

(To be Executed by the Registered Holder
in order to Convert the Series A preferred Stock of VisiJet, Inc.

The undersigned hereby irrevocably elects to convert the Series A Preferred
Stock into shares of Common Stock, par value $.001 per share (the "Common
Stock"), of VisiJet, Inc. (the "Company") according to the provisions of the
Certificate of Designation hereof, as of the date written below. If shares are
to be issued in the name of a person other than undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates and opinions as reasonably requested by the Company
in accordance therewith.

Conversion calculations:  ______________________________________________________
                              Date of Effective Conversion

                          ______________________________________________________
                              Number of Shares to be Converted

                          ______________________________________________________
                              Applicable Conversion Price

                          ______________________________________________________
                              Number of Shares to be Issued Upon Conversion

                          ______________________________________________________
                              Signature

                          ______________________________________________________
                              Name

                          ______________________________________________________
                              Address

                                       36

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