Document:

Exhibit 10.4

Exhibit
10.4

PURCHASE
AND SALE AGREEMENT

THIS
PURCHASE AND SALE AGREEMENT, dated April 28, 2005, by and between McINTOSH
INN OF OXFORD VALLEY, INC. ("Seller") with an address at 3101 West Cabot
Boulevard, Langhorne, PA 19047 and HERSHA HOSPITALITY LIMITED PARTNERSHIP, a
Virginia limited partnership (“Buyer”) with an address at 3101 West Cabot
Boulevard, Langhorne, PA 19047 is entered into with reference to the recitals
set forth below and all of the terms and conditions of this Agreement, and
constitutes a contract of purchase and sale between the parties.

RECITALS

A.            
Seller is
the owner of that certain real property including all easements, appurtenances
and rights of way (collectively, the "Land") located in the County of Bucks,
Commonwealth of Pennsylvania, more particularly described in Exhibit
“A”
attached hereto.

B.            
Seller
owns and operates a hotel facility (the "Hotel") known as the Holiday Inn
Express of Langhorne - Oxford Valley, which includes, among other things,
approximately eighty-eight (88) guest rooms and parking
facilities.

C.            
Seller
desires to sell, and Buyer desires to purchase, the Land, the Improvements (as
hereinafter defined) and certain Personal Property (as hereinafter defined) used
in connection with the Hotel on the terms and conditions set forth in this
Agreement.

	 	
      1.
	
      Definitions.

1.1          
Defined
Terms. As used
in this Agreement, the terms defined in the recitals hereto shall have the
respective meanings assigned thereto in said recitals and the following terms
shall have the meanings given to them below, such definitions to be legally
applicable to the singular and plural forms thereof.

"Affiliate" means
and refers to any person or entity which, directly or indirectly, is in control
of, is controlled by, or is under common control with, a Party. For purposes of
this definition, a person or entity shall be deemed to be "controlled by" a
Party if a Party, directly or indirectly, (i)
possesses power to vote fifty (50%) percent or more of the securities having
ordinary voting power for the election of directors having ordinary voting power
for the election of directors of such person or (ii)
possesses power to direct or cause the direction of the management and policies
of such person whether by contract, as a general partner (or through control of
a general partner).

"Agreement" means
and refers to this Purchase and Sale Agreement between Seller and
Buyer.

“Assigned
Contracts” means
and refers to those contracts and agreements to which the Seller or McIntosh
Motor Inns, Inc. (“MMI”), the
Hotel’s manager,  is a
party which relate to the maintenance or repair of the Real Property or the
operation of the Hotel, each of which is set forth on Exhibit “B” attached
hereto, subject to the consents required under Section 10.2.

"Business
Day" means
and refers to any day other than a Saturday or Sunday or legal holiday in the
Commonwealth of Pennsylvania.

"Buyer" means
and refers to Hersha Hospitality Limited Partnership or its permitted assignee
pursuant to the provisions of Section 9.1 of this Agreement.

"Closing" means
the time and moment at which the Seller's Deed is delivered and the balance of
the Purchase Price paid.

"Closing
Date" means
and refers to the date on which the Closing shall occur.

"Closing
Time" means
12:01 A.M. Eastern Time on the Closing Date.

"Due
Diligence Period" means a
period of fifteen (15) days from the Effective Date.

"Effective
Date" means
and refers to the date this Agreement has been signed and delivered to both
Buyer and Seller.

"Escrow
Agent" shall
mean and refer to Hodges Ward Elliott, Inc.

"Excluded
Assets” shall
mean and refer to the following assets of the Seller which shall not be included
in the sale contemplated hereby and shall not be assigned or transferred to the
Buyer: (i) Seller’s
Records; (ii)
Pre-Closing Receivables; (iii) all cash
and cash equivalents of the Seller; (iv) the
property management hardware and software and related support systems;
(v) prepaid
taxes and any rights of Seller to any tax refunds; (vi) all
insurance policies of Seller and all rights of Seller arising under such
policies; (vii) all
rights and claims of Seller, contingent or otherwise, against third parties
relating to the Property or its operation by Seller prior to the Closing Time,
whether in tort, contract or otherwise, including causes of action, unliquidated
rights and claims pursuant to any warranties or guarantees made by advertisers,
manufacturers, suppliers, insurers or vendors; and (viii) all
rights of Seller under this Agreement. 

“Franchise
License” shall
mean that certain Holiday Inn Express Conversion License Agreement dated
June 30, 2003 by and between Holiday Hospitality Franchising, Inc., as
Licensor, and McIntosh Inn of Oxford Valley, Inc., as Licensee.

“Improvements” means
any and all buildings, structures, parking areas and other improvements,
including the hotel situated on the Land.

"Party" or
"Parties" means
Buyer and/or Seller, as the context may require.

"Permitted
Exceptions" means
(a) laws, regulations or ordinances of federal, state, county or local entities
or agencies having jurisdiction over the Property; (b) easements, covenants and
restrictions of record, provided that same do not materially and adversely
interfere with the use of the Property as a hotel; (c) all current real estate
taxes, assessments and other sums assessed against the Property and unpaid as of
the Closing, subject to prorations for the current year owing by Seller; and (d)
all other matters to which Buyer fails to timely object (or waives its
objection) in accordance with the provisions of Section 3.

2

"Personal
Property" means
all items of tangible personal property to the extent owned by Seller and which
are affixed to or located at and used in connection with the operation of the
Hotel, including without limitation, furniture, fixtures, equipment, linens,
office supplies, cleaning and maintenance supplies and guest room supplies, but
excluding (i) any tangible personal property owned by tenants and used in or in
connection with the businesses operated by the separate tenants at the Hotel or
Property, if any, and (ii) any tangible personal property in the office of
MMI.

"Post-Closing
Adjustment Period" means
the sixty (60) day period subsequent to the Closing Date during which time
Seller and Buyer shall resolve certain issues, open items, or disputes pursuant
to the provisions of subsection 6.3(g) of this Agreement.

"Post-Closing
Business Arrangements" means
any of the business activities and/or obligations to be completed by Seller
pursuant to the provisions of Article 6 of this Agreement.

"Prime
Rate" means
the prime rate of interest as specified in The
Wall Street Journal on such
date or if such date is not a Business Day, then on the next preceding day that
is a Business Day.

"Pre-Closing
Receivables" means
any accounts receivable, notes receivable or other obligations arising from or
in connection with the ownership, operation and activities of the Hotel up to
the Closing Time and attributable to such period of time, including, without
limitation, charges for lodging, meals, beverages, conference facilities,
recreational activities, leases and facilities and all other matters connected
with the Hotel or Property.

"Property" means
collectively the Real Property and the Personal Property, but excluding the
Excluded Assets.

”Real
Property" means
the Land and the Improvements.

"Scheduled
Closing Date" means
May 26, 2005 or any later Closing Date to which the Closing is adjourned by
mutual agreement of Seller and Buyer, provided however, that: (i) Buyer may
adjourn the Scheduled Closing Date (not to exceed fourteen (14) days) without
Seller’s consent, if Buyer’s lender for financing purposes is unable to process
the required documentation and close on the Scheduled Closing Date; (ii) Seller
may adjourn the Scheduled Closing Date (not to exceed thirty (30) days) without
Buyer's consent if Seller elects to cure, remove or remedy a New Matter as set
forth in Section 3.1(c); and (iii) either party may adjourn the Scheduled
Closing Date in accordance with the provisions of
Section 12.1.

"Seller's
Deed" means a
special warranty deed to be used to convey title to the Real Property to Buyer
or to Buyer's permitted assignee, which deed shall be substantially in the form
of the deed attached hereto as Exhibit “C”.

"Seller's
Employees" means
all employees employed at the Hotel by Seller as of the Closing
Date.

"Seller's
Records" means
all records pertaining to Seller's operation of the Hotel including, but not
limited to, procedures, manuals, invoices, bank account records, payroll
records, and sales records which will be retained by Seller in connection with
Seller's tax and accounting requirements.

3

"Wind-Up
Period" shall
mean the thirty (30) day period after the Closing Date (inclusive of the Closing
Date) during which time Seller and the Buyer shall attend to their respective
Post-Closing Business Arrangements.

	 	
      2.
	
      Purchase
      and Sale, Certain Adjustments and Contingencies.

2.1           
Agreement
for Purchase and Sale. In
consideration of the payment of the Purchase Price, Seller agrees to sell the
Property to the Buyer, and the Buyer agrees to buy the Property from the Seller,
at the price and on the terms, covenants and conditions set forth in this
Agreement.

2.2           Purchase
Price. The
Buyer hereby agrees to pay Seven Million Eight Hundred Thousand and No/100
Dollars ($7,800,000) for the Property (hereinafter referred to as "Purchase
Price").

2.3           Price. The
Purchase Price shall be paid by the Buyer to the Seller as follows:

(a)  The Buyer
shall deliver to the Escrow Agent its check in the amount of Four Hundred
Thousand and No/100 Dollars ($400,000) concurrent with the execution of this
Agreement (the “Deposit”). The Deposit shall be non refundable to Buyer except
as otherwise specifically set forth in this Agreement. The Deposit shall be held
by the Escrow Agent in an interest bearing trust account, or certificate of
deposit, or money market account of a money center bank. Any interest which
shall be earned on the Deposit shall be paid to the party entitled to the
principal. The party to which the interest earned is paid shall be responsible
for paying the income tax, if any, thereon. The Seller's EIN is 23-2586439 and
the Buyer's EIN number is 25-1823761.

(b)  Prior to
the Closing, Buyer shall deliver to the Escrow Agent funds in an amount
aggregating the Purchase Price less the Deposit, which funds shall be disbursed
by the Escrow Agent to Seller in accordance with the disbursement instructions
given by Seller to the Escrow Agent at or prior to Closing.

2.4          
[Intentionally
omitted.]

2.5          
Transfer
and Recording Charges. At
Closing, Seller and Buyer shall equally share the expense for all real estate
transfer taxes, recording taxes or documentary stamps imposed by any
governmental authority on the Seller's Deed to Buyer. Seller shall bear the cost
of recording the satisfaction of any mortgages discharged by Seller at Closing
and the cost of any other closing or recording charges normally paid by a seller
in a real estate transaction in the state and county where the Property is
located. Buyer shall bear the cost of recording charges in order to record the
Seller's Deed, the cost of any expenses associated with the giving or recording
of any mortgage given by Buyer in connection with its acquisition of the
Property, any title insurance premiums, survey costs and the cost of any other
closing or recording charges.

4

2.6           Escrow
Agent.

(a)  Buyer and
Seller hereby agree that Hodges Ward Elliott, Inc. shall be the Escrow Agent
under this Agreement.

(b)  Escrow
Agent shall hold the Deposit in accordance with the terms of Section 2.3.
In the event of any disagreement among the parties to this Agreement or among
them and any other person, resulting in adverse claims and demands being made in
connection with the Deposit, Escrow Agent shall be entitled to refuse to comply
with any such claims or demands as long as such disagreement may continue, and
in so refusing, shall make no delivery or other disposition of the Deposit then
held by it under this Agreement, and in doing so, Escrow Agent shall not become
liable in any way for such refusal, and Escrow Agent shall be entitled to
continue to refrain from acting until (i) the
rights of adverse claimants shall have been finally settled or adjudicated in a
court having jurisdiction thereof, or (ii) all
differences shall have been settled by agreement signed by both parties
hereto.

(c)  Escrow
Agent shall be responsible solely for the safekeeping of the Deposit. Escrow
Agent shall not be liable to Seller or Buyer for the performance or
nonperformance of any term of this Agreement by Seller or Buyer and shall not be
required to determine any questions of fact or law. Escrow Agent is authorized
to act upon any documents which it reasonably believes to be genuine without
incurring any liability with respect thereto. In the event litigation is
commenced involving the Deposit or this Agreement, Escrow Agent shall have the
right to deposit the Deposit with the clerk of the court in which the litigation
is pending, or if the Escrow Agent is a party to such litigation, to interplead
all interested parties in any court of competent jurisdiction and deposit the
Deposit with the clerk of such Court. Seller and Buyer agree that the Escrow
Agent shall not be liable for any error of judgment, or for any act or omission,
other than willful misconduct, or for any negligence other than gross
negligence.

3.            
Title
and Default.

	 	
      3.1
	
      Title.

(a)  After the
execution of this Agreement by the Parties, Buyer shall order a commitment for
title insurance in the amount of the Purchase Price together with copies of all
documents identified in the title commitment (collectively, the "Title
Documents") from All American Abstract Company, Inc. (the "Title Company").
Buyer shall pay for the cost of the issuance of the title
commitment.

(b)  The Buyer
shall have a period of fifteen (15) days from the date it shall have received
the Title Documents to examine title (the "Title Date"); provided that in no
event shall the Title Date extend beyond the expiration of the Due Diligence
Period. On or before the Title Date, Buyer shall notify Seller in writing of any
objections Buyer may have to the condition of title which do not constitute
Permitted Exceptions and that would prevent the issuance of title insurance at
commercially reasonable rates by a title company licensed to do business in the
state in which the Land is located ("Title Objections"). Seller shall notify
Buyer in writing within ten (10) days of receipt of the Title Objections whether
Seller will undertake to cure, remove or remedy each Title Objection ("Title
Response"). Within five (5) days of receipt of the Title Response, Buyer shall
either (i) accept
title subject to the undertakings set forth in the Title Response, or
(ii) reject
title. In the event Buyer rejects title, this Agreement shall be terminated by
written notice to Seller and the Deposit shall be returned to
Buyer.

5

(c)  Upon
acceptance of title as set forth above, all matters then affecting title shall
be deemed acceptable and satisfactory to Buyer, except for the matters set forth
in the Title Response and except for matters coming of record subsequent to the
report date referred to on the title report issued by the Title Company and of
which Seller has received written notice (the "New Matter(s)"). Seller shall not
be obliged to cure, remove or remedy any New Matter, except for removal of liens
or encumbrances caused by Seller in amounts aggregating not more than $150,000
(exclusive of first and second mortgages). Except as set forth in this
Section 3.1, if Seller refuses for any reason or no reason to cure, remove
or remedy any such New Matter, Buyer shall have the option of terminating this
Agreement by written notice to Seller or accepting title in its then state and
condition.

(d)  If Buyer
terminates this Agreement in accordance with Buyer's right to do so as set forth
in Section 3.1(b) or (c), the Deposit and all interest earned thereon shall
be returned by the Escrow Agent to the Buyer forthwith and, upon doing so,
neither Party shall have any further or continuing obligation or responsibility
to the other (except with respect to any restoration and indemnity obligations
under this Agreement which survive termination).

(e)  At the
Closing, Buyer shall cause to be issued to Buyer a title policy in the amount of
the Purchase Price in accordance with the Title Response (the "Title Policy").
Buyer shall pay all costs incurred in obtaining the Title Documents, the Title
Policy and the Survey (as defined below).

3.2          
Buyer's
Default. If the
Seller shall be ready, willing and able to deliver title to the Property to the
Buyer in accordance with the terms of this Agreement and shall otherwise comply
with the provisions hereof, and the Buyer shall default in its obligation to
purchase the Property and pay the Purchase Price by the Scheduled Closing Date
as provided in this Agreement and such default continues uncured for
five (5) days after written notice is given to Buyer of the specific
default, then the Seller shall, as its sole remedy, be entitled by notice to the
Buyer and the Escrow Agent to terminate this Agreement and cause the Escrow
Agent to deliver the Deposit to the Seller and the Seller shall retain the
Deposit as liquidated and agreed damages, it being agreed that it is difficult
to ascertain actual damages in the event of a default and that the liquidated
damages set forth herein represent a fair and reasonable estimate of such
damages.

3.3          
Seller's
Default. If the
Buyer shall be ready, willing and able to purchase the Property in accordance
with the terms of this Agreement and shall otherwise comply with the provisions
hereof, and the Seller shall be unable to deliver title to the Property by the
Scheduled Closing Date as provided in this Agreement and such inability
continues uncured for five (5) days after written notice is given to Seller
of such specific inability, the Seller's sole obligation shall be to terminate
this Agreement by notice to the Buyer and the Escrow Agent and direct the Escrow
Agent to refund the Deposit to Buyer, together with all interest earned thereon,
and upon such refund, this Agreement shall wholly cease and terminate and
neither Party shall have any further claim against the other under or by reason
of this Agreement. Buyer agrees that Buyer shall not (and hereby waives any
right to) ever file or assert any lis pendens against
the Property nor commence or maintain any action against Seller for specific
performance under this Agreement nor for a declaratory judgment as to Buyer’s
rights under this Agreement.

6

	 	
      4.
	
      Closing
      Matters.

	 	
      4.1
	
      Closing.

(a)  Except as
may be provided elsewhere in this Agreement, the Closing Date shall be no later
than the Scheduled Closing Date. The Parties may mutually agree to close prior
to the Scheduled Closing Date.

(b)  The
Closing shall take place either at the offices of Cozen O’Connor, 1900 Market
Street, Philadelphia, PA 19103, or such other place as Buyer and Seller mutually
agree, at 10:00 A.M. on the Scheduled Closing Date.

4.2          
Buyer's
Deliveries. At the
Closing, the Buyer shall (a) cause
the Escrow Agent to deliver to the Seller the sum(s) set forth in Section 2.3,
(b) deliver
the documents required to be executed and delivered by Buyer under this
Agreement, and (c) deliver
the amount, if any, required of Buyer under Article 8 entitled "Proration" and
all other sums of money required to be paid by Buyer as of the Closing Date in
order to consummate the transactions contemplated by this Agreement or owed by
Buyer to Seller as of the Closing Date pursuant to any provision of this
Agreement.

4.3          
Certain
Seller Deliveries. At the
Closing, Seller shall deliver to the Buyer all of the documents required to be
delivered by the Seller pursuant to the terms of this Agreement, including the
following:

(a)  Seller's
Deed. Seller
shall deliver Seller's Deed conveying the Real Property to Buyer, executed and
acknowledged by Seller in recordable form. The Real Property to be acquired by
Buyer shall be acquired subject to the terms and provisions of this
Agreement.

(b)  Property
Documents. Seller
shall deliver the property documents described below, to the extent not
previously delivered (collectively "Property Documents"):

(i)  Assigned
Contracts. Copies
(or originals, if available) of all Assigned Contracts;

(ii)  Governmental
Permits. Copies
of all permits, licenses, and other governmental authorizations relating to the
Real Property or operation of the Hotel which are in the Seller's possession or
control and that are assignable and have been assigned to Buyer;

(iii)  Real
Estate Tax Bills. All
current real estate and personal property tax bills with respect to the Property
in the Seller’s or MMI’s possession or under its direct control;

(iv)  Drawings/Plans. A copy
of the “As-Built” drawing or plans for the Hotel, to the extent such plans exist
and are in Seller’s or MMI’s possession or direct control;

(v)  Advance
Room Reservation. A
complete list of all advance room reservations, conferences or other similar
functions at the Hotel, as applicable, in reasonable detail so as to enable
Buyer to honor such reservations;

7

(vi)  Keys. All
keys respecting the Hotel;

(vii)  Books
and Records. All
non-privileged books, records, operating reports, and other operating files and
materials (“Operating Records”) relating to the operation of the Hotel, to the
extent such Operating Records exist and are in the Seller’s or MMI’s possession
or direct control, but excluding the Seller’s Records; and

(viii)  Guest
Registration Cards. All
guest registration cards, guest transcripts and guests histories for the Hotel,
to the extent such documents exist and are in the Seller’s or MMI’s possession
or direct control.

(c)  Certification A
certification from Seller confirming that, as of the Closing Date, the Seller’s
representations and warranties in Section 10.2 of this Agreement are true and
correct in all material respects.

(d)  Additional
Documents. All
other instruments or documents expressly required from Seller under this
Agreement or otherwise reasonably required by the Title Company in order to
insure title pursuant to Section 3.1; provided that in no event shall Seller be
required to deliver escrow deposits, escrow agreements or any indemnity
agreements hereunder unless the Seller otherwise agrees to do so.

4.4          FIRPTA
Affidavit. At the
Closing, Seller shall deliver a FIRPTA affidavit certifying that Seller is a
non-foreign person in the form of the affidavit attached hereto as Exhibit “D” and
incorporated herein.

4.5          
Advance
Deposits. At the
Closing, Seller shall turn over to Buyer all Advance Deposits pursuant to the
provisions of Section 7.4 of this Agreement.

4.6          
Buyer
Authority. On or
before the Closing Date, Buyer shall deliver to Seller (a) a
certificate of good standing from the Buyer’s jurisdiction of organization, and
(b) a
certified copy of resolutions evidencing Buyer's authority to consummate this
transaction, in form and substance reasonably satisfactory to Seller, and any
other evidence of Buyer's authority to consummate this transaction required by
the Title Company to issue the Title Policy.

4.7          
Assignment
of Agreements. At the
Closing, Buyer and Seller shall have executed and delivered, and Seller shall
have caused MMI to execute and deliver, an Assignment and Assumption Agreement
in the form attached hereto as Exhibit “E” (the
"Assignment Agreement"), pursuant to which Seller or MMI, as applicable, assigns
to the Buyer all of the interest of MMI with respect to the Hotel or Seller, as
applicable, in, and the Buyer assumes all of the rights and obligations of MMI
with respect to the Hotel or Seller, as applicable, under, the Assigned
Contracts.

4.8          
Bill
of Sale. At the
Closing, Seller shall deliver to Buyer an executed Bill of Sale, in the form
attached hereto as Exhibit “F” ("Bill
of Sale"), conveying all of Seller's interest in the Personal
Property.

8

4.9          
Seller
Authority. On or
before the Closing Date, Seller shall deliver to Buyer (a) a certificate of good
standing from the Seller’s jurisdiction of organization and (b) a certified copy
of resolutions evidencing Seller’s authority to consummate this transaction, in
form and substance reasonably satisfactory to Buyer, and any other evidence of
Seller’s authority to consummate this transaction as reasonably required by the
Title Company to issue the Title Policy.

4.10         General
Quitclaim Agreement. At the
Closing, Buyer and Seller shall have executed and delivered, a General Quitclaim
Agreement in the form attached hereto as Exhibit
“G”
(“General Assignment”), pursuant to which Seller assigns to Buyer all
warranties, permits, approvals and certificates of occupancy relating to the
Property or the Hotel, if any, to the extent permitted by law or by the terms of
such items or documents. 

	 	
      5.
	
      Certain
      Conditions.

	 	
      5.1
	
      Inspection
      of Property.

(a)  After the
execution of this Agreement by the Parties, but prior to the expiration of the
Due Diligence Period, Buyer shall have the right, at its sole cost and expense,
to obtain a Phase I Environmental Report (the "Environmental Report") for the
Property and shall have the right, at its sole cost and expense, to obtain a
survey of the Real Property (the “Survey”). However, the Buyer shall not conduct
or permit any invasive testing (including any Phase II investigations) to be
conducted at the Property without the Seller’s prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed.

(b)  Other
than as disclosed in any environmental reports provided to Buyer by Seller,
if a
defect is revealed on the Survey and/or in the Environmental Report which (i)
materially and adversely impairs the Buyer’s use of the Property as the Hotel is
currently operated or (ii) constitutes a material violation of applicable
environmental laws and (iii) that would require (in the case of (ii), a
remediation required by an applicable governmental authority involving) the
expenditure of more than $25,000 to remedy such defect (a “Material Defect”),
Buyer shall, by no later than the earlier of (x) the expiration of the Due
Diligence Period and (y) the 10th day after the date the Buyer shall have
received the respective Survey or Environmental Report, notify Seller in writing
of any Material Defect revealed by such Survey or Environmental Report and
include a detailed description of such Material Defect. Seller shall notify
Buyer in writing within ten (10) days after any receipt of such notice from
Buyer of a Material Defect whether Seller will undertake to cure, remove or
remedy each such Material Defect ("Material Defect Response"). Within five (5)
days of receipt of the Material Defect Response, Buyer shall have the right, at
its option, to (i) terminate this Agreement by giving written notice to Seller
to such effect, or (i) accept in a written notice to Seller the undertakings of
Seller contained in such Material Defect Response. If Buyer does not give
written notice to Seller of a Material Defect on or before the end of the Due
Diligence Period or, if notice of a Material Defect is given, and the Buyer does
not give written notice to Seller within such five (5) day period after receipt
of a Material Defect Response, then Buyer shall be conclusively deemed to have
accepted any defects that are or might have been reflected in the Survey and any
defects relating to the environmental condition of the Property and to have
waived any rights to terminate this Agreement pursuant to this Section 5.1 (b),
and the parties shall proceed to consummate the transaction as herein
provided.

9

(c)  During
the period from the date of this Agreement to the Closing Date, Seller will,
during ordinary business hours and with at least twenty-four (24) hours
prior notice to Seller before each and every entry onto the Property by Buyer or
its agents, give Buyer and its representatives reasonable access to the Property
and to all books and records of Seller relating to the operation of the Hotel
and furnish Buyer with such financial data and other information in Seller’s
possession concerning the Seller and its operation of the Hotel, as Buyer may
from time to time reasonably request. During any entry by Buyer or its agents
onto the Property, Buyer shall minimize any disturbance to Seller’s employees,
guests and business operations. None of the information obtained pursuant to
this Section 5.1(c) shall give the Buyer the right to terminate this
Agreement except as otherwise specifically provided in Section 5.1(b). In
connection with any entry by Buyer or its agents, employees, consultants or
representatives onto the Property to conduct any inspection, review or testing
(collectively, the “Inspections”), any such Inspections shall be subject to all
of the following:

(i)  All
inspections, reports, surveys and studies (the “Inspection Documents”) shall be
performed at Buyer’s sole cost and expense; provided, however, that Buyer shall
promptly cause a copy of all relevant Inspection Documents to be delivered to
Seller (x) simultaneously with Buyer giving notice of a Title Objection pursuant
to Section 3.1(b) or a Material Defect pursuant to Section 5.1(b) or (y)
simultaneously with a claim for indemnification pursuant to Section
5.5(b)(iii).

(ii)  Buyer
and/or its contractors and agents shall maintain liability insurance coverage
for its employees, agents and representatives inspecting the Property or
conducting testing in an amount not less than One Million Dollars
($1,000,000.00) per occurrence and workmen’s compensation insurance coverage as
required by law, and prior to entering onto the Property provide Seller with a
certificate evidencing same (or the renewal thereof), which shall name Seller as
an additional insured.

(iii)  Buyer
agrees to keep the Property free and clear of any liens, which may arise as a
result of any such Inspections, which covenant shall survive Closing or any
termination of this Agreement.

(iv)  Buyer
shall restore promptly any physical damage caused by the Inspections to
substantially the condition which existed prior to the Inspections, which
covenant shall survive Closing or any termination of this
Agreement.

(v)  Buyer
hereby agrees to indemnify, defend and hold Seller and its employees, agents and
representatives harmless from and against all loss, cost, liability, lien,
damage, expense (including reasonable attorney’s fees and costs), injury,
claims, causes of action, which are sustained, suffered or incurred against or
by Seller, its agents, employees or representatives caused by Buyer or its
agents in connection with any Inspections. This indemnity shall survive Closing
or any termination of this Agreement.

10

(d)  Without
limiting the provisions in Section 5.1, during the Due Diligence Period, Seller
shall provide Buyer with copies of its existing “as-built” ATLA survey, its
vesting deed to the Property, its existing owners title policy and any existing
Phase-I or Phase-II environmental reports; provided that the same exist and are
in Seller’s or MMI’s possession or direct control.

	 	
      5.2
	
      Purchase
      As-Is.

(a)  Except as
provided in Section 10.2, Buyer is relying, and will rely, solely upon its
own inspections, investigations and analyses of the Property and Hotel in
entering into this Agreement and is not relying in any way upon any
representations, statements, agreements, warranties, studies, reports,
descriptions, guidelines or other information or material furnished by Seller or
its representatives, whether oral or written, express or implied, of any nature
whatsoever regarding any such matters, including without limitation, any
marketing materials, and is purchasing the Property in an "as-is"
condition.

(b)  EXCEPT AS
EXPRESSLY SET FORTH IN SECTION 10.2 SELLER HEREBY SPECIFICALLY DISCLAIMS ANY
WARRANTY, GUARANTY OR REPRESENTATION, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE,
OF, AS TO, OR CONCERNING THE NATURE AND CONDITION OF THE PROPERTY INCLUDING,
WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY, AND THE SUITABILITY THEREOF AND
OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH THE BUYER MAY ELECT TO
CONDUCT THEREON, AND THE EXISTENCE OF ANY ENVIRONMENTAL HAZARDS OR CONDITIONS
THEREON OR COMPLIANCE WITH ENVIRONMENTAL LAWS, ZONING LAWS, LAND USE LAWS,
RULES, REGULATIONS, ORDERS OR REQUIREMENTS. BUYER ACKNOWLEDGES THAT IT HAS
INSPECTED THE PROPERTY AND BUYER IS RELYING SOLELY ON ITS OWN INVESTIGATION OF
THE PROPERTY AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER.
BUYER EXPRESSLY ACKNOWLEDGES THAT, IN CONSIDERATION OF THE AGREEMENTS OF SELLER
HEREIN, EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN SECTION 10.2, SELLER
MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED OR ARISING BY OPERATION
OF LAW, INCLUDING BUT NOT LIMITED TO, ANY WARRANTY OF CONDITION, HABITABILITY,
MERCHANTABILITY, TENANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, IN RESPECT
OF THE PROPERTY.

(c)  Buyer,
for itself and its successors and assigns, hereby releases Seller, Seller’s
affiliates and their respective officers, directors, shareholders, employees and
agents of, from and against any and all claims, losses or damages arising from
the foregoing.

(d)  Except as
provided in Section 10.2, Seller makes no warranties or representations to
Buyer, either express or implied, regarding the assignability or transferability
of the Assigned Contracts.

11

(e)  Buyer is
represented by very capable and experienced people and has had the opportunity
to review the Property prior to the Effective Date. Buyer will rely entirely
upon such review and the advice of Buyer's consultants in Buyer's determination
to purchase the Property. Buyer, by its execution of this Agreement,
acknowledges and agrees that a material inducement to Seller's decision to sell
the Property to Buyer at the Purchase Price provided in this Agreement was the
agreement of Buyer to conduct Buyer's own studies and purchase the Property in
an "as-is" condition, except as expressly provided in
Section 10.2.

(f)  Except as
may be specifically provided herein, Seller shall have no obligation to correct
any conditions or alleged defects or deficiencies discovered by Buyer in the
course of Buyer's investigations or inspections with respect to the Property or
thereafter.

	 	
      5.3
	
      Non-Disclosure
      of Confidential Information.

(a)  Any
information furnished by Seller or its agents to Buyer or Buyer's agents in
connection with the transaction contemplated hereby shall be governed by that
letter agreement dated October 1, 2004 between Bradford Holdings, Inc. and
Buyer (the “Confidentiality Agreement”). The failure of Buyer to comply with its
obligations under the Confidentiality Agreement or this Section 5.3 shall
constitute a material breach of this Agreement and, in such case, the Seller
shall be entitled to terminate this Agreement (and be paid the Deposit) and
pursue any remedy at law or equity against the Buyer, including injunctive
relief provided for in the Confidentiality Agreement.

(b)  Notwithstanding
anything to the contrary set forth in this Agreement or the Confidentiality
Agreement, nothing contained herein shall limit the right of the Buyer to report
any information relating to this transaction required to be reported to any
governmental entity, in connection with tax reporting information filed by the
Buyer with the governmental entity or as may be required by any other
governmental regulatory entity. Provided, however, Buyer agrees that in
connection with any and all such required reporting (i) Buyer
shall not, and shall cause its ultimate parent not to, disclose the name of any
principal or shareholder of Seller’s parent; (ii) Buyer
may disclose, and may cause its ultimate parent to, disclose the name of the
Seller in any filing with the Securities and Exchange Commission and any stock
exchange if the identity of the Seller is required to be disclosed by applicable
regulations, but shall not disclose the name of the Seller in any press release
with respect to the transaction (but may identify the Seller in any press
release as a Holiday Inn Express franchisee); (iii) Buyer
shall not, and shall cause its ultimate parent not to, file a copy of this
Agreement with any governmental authority until the filing of its Form 10-Q
covering the period during which this Agreement is signed; and (iv) Buyer
shall not, and shall cause its ultimate parent not to, make a filing with any
governmental authority or issue any press release concerning the execution of
the Agreement until the fourth business day after execution by both parties of
this Agreement, unless Seller agrees otherwise. Seller shall have the right to
review and approve in advance any such filings to confirm compliance with this
Section 5.3.

5.4          
Maintenance
of the Hotel. Seller
shall maintain the Hotel in substantially the same condition that Seller
maintained the Hotel before and as of the Effective Date, normal wear and tear
excepted, up to the Closing. Seller shall not enter into any new agreements with
respect to the Hotel (except for agreements and contracts entered in the normal
course of operating the Hotel and cancellable on thirty (30) days' notice),
without the prior written consent of Buyer, which consent shall not be
unreasonably withheld or delayed. The failure of Buyer to deliver written notice
of approval or disapproval of any such proposed agreement within three (3)
Business Days of delivery of such agreement(s) to Buyer shall be deemed to be
Buyer's approval thereof.

12

	 	
      5.5
	
      Indemnity.

(a)  Buyer
hereby agrees to indemnify, defend and hold Seller, its affiliates and their
respective officers, directors, shareholders, employees and agents
(collectively, “Seller Indemnitees”) harmless from and against any and all
claims, actions, causes of action, costs, expenses (including reasonable
attorneys' fees and costs), damages and liabilities (collectively, “Losses”)
relating to or arising out of (i) Buyer's
operation of the Hotel or use of the Property following the Closing Time;
(ii) Buyer’s
failure duly to perform its obligations under this Agreement or any other
agreement executed by Buyer pursuant to this Agreement; and (iii) Buyer’s breach
of any of its representations or warranties contained in Section 10.1 of this
Agreement. Notwithstanding the foregoing, Buyer shall not be responsible for
payment of Seller's attorney's fees in any particular third party action or
proceeding following the time that Buyer tenders a defense of Seller in such
action or proceeding, with counsel reasonably acceptable to Seller. The
indemnification obligations contained in Section 5.5(a)(i) and (ii) shall
survive the Closing or the earlier termination of this Agreement. The
indemnification obligations contained in Section 5.5(a)(iii) shall survive for
six (6) months after the Closing Date.

(b)  Seller
hereby agrees to indemnify, defend and hold Buyer, its affiliates and their
respective officers, directors, shareholders, employees and agents
(collectively, “Buyer Indemnitees”) harmless from and against any and all Losses
relating to or arising out of (i) Seller's
operation of the Hotel or use of the Property prior to the Closing Time;
(ii) Seller’s
failure duly to perform its obligations under this Agreement or any other
agreement executed by Seller pursuant to this Agreement; and (iii) Seller’s
breach of any of its representations or warranties contained in Section 10.2 of
this Agreement. Notwithstanding the foregoing, Seller shall not be responsible
for payment of Buyer's attorney's fees in any particular third party action or
proceeding following the time that Seller tenders a defense of Buyer in such
action or proceeding, with counsel reasonably acceptable to Buyer. The
indemnification obligations contained in Section 5.5(b)(i) and (ii) shall
survive the Closing or the earlier termination of this Agreement. The
indemnification obligations contained in Section 5.5(b)(iii) shall survive for
six (6) months after the Closing Date. 

(c)  In the
event Buyer assigns its rights under this Agreement in accordance with
Section 9.1 and such assignee takes title to the Property, such assignee
shall also be responsible for Buyer’s obligations under this
Section 5.5.

(d)  Seller
shall not have any obligation to indemnify the Buyer Indemnitees for claims
under Section 5.5 (b)(iii) until the Losses of the Buyer Indemnitees with
respect to such claims shall exceed $50,000 in the aggregate (the “Threshold”),
following which the total amount of such Losses in excess of the Threshold shall
be recoverable by the Buyer Indemnitees in accordance with the terms hereof,
subject to the provisions of this Section 5.5 (d). In no event shall the total
obligation of Seller under the indemnification provided in Section 5.5(b)(iii)
exceed an amount equal to (x) $500,000 less (y) the amount of any
indemnification paid to Buyer Indemnitees by Seller pursuant to Section
5.5(b)(iii) of this Agreement, less (z) the amount of any indemnification paid
to Buyer Indemnitees (as defined in each such agreement) by affiliates of the
Seller pursuant to the Purchase and Sale Agreements between Buyer and each of
McIntosh Inn of King of Prussia, Inc., McIntosh Inn of Malvern, Inc. and
McIntosh Inn of Wilmington, Inc. Unless the person seeking indemnity pursuant to
Section 5.5 (a)(iii) or Section 5.5(b)(iii) provided the Seller or Buyer,
as applicable, with proper written notice of a request for indemnification and
describing the claim or event for which indemnification is sought pursuant to
such section during the sixth month period after the Closing Date, the person
seeking indemnification pursuant to those sections shall not be entitled to
obtain any indemnification pursuant thereto.

13

 

5.6          
Return
of Documents. If this
Agreement fails to close for any reason (other than Seller's willful default),
then all Property Documents, Confidential Information and any other information
delivered by Seller or its agents to Buyer shall be returned to Seller within
five (5) Business Days of the termination of this Agreement. The covenants
contained herein shall survive the termination of this Agreement.

5.7          
Sales
and Use Taxes. Seller
shall be responsible for the payment of all hotel, sales and/or use taxes or
income or personal property taxes incurred or related to periods prior to the
Closing Time and Buyer shall be responsible for the payment of all hotel, sales
and/or use taxes or income or personal property taxes incurred at and subsequent
to the Closing Time; provided, however, that Buyer shall be responsible for the
payment of any and all sales taxes which may be due and payable as a result of
the sale of the Personal Property to Buyer pursuant to the terms of this
Agreement. The covenants contained herein shall survive the Closing of this
Agreement.

5.8          
Existing
Financing. At
Closing, Seller shall pay off all existing financing created by Seller which
constitutes a lien on the Property, and shall bear all costs and expenses
associated therewith, including, but not limited to, the recording costs for
releases of any deeds of trust, mortgages or other financing documents in
connection therewith.

5.9          
Existing
Hotel Management Agreement. At
Closing, Seller shall terminate, at its sole cost and expense, the existing
Management Agreement between Seller and MMI. In the event such agreement cannot
be terminated, this Agreement shall terminate and Buyer shall receive a full
refund of the Deposit with interest thereon.

	 	
      6.
	
      Post-Closing
      Obligations.

	 	
      6.1
	
      Accounts
      Receivable.

(a)  Pre-Closing
and Post-Closing Receivables. All
Pre-Closing Receivables shall belong to Seller and nothing contained in this
Agreement is intended to transfer any right, title or interest in such
Pre-Closing Receivables to Buyer. Following the Closing, Seller shall have the
right to collect all Pre-Closing Receivables. During the Wind-Up Period, Buyer
shall cooperate with Seller so that Seller can collect its Pre-Closing
Receivables. Any Pre-Closing Receivables which are not collected by Seller
during such Wind-Up Period shall be collected by Seller upon the expiration of
the Wind-Up Period and Buyer shall execute any documents necessary to assist
Seller in such collection.

(b)  Application
of Receivables. Any
collections received by Buyer with respect to Pre-Closing Receivables shall be
paid over to Seller within five (5) days of receipt without offset or
deduction unless the payor of such monies is obligated on both Pre-Closing
Receivables and Post-Closing Receivables and the payor has independently and
specifically identified such payment as one which should be applied to
Post-Closing Receivables. Except in the event of a bona fide dispute between
Seller and a customer which dispute has been documented in a writing, or tenants
who are in arrears for more than one (1) month, any collections received from
parties obligated on both Pre-Closing Receivables and Post-Closing Receivables
shall be applied first to the longest outstanding unpaid invoices of the payor.
In the case of monies received from parties obligated on both Pre-Closing
Receivables and Post-Closing Receivables and where the amount attributable to
Pre-Closing Receivables is the subject of a bona fide dispute with customer or
in the case of arrearages from tenants, is in arrears in excess of one month
(the "Disputed Items"), Buyer will not be obligated to pay the first monies it
receives to Seller, but Seller shall directly deal with the applicable third
party in connection with the collection of the Disputed Items.

14

(c)  Seller's
Right to Examine and Photocopy Books and Records. After
the Closing, Seller and its agents and employees shall have the right to examine
and photocopy Buyer's records with respect to collection of Pre-Closing
Receivables and with respect to guests or other persons obligated on both
Pre-Closing Receivables and Post-Closing Receivables, all at reasonable times
and upon reasonable notice.

(d)  Office
Space.
Following the Closing, Buyer shall provide to Seller, during the Wind-Up Period,
and from time to time thereafter as Seller may require for an audit or other
accounting procedure, a desk at the Hotel, mutually acceptable to Seller and
Buyer, for Seller and Seller's agents to use in connection with its collection
of its Pre-Closing Receivables, its payroll and accounts payable obligations and
any other auditing procedures deemed necessary by Seller. 

6.2          
Seller's
Records. Seller
shall be entitled to access to the Hotel during the Wind-Up Period to remove
from the Hotel originals, or at Seller's election, copies of all of Seller's
Records with respect to the periods prior to the Closing, without the prior
consent of Buyer. If the Seller takes originals, it will provide copies thereof
to the Buyer.

	 	
      6.3
	
      Other
      Post-Closing Business Arrangements.

(a)  Bank
and Other Accounts. Upon
Closing, Buyer shall open new bank accounts, credit card accounts and any other
financial accounts necessary for the continued operation of the Hotel by Buyer.
Buyer agrees that it will not use any credit card, bank accounts or other
financial accounts of Seller.

(b)  Issuance
of Documents. Buyer
shall prepare all documents required to be issued with respect to the operation
of the Hotel from and after the Closing Time by the Internal Revenue Service or
any other applicable governmental agency, including, but not limited to, W-2
forms and 1099 forms.

	 	
      (c)
	
      Employees.

(i)  Buyer
shall offer to hire at least seventy-five percent (75%) of Seller’s active
Employees at the Hotel. Buyer shall deliver prior to the expiration of the Due
Diligence Period a written list of all of Seller’s Employees to be offered
employment by Buyer after Closing (“Rehired Employees”).

(ii)  Payment
of Employees. Seller
shall pay all wages, salaries and benefits (including accrued vacation and sick
pay) and any termination obligations accrued up to the Closing Time for the
Rehired Employees who accept employment with the Buyer.

15

 

(iii)  Notice
to Employees. Seller
and Buyer shall prepare a joint statement to be distributed to employees at the
Hotel upon the Closing, which statement shall include (i) a notice that the
Hotel is, as of the Closing Time, owned by Buyer and (ii) such other information
deemed reasonably necessary by both Seller and Buyer.

(d)          
Further
Assurances by Parties.
Following the Closing, both Parties shall execute and deliver any further
instruments and take all actions that may be necessary or appropriate to confirm
that all of the rights and privileges contemplated herein have been transferred
to Buyer.

(e)          
Post-Closing
Cooperation Obligations. Buyer
covenants and agrees that it will, subsequent to the Closing, reasonably
cooperate with Seller in order for Seller to complete its Post-Closing Business
Arrangements under this Article 6 and shall provide reasonable assistance to
Seller, including, without limitation, support, secretarial and clerical
assistance and access to all records at the Hotel to facilitate the preparation
of Seller's tax records and accounting records and to assist Seller with any
claims and/or to comply with any governmental reporting
requirements.

(f)          
Notices
to Vendors. In
addition to the statement to be prepared by Seller and Buyer pursuant to other
provisions of this Agreement, Seller and Buyer shall also prepare a statement
which shall be delivered, at or soon after the closing, to vendors, consultants
and any other parties deemed necessary by the parties to announce the transfer
of the Property to Buyer.

(g)          Post-Closing
Adjustment Period. In the
event Seller and Buyer fail to reach agreement on the prorations pursuant to the
provisions of Article 8 of this Agreement, Seller and Buyer shall meet, during
the sixty (60) day period following the Closing to resolve the dispute and make
such adjustments as may be necessary ("Post-Closing Adjustment Period"). In the
event the Parties are unable to resolve any dispute by the end of the
Post-Closing Adjustment Period, the Parties shall submit the dispute for
resolution by an independent accounting firm mutually agreeable to the Seller
and Buyer . The dispute shall be resolved in accordance with accounting industry
practices. The fee of such accounting firm shall be borne by the Parties
equally.

6.4          
Accounts
Payable. Seller
shall be responsible for payment of all accounts payable accruing prior to the
Closing Time.

6.5          
Performance
of Assigned Contracts. Buyer
shall perform and pay when due each of the obligations of the Seller arising
after the Closing Time pursuant to all of the Assigned Contracts.

6.6          
Seller’s
Financial Books and Records. For
six (6) months after the Closing Date, Seller shall give Buyer access, upon
reasonable advance notice, to its financial books and records covering the
three (3) year period prior to the Closing Date in order for the Buyer to
prepare, at Buyer’s sole cost and expense, audited financial statements for such
three-year period. Buyer shall reimburse Seller for its out-of-pocket expenses
in connection with providing such access or Buyer’s preparing such financial
statements.

16

6.7          
Survival
of Article 6. The
provisions of Article 6 shall survive the Closing or earlier termination of this
Agreement. 

	 	
      7.
	
      Closing
      Procedures.

7.1          
Guests. As of
12:01 p.m. of the Closing Date, all Hotel guests reflected on the Hotel
ledger (including direct bill guests), shall be checked out by Seller (who may
process the account charges for collection), and shall be re-checked in by Buyer
(from which time all such accounts shall be invoiced by and belong to Buyer).
The Seller shall be entitled to room rental for the night immediately preceding
and the morning of the Closing. Seller shall collect and pay all room and other
tax surcharges on all of the foregoing accounts checked out by Seller and for
all check outs occurring prior to the Closing.

7.2          
Guests'
Baggage/Safe Deposit Boxes. On the
Closing Date, authorized representatives of Buyer and Seller shall take
inventory of (i) all baggage, suitcases, luggage, valises and trunks of Hotel
guests checked or left in the care of Seller and all items designated as lost
and found held by Seller and (ii) all contents in the safe deposit boxes
maintained exclusively by the Hotel, but no such baggage, suitcases, luggage,
valises, trunks, items or safe deposit boxes shall be opened. All such baggage
and other items shall be sealed in a manner to be agreed upon by the Parties and
listed in an inventory thereof prepared and signed jointly by said
representatives of Buyer and Seller as of the Closing Date, and Buyer shall be
solely responsible thereafter for all items listed in such inventory and, where
the seals have been broken, for the contents thereof, and Buyer agrees to
indemnify, defend and hold Seller harmless from and against any and all Losses
in connection therewith. Seller shall be responsible for such contents if the
seals have not been broken, and will similarly indemnify Buyer
therefor.

7.3          
Cash
at Hotel. Buyer
shall pay to the Seller the amount of any cash on hand at the Hotel as of the
Closing Time and such cash shall become the property of the Buyer as of the
Closing. At the Closing, Seller's Employees shall count all cash in any cash
registers or any other location within the Hotel, and such amount shall be
verified jointly by Seller and Buyer.

7.4          
Advance
Deposits. The
parties acknowledge and agree that, at the Closing, Seller shall hold certain
amounts in cash or other forms of payment or security constituting advance
deposits for reservations for space at the Hotel subsequent to the Closing
("Advance Deposits"). The Advance Deposits which are held in cash ("Cash Advance
Deposits") shall be prorated at the Closing with Seller receiving from the
Advance Deposits any amounts or charges earned by Seller prior to the Closing
Date and Buyer receiving the balance.

7.5          
Utilities. Seller
shall use its reasonable best efforts to have all utilities, including water,
gas and electricity meters read by the appropriate utility companies no earlier
than three (3) Business Days prior to the Closing. To the extent that a utility
bill from any applicable utility company cannot be issued, Seller and Buyer
shall, within sixty (60) days after the Closing, prorate any amounts due and
payable for utilities (including without limitation for sewer charges). During
such sixty (60) day period, Seller and Buyer shall also prorate to the Closing
Time, as necessary, charges payable to the appropriate telephone
company.

17

	 	
      8.
	
      Prorations.

8.1          
Prorations. The
parties will prorate (i.e., apportion), in cash, to the Closing Time the
following:

(a)  Taxes. County,
city, municipality, and special district (if any) taxes and assessments of any
kind or nature for the Property, based on the latest information available. If
Closing occurs at a date when the current year's millage is not fixed and
current year's assessment is available, taxes will be prorated based upon such
assessment and the prior year's millage. If current year's assessment is not
available, then taxes will be prorated on the prior year's tax assessment. If
there are completed improvements on the Real Property by January 1st
of year
of Closing which improvements were not in existence on January 1st of the
prior year, then taxes shall be prorated based upon the prior year's millage and
at an equitable assessment to be agreed upon between the parties, failing which,
request will be made to the County Property Appraiser for an informal assessment
taking into consideration available exemptions. Any tax proration based on an
estimate shall, at request of either Buyer of Seller, be subsequently readjusted
upon receipt of the tax bill on condition that a statement to that effect is in
the closing statement;

(b)  Rents. Prepaid
rents based on Seller's and Buyer's written statement thereof;

(c)  Advance
Deposits. Advance
Deposits based on information to be provided by Seller;

(d)  Current
Bookings. Any
amounts due as a result of current bookings;

(e)  Security
Deposits. Any
amount held as security for any lease at the Property and any interest earned
thereon;

(f)  Utility
Deposits. If
assignable, any amounts retained by a utility company as a deposit credited to
Buyer;

(g)  Cash
on Hand. The
amount of cash on hand determined pursuant to Section 7.3 shall be credited to
the Seller;

(h)  Special
Assessments.
Certified, confirmed and ratified special assessment liens due and payable as of
the Closing Date are to be paid by Seller. Pending liens or installments not yet
due and payable as of the Closing Date shall be assumed by Buyer;
and

(i)  Other
Prorations. Any
other prorations referred to elsewhere in this Agreement and any other items
related to the operation of the Hotel and are expenditures which are consistent
with past Hotel practices.

	 	
      9.
	
      Assignment.

9.1          
Assignment
by Buyer. Buyer
may not assign or otherwise transfer any of its rights or obligations under this
Agreement without obtaining the prior written consent of Seller, which consent
shall not be unreasonably withheld. Notwithstanding the foregoing, Buyer may
assign its rights under this Agreement to an Affiliate of Buyer without first
obtaining Seller's consent. Notwithstanding any assignment pursuant to this
Section, in no event shall Buyer be released from any of the obligations under
this Agreement. Any assignment in violation of this section shall be null and
void.

18

9.2          Bankruptcy
of Buyer. Buyer
agrees that in the event all or substantially all of Buyer's assets are placed
in the hands of a receiver or trustee, and such receivership or trusteeship
continues for a period of thirty (30) days, or should Buyer make an assignment
for the benefit of creditors, become the subject of an order for relief under
the United States Bankruptcy Code, or should Buyer institute any proceedings
under the United States Bankruptcy Act or under any amendment thereof which may
hereafter be enacted or under any other act relating to the subject of
bankruptcy wherein Buyer seeks to be adjudicated a bankrupt, or to be discharged
of its debts, or to effect a plan of liquidation, composition or reorganization,
or should any involuntary proceeding be filed against Buyer under any such
bankruptcy laws and Buyer consents thereto or acquiesces therein by pleading or
default, or if such involuntary proceeding is not dismissed within sixty (60)
days, then this Agreement shall not become an asset in any of such proceedings,
and in any such event it shall be lawful for Seller to declare this Agreement
terminated, and Buyer shall have no further claim on the Property hereunder or
otherwise and Buyer shall have no right to the return of the Deposit or interest
thereon.

	 	
      10.
	
      Representations
      and Warranties.

10.1          Buyer’s
Representations and Warranties. The
Buyer represents and warrants to Seller as follows:

(a)  Buyer is
a limited partnership duly organized and validly existing in good standing under
the laws of the Commonwealth of Virginia and has full power and authority to
enter into and perform its obligations under this Agreement and the other
agreements executed in connection herewith and the transactions contemplated
hereby. The execution, delivery and performance by the Buyer of each of this
Agreement and the other agreements executed by it in connection herewith and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by all necessary partnership action of the Buyer, and all
necessary action by the general partner of Buyer. Each of this Agreement and the
other agreements executed by it in connection herewith has been duly and validly
executed and delivered by the Buyer and is valid and binding upon it and
enforceable against it in accordance with its terms, except as may be limited by
bankruptcy, reorganization, insolvency, moratorium or similar laws of general
application relating to or affecting the enforcement of creditors’ rights
generally and except that enforceability of its obligations hereunder is subject
to general principles of equity.

(b)  Neither
the execution nor the delivery of this Agreement by the Buyer, nor the
incurrence by the Buyer of the obligations herein set forth, nor the
consummation by the Buyer of the transactions herein contemplated nor compliance
by the Buyer with the terms of this Agreement will conflict with, or result in a
breach of any of the terms, conditions or provisions of, or constitute a default
under (i) the
certificate of limited partnership or the limited partnership agreement of
Buyer, (ii) any
bond, note or other evidence of indebtedness of any contract, indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which the Buyer is a party or by which any of the Buyer's properties may be
bound, or (iii) any law,
regulation, judgment, order, writ or decree of any court, governmental body or
administrative agency of any jurisdiction.

19

(c)  Buyer is
financially capable of completing the transactions contemplated by this
Agreement and this Agreement is not subject to any financing contingency
whatsoever.

(d)  Except as
set forth in Section 10.2, neither Seller nor any agent, attorney, employee or
representative of the Seller has made any representation whatsoever regarding
the subject matter of this sale, or any part thereof, including (without
limiting the generality of the foregoing) representations as to the physical
condition of the Improvements or the suitability thereof for any purpose; and
that Buyer, in executing, delivering and performing this Agreement, does not
rely upon any statement or information to whomever made or given, directly or
indirectly, verbally or in writing, by any individual, firm or corporation,
except as expressly provided in Section 10.2.

(e)  Neither
Buyer, nor any of its respective affiliates, nor any of its respective partners,
members, shareholders or other equity owners, and none of its respective
employees, officers, directors, representatives or agents is, nor through the
Closing Date, will become, a person or entity with whom United States persons or
entities are restricted from doing business under regulations of the Office of
Foreign Asset Control (“OFAC”) of the Department of the Treasury (including
those names on OFAC’s Specially Designated and Blocked Persons List) or under
any statute, executive order (including the September 23, 2001, Executive Order
Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten
to Commit, or Support Terrorism), or other governmental action and is not and
will not engage in any dealings or transactions or be otherwise associated with
such persons or entities.

The
representations and warranties in this Section 10.1 shall survive Closing Date
for a period of six (6) months.

10.2          Seller's
Representations and Warranties. The
Seller represents and warrants to the Buyer as follows, except as set forth in
Schedule 10.2:

(a)  Seller is
a corporation duly incorporated and validly existing in good standing under the
laws of the Commonwealth of Pennsylvania and has full power and authority to
enter into and perform its obligations under this Agreement and the other
agreements executed by it in connection herewith and the transactions
contemplated hereby. The execution, delivery and performance by the Seller of
each of this Agreement and the other agreements executed by it in connection
herewith and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary corporate action
of the Seller. Each of this Agreement and the other agreements executed by it in
connection herewith has been duly and validly executed and delivered by the
Seller and is valid and binding upon it and enforceable against it in accordance
with its terms, except as may be limited by bankruptcy, reorganization,
insolvency, moratorium or similar laws of general application relating to or
affecting the enforcement of creditors’ rights generally and except that
enforceability of its obligations hereunder is subject to general principles of
equity.

(b)  Neither
the execution nor the delivery of this Agreement by the Seller, nor the
incurrence by the Seller of the obligations herein set forth, nor the
consummation by the Seller of the transactions herein contemplated nor
compliance by the Seller with the terms of this Agreement will conflict with, or
result in a breach of any of the terms, conditions or provisions of, or
constitute a default under (i) the
articles of incorporation or bylaws of Seller; (ii) any
bond, note or other evidence of indebtedness of any contract, indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which the Seller is a party or by which any of the Seller's properties may be
bound, or (iii) any law,
regulation, judgment, order, writ or decree of any court, governmental body or
administrative agency of any jurisdiction.

20

(c)  At
Closing, there will be no mechanic's liens applicable to the Real Property and
Seller will provide either (x) an affidavit at Closing that no work has been
performed or material furnished and not paid for, for which a mechanic's lien
can be filed or (y) an amount to be deposited with the title company sufficient
to cover the cost thereof plus interest.

(d)  Except as
disclosed in any environmental reports provided to Buyer, (i) Seller has not
received any written notice of any material violation of any applicable then
existing federal or state environmental laws (“Applicable Laws”) which has not
been cured in accordance with Applicable Laws; and (ii) during Seller’s
ownership of the Real Property, to the best of Seller’s knowledge, Seller has
not used any portion of the Real Property for the purpose of storage,
generation, manufacture, disposal, transportation or treatment of any hazardous
substances in material violation of Applicable Laws.

(e)  The
Seller has not received written notice of (i) any pending or threatened
condemnation or eminent domain proceedings against the Real Property or (ii) any
change or proposed change in the route, grade or width of any public street or
road adjacent or connecting to the Real Property.

(f)  There is
no action, lawsuit or proceeding pending, or to the best of Seller’s knowledge,
threatened in writing against Seller or the Hotel (i) which is not covered by
insurance, (ii) which would impair in any material respect Buyer's ability to
purchase or operate the Hotel, or (iii) which seeks to restrain or prohibit the
transactions contemplated by this Agreement.

(g)  The
copies of the Assigned Contracts are true, correct and complete in all material
respects and there are no defaults by Seller and, to Seller’s knowledge, by any
other party under the Assigned Contracts.

(h)  Seller is
not subject to any bankruptcy filings or proceedings, and no other similar
insolvency event has occurred with respect to Seller.

(i)  Seller
has not entered into any contract or agreement with respect to the Property
which will be binding on Buyer after the Closing, except for the Assigned
Contracts and other agreements which are terminable upon not more than thirty
(30) days notice without payment of premium or penalty.

(j)  Seller is
not a “foreign person” or “foreign corporation” within the meaning of Section
1445 of the United States Revenue Code of 1986, and the regulations promulgated
thereunder.

(k)  Seller is
not a party to any union or collective bargaining agreement with respect to the
employees of the Seller. To the best of Seller’s knowledge, there are no
current, material labor disputes pending or threatened in writing with respect
to the operation of the Hotel 

(l)  To the
best of Seller’s knowledge, Seller possesses all material licenses, permits and
approvals of any governmental or quasi-governmental agency having jurisdiction
over the Property which are necessary or required for the ownership, use and
operation of the Property as a limited service hotel (“Authorizations”). Seller
has not received any written notice that any of the Authorizations have been
violated or are in default in any material respect which violations or defaults
have not been cured.

21

(m)  Seller
has not received written notice of any special assessments or taxes against the
Property which relate to any planned public improvements with respect to the
Property.

The
representations and warranties in this Section 10.2 shall survive the Closing
Date for a period of six (6) months. For purposes of this Agreement, the phrases
“to the Seller’s knowledge”, “ to the best of Seller’s knowledge”, and “Seller
has not received written notice” shall mean the actual knowledge, without
investigation or inquiry, concerning such matter of Thomas Scattaregia,
President of Seller; Terry O’Leary, Vice President of Seller; the President of
MMI; and Greg Riley, the District Manager with respect to the
Seller.

10.3         Commissions. Each of
the Seller and Buyer represents and warrants to the other that, other than the
commission payable by Seller to Hodges Ward Elliott, Inc. (the “Broker”), no
other brokerage commissions shall be due or payable on account of this
transaction arising out of the acts of such party. Each party shall indemnify,
defend and hold the other party harmless from and against any Losses incurred by
such other party as a result of such party’s breach of this representation.
Seller shall pay a commission to Broker pursuant to a separate written agreement
between Seller and Broker.

	 	
      11.
	
      Destruction
      or Damage and Condemnation.

11.1         Destruction
or Damage. In the
event of damage or destruction to all or any portion of the Real Property (a
“Casualty”) prior to the Closing, the following provisions shall
apply:

(a)  Seller
shall immediately notify Buyer thereof in writing (the “Casualty
Notice”).

(b)  If the
Property is the subject of a Casualty, Buyer shall have the right, at its sole
option, of terminating this Agreement (by written notice to Seller and Escrow
Agent given within ten (10) business days after receipt of the Casualty Notice
from Seller), unless (i) the cost of restoration for the portion of the Property
which was damaged or destroyed as a result of the Casualty will not exceed Two
Hundred Fifty Thousand Dollars ($250,000.00), and (ii) the insurance company
issuing the insurance policy has confirmed in writing prior to the end of such
ten (10) business day period that such Casualty is covered by the policy, and
(iii) any loan commitment or term sheet which has been extended to Buyer is not
cancelled or suspended as a result of such Casualty. If a Casualty Notice is
given to Buyer less than ten (10) business days prior to Closing, at Buyer’s
option, Closing shall be postponed to a date not earlier than ten (10)
business days after Buyer’s receipt of the Casualty Notice.

(c)  If Buyer
does not terminate, or is not entitled to terminate, this Agreement, the
proceeds of any insurance with respect to the Property paid between the date of
this Agreement and the Closing Date, together with an amount equal to Seller’s
deductible under the policy, shall be paid to Buyer at the time of Closing and
all unpaid claims and rights in connection with losses to the Property shall be
assigned to Buyer at Closing without in any manner affecting the Purchase
Price.

22

11.2         Condemnation. If any
governmental taking is contemplated, pending or completed (hereinafter a
"condemnation") at or prior to Closing, for (i) twenty (20%) percent or more of
the Land or any portion of the Land which materially and adversely affects
access to or parking on the Land or (ii) any portion of any building located on
the Land, the following provision shall apply:

(a)  Seller
shall immediately notify Buyer thereof in writing.

(b)  Buyer
shall have the option to: (i) terminate this Agreement and receive a refund of
the Deposit, in which event neither party shall have any further right,
obligation or liability under this Agreement to or against the other and this
Agreement shall be of no further force or effect (except for any restoration or
indemnity obligations which expressly survive any termination) or (ii) continue
this Agreement in accordance with subsection (c) of this Section 11.2. Said
option shall be exercised by written notice of election to Seller within
thirty (30) days after Buyer's receipt of written notice from Seller of the
condemnation proceeding (including a description of the portion of the Real
Property subject to said condemnation proceeding). If no such election is given
by Buyer within said thirty (30) days, then this Agreement shall continue in
accordance with subsection (c) of this Section 11.2.

(c)  If the
condemnation proceedings are for less than the portion of the Real Property
described above, or if Buyer does not terminate this Agreement under subsection
(b) above, then the Closing shall be held as otherwise herein provided, and the
Buyer shall take title to the Land and Improvements subject to the condemnation
proceedings. In such event, all condemnation awards made prior to or after the
date of Closing shall belong to Buyer and Seller shall pay over the proceeds
received at Closing and execute any documents needed to effect the assignment to
Buyer of all of Seller's right, title and interest in or to any such
awards.

	 	
      12.
	
      Franchise
      Matters.

12.1        Buyer
acknowledges that the Hotel is subject to the Franchise License. Buyer shall
apply to the licensor under the Franchise License (“Licensor”) within five (5)
business days after the Effective Date for a new license agreement (“New
License”) to replace the Seller’s Franchise License for the Property, Seller
shall consent to such application to the extent required by the Franchise
License. Buyer shall provide all information requested by the Licensor in
connection with such application for the New License and shall use its best
efforts to diligently and promptly obtain approval from Licensor of such
application for the New License at the Property. It is a condition precedent to
the Closing that such application for the New License be approved by Licensor by
the Scheduled Closing Date and that any guarantees in connection with the
Seller’s Franchise License by any affiliate of the Seller be terminated in
writing by Licensor. If the New License or guaranty termination is not obtained
by the Scheduled Closing Date, either Buyer or Seller may give written notice to
the other party to extend the Scheduled Closing Date by thirty (30) days. If the
New License or guaranty termination is not obtained by the end of such thirty
(30) day period, either Buyer or Seller may terminate this Agreement by written
notice to the other party and the Buyer shall be entitled to receive the Deposit
plus interest from the Escrow Agent. Buyer specifically agrees that any
conditions to approval of the New License imposed by Licensor, including without
limitation, upgrade requirements, any property improvement plans, term of the
new license agreement and fees required to be paid, shall be Buyer’s sole
responsibility and shall not in any way affect Buyer’s obligation to complete
the transaction contemplated by this Agreement. Notwithstanding the foregoing,
Seller shall be responsible for all costs and fees imposed by Licensor on the
Seller to terminate the Seller’s Franchise License.

23

 

	 	
      13.
	
      Miscellaneous

13.1         
Entire
Agreement. This
Agreement constitutes the entire agreement of the parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous agreements
and understandings, both written and oral, between the parties with respect
thereto.

13.2         
Notice. All
notices, demands, requests, consents, approvals and other communications
required or permitted hereunder must be in writing and will be effective (a)
when delivered, if delivered by hand (with written confirmation of receipt), (b)
the next Business Day, if sent by nationally recognized overnight delivery
specifying next day delivery, or (c) three (3) Business Days after depositing in
the United States mails, if sent by certified mail, postage prepaid, return
receipt requested, addressed to a party’s address set forth below or to such
other address as any party may give to the other in writing for such
purpose.

	
      If
      to Seller:
	
      McIntosh
      Inn of Oxford Valley, Inc.

	 	
      c/o
      Cozen O’Connor

	 	
      1900
      Market Street

	 	
      Philadelphia,
      PA 19103

	 	
      Attention:
      Larry P. Laubach, Esquire

	 	 
	
      If
      to the Buyer:
	
      Hersha
      Hospitality Limited Partnership

	 	
      148
      Sheraton Drive

	 	
      New
      Cumberland, PA 17070

	 	
      Attention:
      Neil H. Shah

	 	 
	
      With
      a copy to:
	
      Shah
      & Byler, LLP

	 	
      510
      Walnut Street, 9th
      Floor

	 	
      Philadelphia,
      PA 19106

	 	
      Attention:
      Lok Mohapatra, Esquire

13.3        
Time. Seller
and Buyer agree that all times and periods for performance set forth herein
shall be of the essence.

13.4        
No
Recording; Tender. Buyer
covenants and agrees that it shall not record this Agreement or any memorandum
of this Agreement. Tender of the executed Seller’s Deed or of the Purchase Price
is hereby waived.

13.5        
Interpretation. This
Agreement shall be interpreted without regard to any presumption or other rule
requiring construction against the party which drafted this Agreement. Words of
the masculine gender shall mean and include correlative words of the feminine
and neuter genders and words imparting the singular number shall mean and
include the plural number and vice versa.

24

13.6        
No
Waiver. No
course of dealing between Buyer and Seller and no failure to exercise or delay
in exercising on the part of either party any right, power or privilege under
the terms of this Agreement shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or
thereunder preclude any other or further exercise. The rights and remedies
provided herein or in any other agreement are cumulative and not exclusive or in
derogation of any rights or remedies provided therein and thereof, by law or
otherwise.

13.7        
Illegality. The
provisions of this Agreement are independent of and separable from each other
and in case any one or more of the provisions contained in this Agreement should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.

13.8        
Amendments. No
amendment, supplement, modification or waiver of this Agreement shall be binding
unless executed in writing by both parties.

13.9        
Expenses. All
expenses incurred by or on behalf of the parties hereto in connection with this
Agreement, including, without limitation, all fees and expenses of agents,
financial advisors, counsel and accountants, shall be borne solely by the party
who has incurred the charge, and the other party hereto shall not have any
responsibility with respect thereto, whether or not the transactions
contemplated by this Agreement are consummated.

13.10     
Counterpart
Signatures. This
Agreement may be signed in any number of counterpart copies and by the parties
hereto on separate counterparts, but all such copies shall constitute one and
the same instrument. Delivery of an executed counterpart of a signature page to
this Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart. Any party so executing this Agreement by
facsimile transmission shall promptly deliver a manually executed counterpart,
provided that any failure to do so shall not affect the validity of the
counterpart executed by facsimile transmission.

13.11      Survival. Unless
otherwise specified herein, no covenant, condition, warranty and representation
set forth herein shall survive the Closing and delivery of the Seller’s Deed and
other documents contemplated hereby. The acceptance of the Seller’s Deed by
Buyer shall be deemed an acknowledgement by the Buyer that Seller has fully
complied with all of its obligations under this Agreement and shall be deemed to
have released Seller from any and all known and unknown claims that Buyer may
have by reason of any defect in title, except for the special warranty set forth
in the Seller’s Deed.

13.12     
Successors
and Assigns. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.

13.13     
Governing
Law. This
Agreement and all acts and transactions pursuant hereto and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
in accordance with the internal laws of the state in which the Land is located,
without giving effect to its principles of conflicts of law.

[SIGNATURES
ON FOLLOWING PAGE]

 

25

 

IN
WITNESS WHEREOF, this Agreement has been executed by the parties hereto,
intending to be legally bound hereby, as of the date set forth at the beginning
hereof.

	
      SELLER:
	 	 BUYER:
	 	 	 	 
	
      McINTOSH
      INN OF OXFORD VALLEY, INC.
	 	 HERSHA
      HOSPITALITY LIMITED PARTNERSHIP
	 	 	 	 
	 	 	
      By:
	
      Hersha
      Hospitality Trust, a Maryland business trust, its sole general
      partner

	 	 	 	 
	
      By:
	 	
      By:__________________________________

	
      Name:
      Jay H. Shah
	 	
      Name:
      Terence M. O’Leary

	
      Title:
      Vice President
	 	
      Title:
      President & COO

[JOINDER
BY ESCROW AGENT ON FOLLOWING PAGE.]

 

26

JOINDER
BY ESCROW AGENT

 

Hodges
Ward Elliott, Inc., the Escrow Agent named in this Purchase and Sale Agreement,
joins to evidence its agreement to hold the Deposit and otherwise perform its
obligations as Escrow Agent under the Purchase and Sale Agreement.

 

	 	
      ESCROW
      AGENT:

	 	 
	 	
      Hodges
      Ward Elliott, Inc.

	 	 
	 	 
	 	
      By:___________________________________

	 	
      Name:

	 	
      Title:

	 	 

27

 

EXHIBIT
“A”

 

Legal
Description

 

ALL THAT
CERTAIN tract, piece or parcel of land situate in the Township of Falls, County
of Bucks, Commonwealth of Pennsylvania, according to plan by Pickering, Corts
& Summerson, Inc., Consulting Engineers & Land Surveyors, Newtown, PA
being dated September 1, 1987 and revised November 13, 1989 as follows to
wit;

BEGINNING
at an iron pin set for a corner, said pin being the intersection of the
southerly right-of-way line of Cabot Boulevard West (Oxford Valley Road,
Connection No. 2), 160' wide, and the westerly right-of-way line of Relocated
Oxford Valley Road, S.R. 2029, 300' wide;

THENCE,
along the aforementioned westerly right-of-way line of Relocated Oxford Valley
Road, the following two courses and distances;

	 	
      D.
	
      on
      a curve having a radius of 3124.17' and an arc length 141.56', being
      subtended by a chord bearing of S. 29° 27', 55" W. and chord of 141.55' to
      an iron pin set for a point of tangency;

	 	
      E.
	
      S.
      30° 45' 48" W. a distance of 58.48' to a concrete monument found for a
      corner;

THENCE,
along the northerly line of lands of now or former Flynn/Congen Properties,
Inc., Tax Map Parcel 13-3-9-1, the following two courses and
distances;

	 	
      A.
	
      S.
      85° 16' 55" W. a distance of 170.39' to a rail monument found for a
      corner;

	 	
      B.
	
      N.
      7° 31' 47" W. a distance of 174.64' to a stone monument found for a
      corner;

THENCE,
along the easterly line of lands of now or former Kevin D. Flynn, Tax Map Parcel
13-3-3, N. 7° 31' 47" W. a distance of 354.69' to an iron pin found for a
corner; THENCE, along the southeasterly right-of-way line of Old Oxford Valley
Road, L.R. 09022, on a curve having a radius of 3800.00' and an arc length of
14.66', being subtended by a chord bearing of N. 55° 01' 08" E. and chord of
14.66' to an iron pin set for a corner.

THENCE,
along the aforementioned southerly right-of-way line of Cabot Boulevard West,
the following two courses and distances;

	 	
      C.
	
      S.
      32° 39' 21" E. a distance of 91.00' to an iron pin set for a point of
      curvature;

	 	
      D.
	
      on
      a curve having a radius of 843.94' and an arc length of 390.04', being
      subtended by a chord bearing of S. 45° 53' 46" E. and chord of 386.58' of
      the point and place of beginning.

Contents
of the above described parcel being 1.9514 acres.

BEING the
same premises which Kevin D. Flynn, by Deed dated December 15, 1989 and recorded
on December 22, 1989 in the County of Bucks in Deed Book 130 page 28, conveyed
unto Mclntosh Inn of Oxford Valley, Inc., in fee.

 

28

 

EXHIBIT
“B”

 

Assigned
Contracts

 

29

 

EXHIBIT
“C”

 

Form
of Deed

 

30

EXHIBIT
“D”

 

Form
of FIRPTA Affidavit

 

31

 

EXHIBIT
“E”

 

Form
of Assignment and Assumption Agreement

 

32

 

EXHIBIT
“F”

 

Form
of Bill of Sale

 

33

EXHIBIT
“G”

 

General
Quitclaim Agreement

 

34

SCHEDULE
10.2

 

 

35Exhibit 10.5

Exhibit
10.5

Execution
Copy

 

AGREEMENT
FOR SALE AND PURCHASE OF HOTEL

COURTYARD
BY MARRIOTT, BROOKLINE, Massachusetts

By
and Between

WEBSTER
STREET HOTEL, LLC,

a
Delaware limited liability company

(“Seller”)

and

hersha
hospitality limited partnership,

a
Virginia limited partnership

(“Purchaser”)

AGREEMENT
FOR SALE AND PURCHASE OF HOTEL

Table
of Contents

	
      Article
	 
	 	 
	
      ARTICLE
      I
	 
	
      DEFINITIONS
      AND REFERENCES
	
      1

	
      1.01
      Definitions
	
      1

	
      1.02
      References
	
      7

	 	 
	
      ARTICLE
      II
	 
	
      SALE
      AND PURCHASE; “AS-IS,” “WHERE-IS” SALE
	
      8

	
      2.01
      Sale and Purchase
	
      8

	
      2.02
      As-is, Where-is
	
      8

	 	 
	
      ARTICLE
      III
	 
	
      PURCHASE
      PRICE
	
      11

	
      3.01
      Purchase Price
	
      11

	
      3.02
      Earnest Money Escrow Agreement
	
      11

	 	 
	
      ARTICLE
      IV
	 
	
      INSPECTION
      PERIOD
	
      12

	
      4.01
      Inspection Period
	
      12

	
      4.02
      Review and Inspection
	
      12

	
      4.03
      Testing
	
      12

	
      4.04
      Acceptance or Rejection
	
      13

	
      4.05
      Confidentiality
	
      13

	
      4.06
      Indemnification; Restoration; Insurance
	
      13

	
      4.07
      Title and Survey
	
      14

	
      4.08
      Equipment Leases
	
      15

	 	 
	
      ARTICLE
      V
	 
	
      REPRESENTATIONS
      AND WARRANTIES
	
      15

	
      5.01
      Representations and Warranties of Seller
	
      15

	
      5.02
      Representations and Warranties of
    Purchaser
	
      16

	
      5.03
      Duration of Representations and
Warranties
	
      18

	 	 
	
      ARTICLE
      VI
	 
	
      CLOSING
      AND CLOSING DELIVERIES
	
      18

	
      6.01
      Closing
	
      18

	
      6.02
      Escrow
	
      19

	
      6.03
      Seller’s Deliveries
	
      19

	
      6.04
      Purchaser’s Deliveries
	
      20

	
      6.05
      Expenses
	
      20

	
      6.06
      Concurrent Transactions
	
      21

	
      6.07
      Possession
	
      21

 

-
i -

 

	
      ARTICLE
      VII
	 
	
      ADJUSTMENTS
      AND PRORATIONS CLOSING STATEMENTS
	
      21

	
      7.01
      Adjustments and Prorations
	
      21

	
      7.02
      Payment
	
      22

	
      7.03
      Cash and Accounts
	
      22

	
      7.04
      Closing Statements
	
      23

	 	 
	
      ARTICLE
      VIII
	 
	
      CONDITIONS
      TO SELLER’S OBLIGATIONS
	
      23

	
      8.01
      Conditions
	
      24

	 	 
	
      ARTICLE
      IX
	 
	
      CONDITIONS
      TO PURCHASER’S OBLIGATIONS
	
      24

	
      9.01
      Conditions
	
      24

	 	 
	
      ARTICLE
      X
	 
	
      ACTIONS
      AND OPERATIONS PENDING CLOSING
	
      25

	
      10.01
      Actions and Operations Pending Closing
	
      25

	 	 
	
      ARTICLE
      XI
	 
	
      CASUALTIES
      AND TAKINGS
	
      25

	
      11.01
      Casualties
	
      25

	
      11.02
      Takings
	
      26

	 	 
	
      ARTICLE
      XII
	 
	
      EMPLOYEES
	
      27

	
      12.01
      Employees
	
      27

	
      12.02
      Indemnity
	
      27

	 	 
	
      ARTICLE
      XIII
	 
	
      NOTICES
	
      27

	
      13.01
      Notices
	
      27

	 	 
	
      ARTICLE
      XIV
	 
	
      ADDITIONAL
      COVENANTS
	
      28

	
      14.01
      Additional Covenants
	
      29

 

-
ii -

 

	
      ARTICLE
      XV
	 
	
      DEFAULTS
      AND REMEDIES
	
      31

	
      15.01
      Seller’s Remedies
	
      32

	
      15.02
      Purchaser’s Remedies
	
      32

	
      15.03
      Confidentiality
	
      32

	
      15.04
      Attorneys’ Fees
	
      33

	
      15.05
      No Reservation of Property
	
      33

 

-
iii -

 

	
      Exhibit
      A:
	
      Land

	
      Exhibit
      B:
	
      Excluded
      Assets

	
      Exhibit
      C:
	
      Permitted
      Exceptions

	
      Exhibit
      D:
	
      Pending
      or Threatened Litigation

	
      Exhibit
      E:
	
      Notices
      of Violation

	
      Exhibit
      F:
	
      Assignment
      and Assumption of Ground Lease and Improvements

	
      Exhibit
      G:
	
      Bill
      of Sale

	
      Exhibit
      H:
	
      Assignment
      and Assumption of Hotel Contracts, Bookings, Permits, and Miscellaneous
      Hotel Assets

	
      Exhibit
      I:
	
      Certification
      of Non-Foreign Status

 

-
iv -

AGREEMENT
FOR SALE AND PURCHASE OF HOTEL

THIS
AGREEMENT FOR SALE AND PURCHASE OF HOTEL
(“Agreement”), dated
as of May 4, 2005, is entered into by and between Webster Street Hotel, LLC, a
Delaware limited liability company (“Seller”), and
Hersha Hospitality Limited Partnership, a Virginia limited partnership
(“Purchaser”).

RECITALS:

A. Seller
is the leasehold owner of the Land, and Seller owns the Improvements on the
Land, commonly referred to as the Courtyard by Marriott, Brookline,
Massachusetts (the “Hotel”), the
Fixtures and Tangible Personal Property, Operating Equipment, Consumables, and
Miscellaneous Hotel Assets (as such terms are hereinafter defined).

B. Seller
desires to sell, and Purchaser desires to purchase, the Property (as hereinafter
defined) upon and subject to the terms and conditions hereinafter set
forth.

AGREEMENTS:

NOW,
THEREFORE, in
consideration of the representations, warranties, agreements, covenants, and
conditions contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Purchaser agree as follows:

ARTICLE
I

DEFINITIONS
AND REFERENCES

1.01
Definitions. As used
in this Agreement, the following terms shall have the meanings indicated
below:

 

Accountants:
Dworken,
Hillman, LaMorte & Sterczala, PC.

Account
Cash: The
balances of all cash and securities and other instruments held by Seller or by
Manager or for the benefit of Seller or the Property and deposited, held, or
contained in any account, bank, or vault, except for Cash-On-Hand.

Accounts
Receivable: All
accounts receivable with regard to the Hotel.

Additional
Earnest Money: Shall
have the meaning given to it in Section
6.01.

Affiliate: With
respect to a specific entity, any natural person or any firm, corporation,
partnership, association, trust, or other entity which, directly or indirectly,
controls or is under common control with the subject entity, and with respect to
any specific entity or person, any firm, corporation, partnership, association,
trust, or other entity which is controlled by the subject entity or person. For
purposes hereof, the term “control” shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of any such entity or the power to veto major policy decisions of any
such entity, whether through the ownership of voting securities, by contract, or
otherwise.

 

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Agreement:
This
Agreement for Sale and Purchase of Hotel, including the exhibits attached hereto
and made a part hereof.

Bookings:
Contracts for the use or occupancy of guest rooms and meeting and banquet
facilities or other facilities of the Hotel, including any off-site catering for
which a deposit has been received or for which a written proposal has been made
and accepted for any time after the Cut-Off Time.

Books
and Records: All of
Seller's right, title and interest in and to (a) all Space Lessee
correspondence, billing and other files, (b) all structural reviews,
environmental assessments or audits, architectural drawings and engineering,
geophysical, soils, seismic, geologic, environmental (including with respect to
the impact of materials used in the construction or renovation of the
Improvements) and architectural reports, studies and certificates pertaining to
the Property, and (c) all on-site accounting, tax, financial, and other
books and records relating to the use, maintenance, leasing and operation of the
Property but excluding Seller’s asset management (as opposed to property
management) records.

Business
Day: Shall
mean all days of the year except Saturdays, Sundays, and holidays recognized by
the Federal Reserve Bank of Boston. If any deadline provided in this Agreement
falls on a day other than a Business Day, such deadline shall be extended until
the first Business Day thereafter.

Cash-On-Hand: Any and
all till money and house banks, and all checks, travelers’ checks, and bank
drafts paid by guests of the Hotel and located at the Property, specifically
excluding, however, all Account Cash.

Closing:
The
consummation of the transaction contemplated by this Agreement.

Closing
Date: The date
which is fifteen (15) days after the expiration of the Inspection
Period.

Compensation: The
direct salaries and wages paid to, or accrued for the benefit of, any Employee,
incentive compensation, vacation pay, severance pay, employer’s contributions
under F.I.C.A., unemployment compensation, workmen’s compensation or other
employment taxes, payments under Employee Benefit Plans, or
benefits.

Consumables: All food
and beverages (alcoholic, to the extent transferable under applicable law, and
non-alcoholic); engineering, maintenance, and housekeeping supplies, including
soap, cleaning materials and matches; stationery and printing; and other
supplies of all kinds, in each case whether partially used, unused, or held in
reserve storage for future use in connection with the maintenance and operation
of the Hotel, which are on hand on the date of this Agreement, subject to such
depletion and restocking as shall occur and be made in the normal course of
business but in accordance with present standards, excluding, however, (i)
Operating Equipment and (ii) all items of personal property owned by Space
Lessees, Manager, guests, employees, or persons furnishing food or services to
the Hotel (other than Seller or any Affiliate of Seller, unless denominated as
an Excluded Asset under this Agreement).

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Cut-off
Time: 11:59
P.M. (Eastern Daylight Savings Time) on the date prior to the Closing
Date.

Documents:
All
plans, specifications, drawings, blueprints, surveys, environmental reports, and
other documents in Seller’s possession that relate to the Property.

Due
Diligence: Shall
have the meaning given to it in Section
4.01.

Earnest
Money: Shall
have the meaning given to it in Section
3.01(a).    

Employee(s):
All
persons employed by Manager, or an Affiliate of Manager pursuant to Management
Agreement or Employment Contracts or otherwise.

Employee
Benefit Plans: All
employee benefit plans, as that term is defined in ERISA, and each other
employee benefit plan or program to which Seller contributes on behalf of any of
the Employees.

Employment
Contract(s): Those
contracts and agreements, oral or written, with all or any of the executives,
staff, and employees of Manager, or an Affiliate of Manager for work in or in
connection with the Hotel including, but not limited to, individual employment
agreements, union agreements, employee handbooks, group health insurance plans,
life insurance plans, and disability insurance plans (other than Employee
Benefit Plans).

Environmental
Laws: Any
federal, state and local laws, statutes, ordinances, rules, regulations
(including the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended from time to time (42 U.S.C. § 9601 et seq.) and the
applicable provisions of all applicable state and local statutes, as amended
from time to time, and rules and regulations promulgated thereunder),
authorizations, judgments, decrees, administrative orders, concessions, grants,
franchises, agreements and other governmental restrictions and requirements
relating to the environment.

Equipment
Leases: Shall
have the meaning given to it in Section
4.08.

ERISA: The
Employee Retirement Income Security Act of 1974, as amended.

Escrow: The
escrow, if any, created for the purpose of facilitating the transactions
contemplated by this Agreement pursuant to the Escrow Instructions.

Escrow
Company: First
American Title Insurance Company.

Escrow
Instructions: The
escrow instructions, if any, to be executed and delivered by the parties and the
Escrow Company, as escrowee in connection with the Escrow. 

 

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Excluded
Assets: Those
assets, if any, listed on Exhibit
“B” to this
Agreement, the Account Cash and the reserve for replacement of fixtures,
furnishings and equipment, all of which is owned and to be retained by Seller or
Affiliates of Seller.

Excluded
Permits: Those
permits and licenses required for the ownership and operation of the Hotel
which, under applicable law, are nontransferable.

Final
Closing Statement: The
Final Closing Statement required under Section
7.04.

Fixtures
and Tangible Personal Property: All
fixtures, furniture, furnishings, fittings, equipment, cars, trucks, machinery,
apparatus, signage, appliances, draperies, carpeting, keys, and other articles
of personal property now located on the Real Property and used or usable in
connection with any part of the Hotel, subject to such depletions, resupplies,
substitutions, and replacements as shall occur and be made in the normal course
of business but in accordance with present practices excluding, however: (i)
Consumables; (ii) Operating Equipment; (iii) Equipment Leases; (iv) property
owned by Space Lessees, Manager, guests, employees, or other persons furnishing
goods or services to the Hotel (other than Seller or any Affiliate of Seller,
unless denominated as an Excluded Asset); and (v) Improvements.

Franchise
Agreement. That
certain Courtyard by Marriott Franchise Agreement, dated as of June 28, 2001, as
amended by Amendment to Franchise Agreement dated as of October 30, 2001,
between Marriott International, Inc. ("Marriott") and Seller.

General
Assignment: Shall
have the meaning given to it in Section
6.03(c).

Ground
Lease: That
certain Ground Lease, dated as of May 2, 2001, between Seller and the Town of
Brookline, a Municipal corporation.

Ground
Lease Assignment. Shall
have the meaning given to it in Section
6.03(a).

Hotel: Shall
have the meaning given to it in Recital
A.

Hotel
Contracts: All
service contracts, maintenance contracts, purchase orders, leases, and other
contracts or agreements, including equipment leases capitalized for accounting
purposes, and any amendments thereto, with respect to the ownership,
maintenance, operation, provisioning, or equipping of the Hotel, or any of the
Property, as well as written warranties and guaranties relating thereto, if any,
including, but not limited to, those relating to heating and cooling equipment
and/or mechanical equipment, but exclusive, however, of (i) insurance policies,
(ii) the Bookings, (iii) the Employment Contracts, and (iv) the Employee Benefit
Plans.

Improvements: The
buildings, structures (surface and sub-surface), and other improvements,
including such fixtures as shall constitute real property, located on the
Land.

Indemnified
Parties: Shall
have the meaning given to it in Section
4.06.

Indemnitees:
A party’s
partners, trustees, officers, directors, employees, beneficiaries, shareholders,
members, managers, advisors, and other agents and their respective partners,
trustees, beneficiaries, employees, officers, directors, and
shareholders.

 

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Inspection
Period: Shall
have the meaning given to it in Section
4.01.

Inventory: All
articles of personal property now located on the Real Property and used, usable,
or salable in connection with any part of the Hotel, subject to such depletions,
resupplies, substitutions and replacements as shall occur and be made in the
normal course of business, but in accordance with present practices excluding,
however: (i) Fixtures and Tangible Personal Property; (ii) Consumables; (iii)
Operating Equipment; (iv) Equipment Leases; (v) property owned by Manager,
guests, employees, or other persons furnishing goods or services to the Hotel
(other than Seller or any Affiliate of Seller, unless denominated as an Excluded
Asset); and (vi) Improvements.

Land: The
parcel of real estate leased by Seller pursuant to the Ground Lease, which
parcel is described in Exhibit
“A”,
together with all rights, title, and interest, if any, of Seller in and to all
land lying in any street, alley, road, or avenue, open or proposed, in front of
or adjoining said Land, to the centerline thereof, and all right, title, and
interest of Seller in and to any award made or to be made in lieu
thereof.

Legal
Requirements: All
laws, statutes, codes, acts, ordinances, orders, judgments, decrees,
injunctions, rules, regulations, permits, licenses, authorizations, directions,
and requirements of all governments and governmental authorities having
jurisdiction of the Hotel (including, for purposes of this Agreement, any local
Board of Fire Underwriters), and the operation of the Hotel.

Liabilities: All
liabilities, demands, liens, interest, claims, actions or causes of action,
assessments, losses, fines, penalties, costs (including, without limitation,
response and/or remedial costs), damages and expenses including, without
limitation, those asserted by any Federal, state or local governmental or
quasi-governmental agency, third party, or former or present employee, including
attorneys’, consultants’ and expert witness fees and expenses.

Liquor
License: Any and
all licenses and permits required by any applicable governmental authorities for
the sale and consumption of alcoholic beverages at the Hotel.

Management
Agreement: That
certain Webster Street Hotel Management Agreement, dated as of April 23, 2001,
between Seller and Manager pursuant to which Manager manages the
Hotel.

Manager:
Brookline
Hotel Management LLC, a Connecticut limited liability company.

Material
Contracts: All
Hotel Contracts which cannot be cancelled by ninety (90) days’ or less written
notice without penalty or premium payment.

Miscellaneous
Hotel Assets: All
contract rights, leases, concessions, trademarks, logos, copyrights, goodwill,
assignable warranties, and other items of intangible personal property relating
to the ownership or operation of Hotel, but such term shall not include (i)
Bookings; (ii) Hotel Contracts; (iii) the Management Agreement; (iv) Space
Leases; (v) Permits; (vi) Cash-On-Hand; (vii) Books and Records (except as
provided in Section
14.01(g)); (viii)
Accounts Receivable; (ix) refunds, rebates, or other claims, or any interest
thereon, for periods or events occurring prior to the Cut-off Time; (x) utility
and similar deposits; (xi) prepaid insurance or other prepaid items; or (xii)
prepaid license and permit fees; except to the extent that Seller receives a
credit on the Final Closing Statement for any such item or matter.

 

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Notice
and Notices: Shall
have the meanings given to them in Section
13.01.

Obligations: All
payments required to be made and all representations, warranties, covenants,
agreements, and commitments required to be performed under the provisions of
this Agreement by Seller or Purchaser, as applicable.

OFAC:
Shall
have the meaning given to it in Section
5.02(c).

Opening
of Escrow: Shall
mean the earliest date on which Escrow Company has received both a fully
executed copy of this Agreement and the Earnest Money.

Operating
Equipment: All
china, glassware, linens, silverware, and uniforms, whether in use or held in
reserve storage for future use, in connection with the operation of the Hotel,
which are on hand on the date of this Agreement subject to such depletion and
restocking as shall be made in the normal course of business but in accordance
with present practices.

Permits: All
licenses, franchises, and permits, certificates of occupancy, authorizations,
and approvals used in or relating to the ownership, occupancy, or operation of
any part of the Hotel, including, without limitation, those necessary for the
sale and on-premises consumption of food, liquor, and other alcoholic
beverages.

Permitted
Exceptions: The
liens, encumbrances, restrictions, exceptions, and other matters specified in
Exhibit “C”, as well as those matters approved or deemed approved under
Section
4.07 and such
other matters that arise subsequent to the date of the Title Commitment that are
acceptable to Purchaser, to which title to the Property shall be subject on the
Closing Date.

Personal
Property: All of
the Property other than the Real Property.

Preliminary
Closing Statement: The
Preliminary Closing Statement required by Section
7.04.

Property: (i) The
Real Property, (ii) the Fixtures and Tangible Personal Property; (iii) the
Operating Equipment; (iv) the Consumables; (v) the transferable right, title,
and interest of Seller in, to, and under the Hotel Contracts; (vi) the Bookings;
(vii) the Permits (other than Excluded Permits); (viii) the Documents; (ix) the
Warranties; (x) the Books and Records and (xi) the Miscellaneous Hotel Assets,
provided, however, that Property shall not include the Excluded
Assets.

 

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Proratable
Compensation:
Compensation exclusive of severance pay and Employee Benefit Plans.

Purchase
Price: Shall
have the meaning given to it in Section
3.01.

Real
Property: The
Ground Lease together with the Improvements located on the Land.

Space
Leases: All
leases, licenses, concessions, and other occupancy agreements for the use or
occupancy of any portion of the Real Property excluding, however,
Bookings.

Space
Lessee: Any
person or entity entitled to occupancy of any portion of the Real Property under
a Space Lease.

Survey: Shall
have the meaning given to it in Section
4.07.

Termination
Notice: Shall
have the meaning given to it in Section
4.04.

Title
Commitment: Shall
have the meaning given to it in Section
4.07.

Title
Company: First
American Title Insurance Company.

Title
Policy: A 1992
ALTA Leasehold Owner’s Title Insurance Policy issued by the Title Company
pursuant to the Title Commitment, in favor of Purchaser and in the amount of the
portion of the Purchase Price allocated to the Real Property, showing good and
marketable leasehold title in the Real Property to be vested in Purchaser,
subject to only the Permitted Exceptions.

Title
Review Date: Shall
have the meaning given to it in Section
4.07.

Transfer:
Shall
have the meaning given to it in Section
14.01(j).

UCC: The
Uniform Commercial Code in effect in Massachusetts.

UCC
Search: A search
of the filings (at the state and county levels) pursuant to the UCC with regard
to the Personal Property.

Unopened
Consumables: Consumables
which are in unopened containers, or if not purchased in “containers”,
Consumables which are in the state first received and which have not been placed
in service.

Warranties: All of
Seller's right, title and interest in and to all presently effective and
assignable warranties, guaranties, representations or covenants given to or made
in favor of either Seller in connection with the acquisition, development,
construction, maintenance, repair, renovation or inspection of any of the
Property, including any made under any construction contracts and the service or
maintenance contracts.

 

1.02
References. Except
as otherwise specifically indicated, all references to Section and Subsection
numbers refer to Sections and Subsections of this Agreement, and all references
to Exhibits refer to the Exhibits attached to this Agreement. The words
“hereby,”
“hereof,”
“herein,”
“hereto,”
“hereunder,”
“hereinafter,” and
words of similar import refer to this Agreement as a whole and not to any
particular section or subsection of this Agreement. Captions are for convenience
only and shall not be used to construe the meaning of any part of this
Agreement.

 

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ARTICLE
II

SALE
AND PURCHASE; “AS-IS,” “WHERE-IS” SALE

 

2.01
Sale
and Purchase. Seller
hereby agrees to sell to Purchaser, and Purchaser hereby agrees to purchase from
Seller, the Property on the terms and subject to the conditions of this
Agreement.

 

2.02
As-is,
Where-is. (a)
Purchaser represents that by reason of its business and financial experience,
and the business and financial experience of those persons retained by Purchaser
to advise it with respect to its investment in the Property, Purchaser has
sufficient knowledge, sophistication, and experience in business and financial
matters to evaluate the merits and risks of the prospective investment and is
able to bear the economic risk of such investment. Purchaser will have and has
had adequate opportunity and time to review and analyze the risks attendant to
the transactions contemplated in this Agreement with the assistance and guidance
of competent professionals. In addition, this Agreement gives Purchaser a period
of time to inspect, examine, and investigate the Property (and to review survey
and title matters relating to the Property) and, subject to the provisions of
this Agreement, the right to terminate this Agreement if Purchaser is
unsatisfied with the results of Purchaser’s inspections, examinations, and
investigations. Purchaser represents, warrants, and agrees that if Purchaser
elects to consummate the purchase of the Property after making such inspections,
examinations, and investigations, except as otherwise specifically set forth in
this Agreement, Purchaser is relying solely on its own inspections,
examinations, and investigations in making the decision to purchase the
Property.

(b)    Except for
the representations and warranties expressly set forth in Section
5.01,
Purchaser has not relied, and is not relying, upon any information, documents,
sales brochures, or other literature, maps or sketches, projections, pro formas,
statements, representations, guaranties, or warranties (whether express or
implied, oral or written, material or immaterial) that may have been given or
made by or on behalf of Seller.

(c)    Except as
otherwise provided herein, Purchaser is not relying and has not relied on Seller
or any of its members, or any of their respective officers, members, partners,
directors, shareholders, agents, attorneys, employees, or representatives as to
(i) the quality, nature, adequacy, or physical condition of the Property
including, but not limited to, the structural elements, foundations, roofs,
appurtenances, access, landscaping, parking facilities, electrical, mechanical,
HVAC, plumbing, sewage or utility systems, facilities, or appliances at the
Property or any portion of the Property, (ii) the quality, nature, adequacy, or
physical condition of soils or the existence of ground water at the Property,
(iii) the existence, quality, nature, adequacy, or physical condition of any
utility serving the Property, (iv) the ad valorem taxes now or hereafter payable
on the Property or the valuation of the Property for ad valorem tax purposes,
(v) the development potential of the Property or the habitability,
merchantability or fitness, suitability, or adequacy of the Property or any
portion of the Property for any particular use or purpose, (vi) the zoning or
other legal status of the Real Property, (vii) the compliance by the Property,
or any portion of the Property, or the operations conducted on or at the
Property, with any Legal Requirements or other covenants, conditions, or
restrictions, (viii) the quality of any labor or materials relating in any
manner to the Property, or (ix) except as otherwise expressly provided in this
Agreement, the condition of title to the Property or the nature, status, and
extent of any right-of-way, lease, right of redemption, possession, lien,
encumbrance, license, reservation, covenant, condition, restriction, or any
other matter affecting title to the Property.

 

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(d)    EXCEPT AS
OTHERWISE PROVIDED HEREIN, THE SALE AND CONVEYANCE BY SELLER TO PURCHASER OF ALL
RIGHT, TITLE, AND INTEREST OF SELLER IN AND TO THE PROPERTY WILL BE MADE WITHOUT
ANY WARRANTY OR RECOURSE WHATSOEVER, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY
OF TITLE (EXCEPT AS TO ACTS OF SELLER), ABSENCE OF DEFECTS (WHETHER APPARENT OR
LATENT, KNOWN OR UNKNOWN, EASILY DISCOVERABLE OR HIDDEN), FITNESS FOR ANY
ORDINARY USE, OR FITNESS FOR ANY INTENDED USE OR PARTICULAR PURPOSE, EVEN FOR
THE RETURN OR REDUCTION OF THE PURCHASE PRICE OR OTHERWISE, THE SOLE PERIL AND
RISK OF EVICTION (EXCEPT AS A RESULT OF ACTS OF SELLER) TO BE ASSUMED BY
PURCHASER, BUT WITH FULL SUBSTITUTION AND SUBROGATION IN AND TO ALL OF THE
RIGHTS AND ACTIONS OF WARRANTY WHICH SELLER HAS OR MAY HAVE AGAINST ALL
PRECEDING OWNERS OR SELLERS; IT BEING UNDERSTOOD THAT PURCHASER WILL TAKE THE
PROPERTY “AS
IS” AND
“WHERE
IS”,
PURCHASER HEREBY ACKNOWLEDGING RELIANCE SOLELY ON ITS OWN TITLE EXAMINATION AND
INSPECTION OF THE PROPERTY, AND NOT ON ANY WARRANTIES OR REPRESENTATIONS FROM
SELLER.

(e)    EXCEPT AS
OTHERWISE PROVIDED HEREIN, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
PURCHASER ACKNOWLEDGES THAT SELLER HAS MADE NO REPRESENTATIONS OR WARRANTIES OF
ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY
INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OR REPRESENTATIONS AS TO TITLE
(EXCEPT AS TO ACTS OF SELLER), ABSENCE OF DEFECTS (WHETHER APPARENT OR LATENT,
KNOWN OR UNKNOWN, EASILY DISCOVERABLE OR HIDDEN), HABITABILITY, MERCHANTABILITY,
FITNESS FOR ANY ORDINARY USE, FITNESS FOR ANY INTENDED USE OR PARTICULAR
PURPOSE, ZONING, TAX CONSEQUENCES, PHYSICAL CONDITION, UTILITIES, OPERATING
HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, THE COMPLIANCE OF THE
PROPERTY WITH LEGAL REQUIREMENTS, INCLUDING WITHOUT LIMITATION THE AMERICANS
WITH DISABILITIES ACT OF 1990, 42 U.S.C. 12101, ET SEQ., THE
TRUTH, ACCURACY, OR COMPLETENESS OF ANY MATERIALS, DATA, OR INFORMATION PROVIDED
BY OR ON BEHALF OF SELLER TO PURCHASER, OR THE MANNER OR QUALITY OF THE
CONSTRUCTION OR MATERIALS INCORPORATED INTO THE PROPERTY OR THE MANNER OF
REPAIR, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY OR ANY
PORTION THEREOF. ALL SUCH WARRANTIES WITH RESPECT TO THE PROPERTY ARE HEREBY
DISCLAIMED BY SELLER AND EXPRESSLY WAIVED BY PURCHASER. PURCHASER HAS NOT RELIED
AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESS OR
IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS, OR INFORMATION
PERTAINING OR RELATING TO THE PROPERTY MADE OR FURNISHED BY SELLER, ANY PARTY
ACTING OR PURPORTING TO ACT FOR SELLER, OR ANY REAL ESTATE BROKER OR AGENT
REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN,
DIRECTLY OR INDIRECTLY, VERBALLY OR IN WRITING. PURCHASER FURTHER HAS NOT RELIED
ON SELLER’S SKILL OR JUDGMENT IN SELECTING THE PROPERTY. PURCHASER SHALL HAVE NO
RIGHT OR CAUSE OF ACTION IN WARRANTY OR OTHERWISE AGAINST SELLER IN ANY
CONTROVERSY, CLAIM, DEMAND, OR LITIGATION ARISING FROM OR IN CONNECTION WITH THE
PROPERTY, AND PURCHASER HEREBY WAIVES ANY SUCH RIGHT OR CAUSE OF
ACTION.

 

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(f)    EXCEPT AS
OTHERWISE PROVIDED HEREIN, SELLER HAS NOT, DOES NOT AND WILL NOT MAKE ANY
REPRESENTATIONS OR WARRANTIES WITH REGARD TO (A) COMPLIANCE WITH ANY
ENVIRONMENTAL LAWS OR LAND USE LAWS, RULES, REGULATIONS, ORDERS, OR REQUIREMENTS
INCLUDING, BUT NOT LIMITED TO, THOSE PERTAINING TO THE HANDLING, GENERATING,
TREATING, STORING OR DISPOSING OF ANY HAZARDOUS MATERIAL OR (B) ABSENCE OF ANY
CLAIMS, WHETHER ASSERTED OR UNASSERTED, WITH RESPECT TO COMPLIANCE WITH
ENVIRONMENTAL LAWS OR ENVIRONMENTAL CONDITIONS AT THE PROPERTY. PURCHASER
RELEASES SELLER FROM ANY AND ALL CLAIMS PURCHASER MAY HAVE AGAINST SELLER OF
WHATEVER KIND OR NATURE NOW OR HEREAFTER RESULTING FROM OR IN ANY WAY CONNECTED
WITH THE ENVIRONMENTAL CONDITION OF THE PROPERTY, INCLUDING ANY AND ALL CLAIMS
PURCHASER MAY HAVE AGAINST SELLER UNDER THE COMPREHENSIVE ENVIRONMENTAL
RESPONSE, COMPENSATION, AND LIABILITY ACT,42 U.S.C. §9601 ET
SEQ., AS
AMENDED OR REAUTHORIZED, OR ANY OTHER ENVIRONMENTAL LAW OR COMMON LAW,
PROVIDED, THAT NO
RELEASE IS INTENDED WITH RESPECT TO CLAIMS THAT PURCHASER MAY HAVE AGAINST
SELLER’S PREDECESSORS IN TITLE UNDER APPLICABLE LAW.

(g)    SELLER SHALL
NOT BE LIABLE TO PURCHASER FOR ANY PROSPECTIVE OR SPECULATIVE PROFITS, OR
SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, WHETHER BASED UPON
CONTRACT, TORT, OR NEGLIGENCE OR IN ANY OTHER MANNER ARISING FROM THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. 

(h)    PURCHASER
FURTHER DECLARES AND ACKNOWLEDGES THAT THE FOREGOING WAIVERS HAVE BEEN BROUGHT
TO THE ATTENTION OF PURCHASER AND EXPLAINED IN DETAIL TO IT AND THAT PURCHASER
HAS VOLUNTARILY AND KNOWINGLY CONSENTED TO THE FOREGOING WAIVER.

 

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ARTICLE
III

PURCHASE
PRICE

 

3.01
Purchase
Price. The
purchase price (“Purchase
Price”) to be
paid by Purchaser to Seller at the Closing shall be Fifty-Four Million Five
Hundred Thousand Dollars ($54,500,000.00), plus or minus prorations and
adjustments as provided in this Agreement. The Purchase Price shall be payable
by Purchaser as follows:

(a)    simultaneously
with the full execution and delivery of this Agreement, Purchaser shall deposit
with the Escrow Company, as escrow agent, the amount of Five Hundred Thousand
Dollars ($500,000.00) by a certified check or wire transfer of immediately
available United States of America funds as an earnest money deposit (together
with the interest earned thereon, the “Earnest
Money”), One
Hundred Thousand Dollars ($100,000.00) of which the Escrow Company shall
immediately pay to Seller. 

(b)    Purchaser
shall have the right to cancel this Agreement for any reason or no reason prior
to the expiration of the Inspection Period. If Purchaser cancels the Agreement
prior to the expiration of the Inspection Period, it shall be entitled to a
refund of the Earnest Money (except for the $100,000 paid to Seller at the
signing of this Agreement pursuant to Section
3.01(a)).

(c)    Unless
Purchaser has terminated this Agreement as provided in Section
4.04 before
the expiration of the Inspection Period, the Escrow Company shall pay Seller the
remaining Earnest Money upon the expiration of the Inspection
Period.

(d)    On the date
of Closing, Purchaser shall pay the balance of the Purchase Price, subject to
the prorations and adjustments provided for in this Agreement, in cash by
certified check or wire transfer of immediately available United States of
America funds to the Escrow Company, as escrow agent, in accordance with the
terms and conditions of this Agreement. Purchaser shall be responsible for any
income taxes payable with respect to any interest and/or dividends earned with
respect to the Earnest Money. For those purposes, Purchaser’s federal taxpayer
identification number is 25-1823761.

 

3.02
Earnest
Money Escrow Agreement. The
Earnest Money shall be held and disbursed by the Escrow Company acting as escrow
agent. The parties agree to execute any additional escrow instructions
reasonably required for such purpose by the Escrow Company which are consistent
with this Agreement. The Earnest Money shall be invested in a federally issued
or insured interest bearing instrument and shall be paid to the party to which
the Earnest Money is paid pursuant to the provisions of this Agreement. If the
sale of the Property is consummated in accordance with the terms of this
Agreement, the Earnest Money and Additional Earnest Money (if any) shall be
applied to the Purchase Price to be paid by Purchaser at the Closing. In the
event of a default under this Agreement by Purchaser or Seller, the Earnest
Money and Additional Earnest Money (if any) shall be applied as provided in this
Agreement.

 

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ARTICLE
IV

INSPECTION
PERIOD

 

4.01
Inspection
Period. The
“Inspection
Period” shall
commence on the date hereof and terminate at 5:00 P.M. (Eastern Daylight Savings
Time) on May 31, 2005. Purchaser and its representatives shall be permitted to
enter upon the Property at any reasonable time and from time to time during the
Inspection Period to examine, inspect, and investigate the Property as well as
all records and other documentation located at the Property (collectively,
“Due
Diligence”). The
Due Diligence shall be subject to the terms, conditions, and limitations set
forth in this Article
IV, and
Purchaser’s conduct shall be in strict compliance with the covenants and
agreements contained in this Article
IV.

 

4.02
Review
and Inspection.
Purchaser shall have a right to enter upon the Property for the purpose of
conducting its Due Diligence (each a "Due Diligence Visit") provided that in
each such instance (i) Purchaser notifies Seller in writing of its intent to
enter the Property to conduct its Due Diligence not less than twenty-four (24)
hours prior to such entry; (ii) the date and approximate time period are
scheduled with Seller or Manager; and (iii) Purchaser is in full compliance with
the insurance requirements set forth in Section
4.06. At
Seller’s election, a representative of Seller or Manager shall be present during
any entry by Purchaser or its representatives upon the Property for a Due
Diligence Visit. Purchaser shall take all reasonable precautions to ensure that
neither it nor any of its representatives interfere with the Space Lessees or
guests of the Hotel or ongoing operations occurring at the Property. Purchaser
agrees to discontinue any Due-Diligence promptly upon notice from Seller in the
event such Due-Diligence presents a danger to the life, health or safety of the
public or would otherwise materially and adversely impact the Property.
Purchaser shall not cause or permit any mechanic liens, materialmen’s liens, or
other liens to be filed against the Property as a result of its Due
Diligence.

 

4.03
Testing.
Purchaser
shall have the right to conduct, at its sole cost and expense, any inspections,
studies or tests that Purchaser deems appropriate in determining the condition
of the Property, provided, however, Purchaser is not permitted to perform any
sampling, boring, drilling or other physically intrusive testing into the
structures or ground comprising the Property, including, without limitation, a
Phase I or Phase II environmental assessment, without (i) submitting to Seller
the scope of such testing and a statement from Purchaser's environmental
consultant that such testing is reasonably necessary; (ii) providing Seller with
reasonable assurances of its ability, financial or otherwise, to perform its
obligations to restore the Property under Section
4.06; and
(iii) obtaining the prior written consent of Seller for such testing, which
consent shall not be unreasonably withheld, conditioned, or delayed.
Notwithstanding the foregoing, Purchaser shall have the right to conduct a
non-intrusive Phase I environmental assessment without obtaining Seller's prior
consent provided that such Phase I shall not include any sampling, boring,
drilling or other physically intrusive testing into the structures or ground
comprising the Property. If Purchaser or anyone acting on behalf of Purchaser
takes any samples from the Property in connection with any environmental
testing, then, upon Seller's request, Purchaser shall provide Seller with a
portion of such sample to allow Seller, if it so chooses, to perform its own
testing. Purchaser agrees that in the event the need arises under applicable law
to notify any governmental authority of any condition at the Property as a
result of the findings of any environmental assessment or any other
Due-Diligence, Purchaser shall immediately notify Seller and Seller, not
Purchaser or anyone acting on behalf of Purchaser, shall make such disclosure as
Seller deems appropriate unless otherwise required by applicable
law. 

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4.04
Acceptance
or Rejection. Purchaser
shall have until the expiration of the Inspection Period to conduct its Due
Diligence and to determine whether the Property is acceptable to Purchaser.
Purchaser may, for any or no reason, terminate this Agreement by giving written
notice of termination (“Termination
Notice”) to
Seller and the Escrow Company on or before the expiration of the Inspection
Period. Upon receipt by Seller and the Escrow Company of such Termination
Notice, (i) this Agreement shall be terminated, and the parties shall have no
further obligations to or recourse against each other (except for any provisions
of this Agreement which are expressly stated to survive the termination of this
Agreement, including, without limitation, the indemnification set forth in
Section
4.06) and
(ii) Purchaser and Seller shall promptly by joint notice, instruct the Escrow
Company to return to Purchaser the Earnest Money not previously paid to Seller
pursuant to Section
3.01(a), less
the amount of any damages payable to Seller pursuant to the indemnification set
forth in Section
4.06 or as a
result of any other defaults under this Agreement by Purchaser. If Purchaser
does not timely give a Termination Notice as aforesaid, Purchaser shall be
deemed to have fully and knowingly waived any right to terminate this Agreement
for any reason whatsoever, other than as provided in Section
15.02, or the
failure of any other express material condition to Purchaser’s obligation to
close under this Agreement, which breach or failure is not waived by Purchaser
or cured prior to the expiration of any applicable grace, cure, and notice
periods.

 

4.05
Confidentiality.
Prior to
Closing, Purchaser agrees and covenants with Seller not to disclose to any third
party (other than its agents and employees, lenders, accountants, attorneys, and
other professionals and consultants in connection with the transaction
contemplated in this Agreement who shall also be obligated under this
Section
4.05 not to
disclose) without Seller’s prior written consent, unless Purchaser is obligated
by law to make such disclosure (including any requirements of the Securities and
Exchange Commission to make such disclosure with respect to any publicly traded
company affiliated with Purchaser), any of the reports or any other
documentation or information obtained by Purchaser which relates to the Property
or Seller in any way, all of which shall be used by Purchaser and its agents
solely in connection with the transaction contemplated by this Agreement. If
this Agreement is terminated, Purchaser agrees that all such information will
continue to be held in strict confidence and, to the extent possible, be
returned or delivered to Seller.

 

4.06
Indemnification;
Restoration; Insurance. Purchaser
agrees to indemnify, protect, defend, and hold Seller and its partners,
trustees, officers, directors, employees, beneficiaries, shareholders, members,
managers, advisors, and other agents, and their respective partners, trustees,
officers, directors, employees, beneficiaries, shareholders, members, managers,
advisors and agents (collectively, the “Indemnified
Parties”)
harmless from and against any and all liabilities, demands, actions, causes of
action, suits, claims, losses, damages, costs, and expenses (including, without
limitation, reasonable attorneys’ fees, court costs, and litigation expenses)
suffered or incurred by any of the Indemnified Parties as a result of or in
connection with any activities of Purchaser (including activities of any of
Purchaser’s employees, consultants, contractors, or other agents) relating to
the inspection of the Property, including, without limitation, mechanics’ liens,
damage to the Property, injury to persons or property resulting from such
activities in connection therewith or a violation of the confidentiality
provisions of this Agreement; notwithstanding the foregoing, Purchaser's
indemnification obligations hereunder shall not include any obligation or duty
whatsoever with respect to any such claims (including claims that the Real
Property has declined in value) arising out of, resulting from or incurred in
connection with (a) the discovery or presence of any hazardous substances,
or (b) the results or findings of any tests or analyses of Purchaser's
environmental or other Due Diligence of the Property. If the Property is
disturbed or altered in any way as a result of such activities, Purchaser, at
its sole cost and expense, shall promptly restore the Property to its condition
existing prior to the commencement of such activities which disturb or alter the
Property. Furthermore, Purchaser agrees to maintain and cause any of its
representatives or agents conducting any Due Diligence to maintain and have in
effect commercial general liability insurance with limits of not less than Two
Million Dollars ($2,000,000.00) for personal injury, including bodily injury and
death, and property damage, naming Seller as an additional insured party, and
containing a waiver of subrogation. Purchaser shall deliver to Seller a copy of
the certificate of insurance effectuating the insurance required under this
Section
4.06 prior to
the commencement of such activities, which certificate shall provide that such
insurance shall not be terminated or modified without at least thirty (30) days’
prior written notice to Seller.

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4.07
Title
and Survey. Prior to
or promptly upon execution of this Agreement, Purchaser shall obtain, at
Purchaser’s sole cost and expense, a commitment for title insurance along with a
copy of each instrument listed as an exception thereon (the “Title
Commitment”) on the
Real Property issued by the Title Company, and shall have or promptly order a
current survey (the “Survey”) of the
Land and Improvements. Purchaser shall have until the expiration of the
Inspection Period to examine the Title Commitment, the Survey, and the results
of any UCC Search (if ordered by Purchaser) and to make any objections thereto
to Seller in writing. If Purchaser fails to make any objections on or before the
expiration of the Inspection Period, Purchaser shall be deemed to have accepted
all exceptions contained in the Title Commitment, the form and substance of the
Survey and all matters shown thereon (or any matters which would have been shown
on a current ALTA survey if Purchaser fails to have obtained one), and all
matters disclosed pursuant to the UCC Search (or any matters which would have
been shown on a UCC Search if Purchaser fails to have obtained one); all such
exceptions and matters and any exceptions or matters caused by or through
Purchaser shall be “Permitted
Exceptions” as used
in this Agreement. If any objections to the Title Commitment, the Survey, or the
results of the UCC Search are made properly on or before the expiration of the
Inspection Period, then Seller shall have the right, but not the obligation,
exercisable by written notice to Purchaser within five (5) days after delivery
of Purchaser's objections, to cure (by removal, endorsement over, or otherwise)
such objections to Purchaser's reasonable satisfaction, on or before the Closing
Date. If no such notice from Seller concerning such election is received by
Purchaser by such date, then Seller shall be deemed to have elected not to cure
any such objections. If any such objections are not cured by Seller by the
scheduled Closing Date, then Purchaser may as its only option, elect to either:
(y) waive such objection(s) and consummate the transaction contemplated by this
Agreement without adjustment to the Purchase Price or (z) terminate this
Agreement, in which event the Earnest Money shall be returned to Purchaser
(except for the $100,000 paid to Seller at the signing of this Agreement
pursuant to Section
3.01(a)) and
neither party shall have any further Obligations to the other
party.

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4.08
Equipment
Leases. If the
Hotel Contracts include any equipment leases (the "Equipment
Leases"),
Purchaser agrees to assume all obligations thereunder arising from and after the
date of Closing and agrees to indemnify and hold Seller (and any affiliate of
Seller which is a lessee thereunder) from and against any cost, expense, claim
or liability from and after the date of Closing.

ARTICLE
V

REPRESENTATIONS
AND WARRANTIES

 

5.01
Representations
and Warranties of Seller. Seller
hereby represents and warrants the following matters to Purchaser. Whenever a
representation or warranty or other reference is made in this Agreement on the
basis of the actual knowledge, best of knowledge or otherwise with reference to
the knowledge of Seller, such representation, warranty or reference is made (i)
solely on the basis of the actual, as distinguished from implied, imputed and
constructive, knowledge, on the date that such representation or warranty is
made, of David J. Buffam (“Seller’s
Representative”),
without inquiry or investigation or duty; and (ii) with the exclusion of any
facts disclosed to or otherwise actually known by Purchaser. The Seller
represents and warrants that Seller's Representative is the individual
responsible for overseeing the sale of the Property to Purchaser and is
knowledgeable concerning the ownership and management of the Property
..

(a)    Due
Organization. Seller is
a limited liability company duly formed, validly existing and in good standing
under the laws of Delaware, and Seller is qualified to do business in
Massachusetts. Seller has full power and authority, and has taken all corporate
and other action necessary to authorize Seller to make, execute, deliver, and
perform this Agreement except as otherwise provided herein. The person executing
this Agreement on behalf of Seller has been duly authorized to do so. This
Agreement is a binding and legal agreement of Seller, enforceable against Seller
in accordance with its terms.

(b)    No
Conflict. The
execution and delivery of this Agreement and the closing documents to be
executed in connection herewith and the consummation of the transactions
contemplated hereby and thereby, except as otherwise provided herein, do not
require the consent or approval of any governmental authority, nor shall such
execution and delivery result in a breach or violation of any Legal Requirement,
or conflict with, breach, result in a default (or an event which with notice and
passage of time or both will constitute a default) under, or violate any
contract or agreement to which Seller is a party or by which it or the Property
is bound.

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(c)    Pending
Litigation. To
Seller’s actual knowledge, except as described in Exhibit
“D”, there
are no actions, suits, or proceedings, pending or threatened against Seller or
affecting any of Seller’s rights, in each case, with respect to the Property
which might result in any order, injunction, decree or judgment having a
material adverse effect on the Hotel or the Property. To Seller’s actual
knowledge, except as noted in Exhibit
“E”, Seller
has not received any notice of any violation of a Legal Requirement which would
have a material impact on the operations of the Hotel and which has not been
corrected.

 

(d)    Condemnation. To
Seller’s actual knowledge, there are no pending, or threatened, condemnation
proceedings, or condemnation actions against the Property.

(e)    Employees.
No union
is presently serving as collective bargaining agent for any
Employees.

(f)    Ground
Lease. Upon
execution of this Agreement, Seller shall provide Purchaser with a true and
complete copy of the Ground Lease.

(g)    Management
Agreement. The
Management Agreement is in full force and effect, the Manager has been paid to
date and there are not defaults under the Management Agreement that would
interfere with the sale of the Property to Purchaser.

(h)    Licenses
and Permits. To the
best of Seller's knowledge, Seller has not received any written notice from any
governmental or quasi-governmental agency having jurisdiction over the Property
that any material license, permit or approval has been violated or is in
default.

(i)    Notice
of Assessment. To best
of Seller's knowledge, Seller has not received written notice of any special
assessments or taxes against the Property from any governmental agency which
relate to any planned public improvements with respect to the
Property.

(j)    Environmental
Notice. To the
best of Seller's knowledge, Seller represents that it has not received any
notices of violation of any Environmental Laws regarding any environmental
conditions at the Hotel.

(k)    Space
Lessees. There
are no Space Lessees.

(l)    Financial
Statements. Upon
execution of this Agreement, Seller shall provide Purchaser with audited
financial statements for fiscal years 2003 and 2004 and monthly profit and loss
statements for 2005. To the best of Seller's knowledge, the monthly profit and
loss statements for 2005 are true and correct in all material
respects.

(m)    Latent
Defects. To the
best of Seller's knowledge, there are no latent defects contained on, above,
beneath, within or about the Property which are not readily discoverable through
diligent inquiry by Purchaser.

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5.02
Representations
and Warranties of Purchaser.
Purchaser hereby represents and warrants the following to Seller:

(a)    Due
Organization.
Purchaser is a limited partnership duly formed, validly existing and in good
standing under the laws of Virginia, qualified to do business in Massachusetts.
Purchaser has full power and authority to enter into and perform this Agreement
and the transactions contemplated by this Agreement, and Purchaser has taken all
corporate and other action necessary to authorize Purchaser to make, execute,
deliver, and perform this Agreement and the transactions contemplated by this
Agreement.

(b)    No
Conflict. The
execution and delivery of this Agreement and the closing documents to be
executed in connection herewith and the consummation of the transactions
contemplated hereby and thereby, except as otherwise provided herein, do not
require the consent or approval of any governmental authority, nor shall such
execution and delivery result in a breach or violation of any Legal Requirement
or conflict with, breach, result in a default (or an event which with notice and
passage of time or both will constitute a default) under, or violate any
contract or agreement to which Purchaser or an Affiliate of Purchaser is a party
or by which it or its property is bound.

(c)    OFAC.
Neither
Purchaser nor any of its affiliates or constituents have engaged in any dealings
or transactions, directly or indirectly, (i) in contravention of any U.S.,
international or other money laundering regulations or conventions, including,
without limitation, the United States Bank Secrecy Act, the United States Money
Laundering Control Act of 1986, the United States International Money Laundering
Abatement and Anti-Terrorist Financing Act of 2001, Trading with the Enemy Act
(50 U.S.C. §1 et seq., as amended), or any foreign asset control regulations of
the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) or any enabling legislation or executive order relating thereto, or
(ii) in contravention of Executive Order No. 13224 dated September 24, 2001
issued by the President of the United States (Executive Order Blocking Property
and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or
Support Terrorism), as may be amended or supplemented from time to time
("Anti-Terrorism Order") or on behalf of terrorists or terrorist organizations,
including those persons or entities that are included on any relevant lists
maintained by the United Nations, North Atlantic Treaty Organization,
Organization of Economic Cooperation and Development, Financial Action Task
Force, U.S. Office of Foreign Assets Control, U.S. Securities & Exchange
Commission, U.S. Federal Bureau of Investigation, U.S. Central Intelligence
Agency, U.S. Internal Revenue Service, or any country or organization, all as
may be amended from time to time. Neither Purchaser nor any of its affiliates or
constituents nor, to the best of Purchaser’s knowledge, any brokers or other
agents of same, (i) are or will be conducting any business or engaging in any
transaction with any person appearing on the U.S. Treasury Department’s Office
of Foreign Assets Control list of restrictions and prohibited persons, or (ii)
are a person described in section 1 of the Anti-Terrorism Order, and to the best
of Purchaser’s knowledge neither Purchaser nor any of its affiliates have
engaged in any dealings or transactions, or otherwise been associated with any
such person. If at any time this representation becomes false than it shall be
considered a default under this Agreement and Seller shall have the right to
exercise all of the remedies set forth in this Agreement in the event of a
default or to terminate this Agreement immediately.

 

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(d)    Qualified
Franchisee.
Purchaser has been approved by Marriott as a Courtyard by Marriott franchisee in
connection with other hotel properties, is currently a Marriott franchisee of
other Courtyard by Marriott hotels, and is not a "competitor" as such term is
defined in Article XV of the Franchise Agreement.

(e)    As-is,
Where-is.
Purchaser understands that subject to the provisions of this Agreement it will
take the Property "as-is" and "where-is" and hereby reaffirms the
representations and warranties contained in Section
2.02.
Purchaser hereby acknowledges that Seller has made it aware that Level P3 of the
Hotel requires work and such work is currently in the design phase and will not
have commenced at Closing. 

 

5.03
Duration
of Representations and Warranties. All
representations and warranties contained in this Agreement shall be deemed
remade as of the Closing and shall survive the Closing for a period of six (6)
months and shall not merge into any of the closing documents; provided, however,
that no person, firm, or entity shall have any liability or obligation with
respect to any representation or warranty contained in this Agreement unless on
or prior to the date that is six (6) months following the Closing Date, the
party seeking to assert liability under such representation or warranty shall
have notified the other party in writing setting forth specifically the
representation or warranty allegedly breached and a detailed description of the
alleged breach. All liabilities and obligations of both parties under any
representation or warranty shall lapse and be of no further force or effect with
respect to any matter not contained in a written notice delivered as
contemplated above on or prior to the date that is six (6) months after the
Closing Date. Notwithstanding the foregoing, Purchaser acknowledges and agrees
that Seller shall have no liability for any breach of a representation or
warranty set forth in this Agreement (a) unless and until the aggregate
liability of Seller with respect to any and all claims of Purchaser relating to
breaches of representations or warranties of Seller contained in this
Article
V shall
exceed One Hundred Thousand Dollars ($100,000), and then only with respect to
the amount by which such claims shall exceed One Hundred Thousand Dollars
($100,000) and (b) to the extent such liability shall exceed Five Hundred
Thousand Dollars ($500,000) in the aggregate.

ARTICLE
VI

CLOSING
AND CLOSING DELIVERIES

 

6.01
Closing.
The
Closing shall take place at the offices of Ropes & Gray LLP on the Closing
Date, or through escrow by the necessary delivery of documents and funds to
Escrow Company on or prior to the Closing Date, or at such other place as agreed
in writing by Purchaser and Seller. The Closing shall if requested by Seller or
Purchaser be effected pursuant to the Escrow Instructions. Each of Purchaser and
Seller acknowledges that its respective undertakings to close this transaction
promptly on the Closing Date is a material inducement to the other to execute
this Agreement, that time is of the essence, and that neither party shall have
any obligation to extend, postpone or reschedule the Closing, except as
expressly set forth herein. Notwithstanding the foregoing, at Seller's election
by delivery of written notice to Purchaser on or before the Closing Date, the
Closing Date shall be extended for a period of up to sixty (60) days in the
event that Marriott has not accepted or rejected Purchaser's application for a
Courtyard by Marriott franchise with respect to the Hotel by the Closing Date;
provided that if Seller elects not to extend the Closing Date pursuant to this
Section
6.01, at
Purchaser's election by depositing with Escrow Company, as escrow agent, on or
before the Closing Date, the amount of Two Hundred Thousand Dollars
($200,000.00) by certified check or wire transfer of immediately available
United States of America funds as an additional earnest money deposit (the
"Additional
Earnest Money"), the
full amount of which the Escrow Company shall immediately pay to Seller, the
Closing Date shall be extended for up to twenty-one (21) days. If
either Seller or Purchaser elects to extend the Closing Date pursuant to this
Section
6.01, the
term "Closing Date" shall mean the Closing Date as so extended.

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6.02
Escrow. This
Agreement shall not be merged into any Escrow Instructions, but any Escrow
Instructions shall be deemed auxiliary to this Agreement and, as between
Purchaser and Seller, the provisions of this Agreement shall govern and
control.

 

6.03
Seller’s
Deliveries. At
Closing, Seller shall execute (to the extent required) and deliver, or cause to
be delivered, to Purchaser or the Escrow Company as appropriate:

(a)    a
recordable assignment (“Ground
Lease Assignment”) of all
of Seller’s right, title, and interest in, to, and under the Ground Lease and
Improvements subject to only the Permitted Exceptions in the form attached to
this Agreement as Exhibit
“F”;

(b)    a Bill of
Sale transferring to Purchaser all of Seller’s right, title, and interest in and
to each and every item of Personal Property to be transferred in the form
attached to this Agreement as Exhibit
“G”;

(c)    an
assignment (“General
Assignment”) of all
of Seller’s right, title, and interest in, to, and under the Bookings, Hotel
Contracts, Permits (other than Excluded Permits), Books and Records, Warranties
and Miscellaneous Hotel Assets in the form of Exhibit
“H”;

(d)    the
certificate referred to in Section
9.01(b);

(e)    an
affidavit of Seller stating that Seller is not a “foreign person” within the
meaning of Section 1445 of the Internal Revenue Code of 1986, as amended in the
form of Exhibit
“I”;

(f)    notices to
Space Lessees and parties to Material Contracts of change in ownership of the
Hotel, if requested by Purchaser;

(g)    the
Preliminary Closing Statement;

(h)    any
required real estate transfer tax declarations or similar documentation required
to evidence the payment of any tax imposed by any state, county, or municipality
together with any change of ownership statements required under applicable law;
and

(i)    copies of
such documents relating to Seller as the Title Company shall reasonably require
in connection with this transaction.

 

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(j)    all key
codes, access codes and combinations to locks to the extent known by, or in the
possession of, Seller.

(k)    a title
insurance affidavit.

 

6.04
Purchaser’s
Deliveries. At the
Closing, Purchaser shall execute (to the extent required) and deliver, or cause
to be delivered, to Seller or the Escrow Company as appropriate:

(a)    the
Purchase Price required to be paid pursuant to Section
3.01;

(b)    the Bill of
Sale;

(c)    the
General Assignment;

(d)    the
certificate referred to in Section
8.01(b);

(e)    the
Preliminary Closing Statement;

(f)    copies of
such documents relating to Purchaser as Seller or the Title Company shall
reasonably require in connection with this transaction; 

(g)    any
required real estate transfer tax declarations or similar documentation required
to evidence the payment of any tax imposed by any state, county, or municipality
together with any change of ownership statements required under applicable
law;

(h)    a signed
letter from Marriott approving Purchaser's application to be a Courtyard by
Marriott franchisee with respect to the Hotel; and

(i)    the Ground
Lease Assignment, which shall contain the covenant of assumption pursuant to
Section Seventeen D of the Ground Lease.

 

6.05
Expenses.

 

(a)    Seller shall
pay the following expenses: (i) 50% of all closing Escrow fees; (ii) Seller’s
legal fees and expenses; (iii) the commission due Broker; and (iv) the fee for
recording the Ground Lease Assignment.

(b)    Purchaser
shall pay the following expenses: (i) the cost of the Title Commitment, Title
Policy and the cost of any endorsements to the Title Policy; (ii) the cost of
any reinsurance of the Title Policy; (iii) the cost of the Survey; (iv) 50%
of all closing Escrow fees; (v) all costs and expenses incurred in connection
with the transfer of any transferable permits, warranties, or licenses in
connection with the ownership or operation of the Property; (vi) all costs and
expenses associated with Purchaser’s financing, if any; (vii) all city, county,
and other stamp and transfer taxes payable in connection with the sale of the
Property; and (viii) Purchaser’s legal fees and expenses.

(c)    Any other
ordinary and usual closing costs and expenses, except as expressly provided in
this Agreement, in connection shall be allocated between Purchaser and Seller in
accordance with the customary practice in the county where the Property is
located.

 

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The
provisions of this Section
6.05 shall
survive Closing or any termination of this Agreement. 

 

6.06
Concurrent
Transactions. All
documents or other deliveries required to be made by Purchaser or Seller at
Closing, and all transactions required to be consummated concurrently with
Closing, shall be deemed to have been delivered and to have been consummated
simultaneously with all other transactions and all other deliveries, and no
delivery shall be deemed to have been made, and no transaction shall be deemed
to have been consummated, until all deliveries required by Purchaser and Seller
shall have been made, and all concurrent or other transactions shall have been
consummated.

 

6.07
Possession.
Possession
of the Property shall be delivered at Closing, provided the transaction closes.
Excluded Assets shall be removed from the Hotel by Seller, at its expense, on,
or within thirty (30) days after, the Closing Date. Seller, at its expense shall
make all repairs necessitated by such removal but shall have no obligation to
replace any Excluded Asset so removed.

 

ARTICLE
VII

ADJUSTMENTS
AND PRORATIONS-CLOSING STATEMENTS

 

7.01
Adjustments
and Prorations. THE
FOLLOWING MATTERS AND ITEMS SHALL BE APPORTIONED BETWEEN THE PARTIES OR, WHERE
APPROPRIATE, CREDITED IN TOTAL TO A PARTICULAR PARTY, AS OF THE CUT-OFF TIME AS
PROVIDED BELOW:

(a)    Accounts
Receivable; Trade Accounts Payable. Accounts
Receivable and trade accounts payable shall be identified as of the Cut-off
Time. Purchaser is purchasing Accounts Receivable and Seller shall receive a
credit at the Closing for Accounts Receivable as of the Cut-off Time. Seller
shall pay off all trade accounts payable as of the Cut-off Time. Notwithstanding
the introductory sentence of this Section
7.01, revenue
from room rentals (including food and beverage receivables charged to guest room
accounts) shall belong to Seller to the extent attributable to any period prior
to the Closing Date; provided, however, room charges for the night immediately
preceding the Closing Date shall be divided equally between Purchaser and
Seller. Revenue from the Hotel attributable to food and beverages (including
alcoholic beverages) and other sales or services through the close of business
on the night immediately preceding the Closing Date shall belong to Seller (such
revenue to be determined based on completion of the night auditor’s run on the
night of the Cut-Off Time). Thereafter, revenue from the Hotel attributable to
food and beverage and other sales or services shall belong to Purchaser. Each of
Purchaser and Seller shall be responsible for the payment of any sales and/or
hotel/motel occupancy taxes collected or otherwise due and payable in connection
with the revenue allocated to such party under this Section
7.01(a)
..

 

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(b)    Taxes
and Assessments. All ad
valorem taxes, special or general assessments, assessments under any Permitted
Exceptions, personal property taxes, water and sewer rents, rates and charges,
vault charges, canopy permit fees, and other municipal permit fees shall be
prorated as of the Cut-off Time. If the amount of any such item is not
ascertainable on the Closing Date, the credit therefor shall be based on the
most recent available bill and shall be re-prorated upon receipt of the actual
tax bill.

(c)    Utility
Contracts. Telephone
and telex contracts and contracts for the supply of heat, steam, electric power,
gas, lighting, internet access and any other utility service shall be prorated
as of the Cut-off Time, with Seller receiving a credit for each deposit, if any,
made by Seller as security under any such public service contracts if the same
is transferable and provided such deposit remains on deposit for the benefit of
Purchaser. Where possible, readings as of the Cut-off Time will be secured for
all utilities on the Closing Date.

(d)    Hotel
Contracts. Any
amounts prepaid or payable under any Hotel Contracts shall be prorated as of the
Cut-off Time, with Seller receiving a credit for each deposit, if any, made by
Seller as security under any such Hotel Contract if the same is transferable and
provided such deposit remains on deposit for the benefit of Purchaser. Any
percentage rentals under Space Leases shall be prorated on the basis of the
ratio of the number of days expired before Closing to the number of days after
Closing, for the current percentage rent period of the Space Lease. All security
deposits shall be transferred to Purchaser and all obligations with respect to
such security deposits shall be assumed by Purchaser.

(e)    License
Fees. Fees paid
or payable for Permits (other than Excluded Permits) shall be prorated as of the
Cut-off Time.

(f)    Hotel
Matters.
Purchaser shall receive a credit for: (i) advance payments, if any, under
Bookings for Hotel facilities and, (ii) commissions due to credit and referral
organizations. Seller shall receive a credit for coin machine, telephone,
washroom, and checkroom income relating to the period pre-Closing.

(g)    Employment
Contracts.
Proratable Compensation of Employees shall be prorated as of the Cut-off Time.

(h)    Unopened
Consumable Items; Inventory. The cost
of any Unopened Consumables and of any Operating Equipment and Inventory shall
be credited to Seller.

(i)    Other.
Such
other items as are provided for in this Agreement or as are normally prorated
and adjusted in the sale of a hotel shall be prorated as of the Cut-off
Time.

 

7.02
Payment.
Any net
credit due to Seller as a result of the adjustments and prorations under
Section
7.01 shall be
paid to Seller in cash at the time of Closing. Any net credit due to Purchaser
as a result of the adjustments and prorations under Section
7.01 shall be
credited against the Purchase Price at the time of Closing.

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7.03
Cash
and Accounts. At the
Closing, Seller shall transfer to Purchaser all Cash-On-Hand and Seller shall
receive a credit at the Closing for such Cash-On-Hand. All Account Cash is and
shall remain the property of Seller and shall be retained by Seller after the
Closing.

 

7.04
Closing
Statements.

(a)    Preparation.
Each
party shall cause its designated representatives to enter the Hotel only at
reasonable times and without unreasonably interfering with operations, both
before and after the Closing Date, for the purpose of making such inventories,
examinations, and audits of the Hotel, and of the books and records of the
Hotel, as they deem necessary to make the adjustments and prorations required
under this Article
VII, or
under any other provisions of this Agreement. Based upon such inventories,
examinations, and audits, at the Closing, the representatives of the parties
shall jointly prepare and deliver to each party a preliminary closing statement
(the “Preliminary
Closing Statement”) which
shall show the net amount due either to Seller or Purchaser as a result thereof,
and such net amount will be added to, or subtracted from the payment of the
Purchase Price to be paid to Seller pursuant to Section 3.01 hereof.
Within thirty (30) days following the Closing Date, Seller and Purchaser shall
agree on a final closing statement (the “Final
Closing Statement”)
setting forth the final determination of all items to be included on the Closing
Statement. The net amount due Seller or Purchaser, if any, by reason of
adjustments to the Preliminary Closing Statement as shown in the Final Closing
Statement, shall be paid in cash by the party obligated therefor within ten (10)
days following the date of the Final Closing Statement.

(b)    Disputes.
In the
event the representatives of the parties are unable to reach agreement with
respect to preparation of the Preliminary Closing Statement then, except as
hereinafter provided, the disputed amount shall be held in a joint order Escrow,
pending agreement of the parties or the determination of the Accountants and the
Closing shall occur as scheduled. Purchaser shall be required to deposit in the
Escrow any additional sum of the disputed amount which it may be required to
pay. Any such dispute shall survive and be subject to later resolution pursuant
to this Section
7.04. In the
event the representatives of the parties are unable to reach agreement with
respect to either the Preliminary Closing Statement or the Final Closing
Statement, the parties shall submit their dispute to a firm of independent
certified public accountants of recognized standing in the hotel industry, which
if the parties cannot agree shall be the Accountants, and the determination of
such firm shall be conclusive and binding on both parties hereto.

(c)    Period
for Recalculation. Notwithstanding
the foregoing, if at any time within six (6) months following the Closing Date,
either party discovers any items which should have been included in the Final
Closing Statement but were omitted therefrom, then such items shall be adjusted
in the same manner as if their existence had been known at the time of the
preparation of the Final Closing Statement. The foregoing limitations shall not
apply to any items which, by their nature, cannot be finally determined within
the periods specified.

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ARTICLE
VIII

CONDITIONS
TO SELLER’S OBLIGATIONS

 

8.01
Conditions.
Seller’s
obligation to close the transaction contemplated by this Agreement shall be
subject to the occurrence of each of the following conditions, any one or more
of which may be waived by Seller in writing:

 

(a)    Purchaser’s
Compliance with Obligations. Purchaser
shall have complied with all material Obligations required by this Agreement to
be complied with by Purchaser.

(b)    Truth
of Purchaser’s Representations and Warranties. The
representations and warranties of Purchaser contained in this Agreement were
true in all material respects when made, and are true in all material respects
on the Closing Date, and Seller shall have received a certificate to that effect
signed by Purchaser. In the event any of the Purchaser’s representations become
untrue during the term of the Agreement, Seller may terminate this Agreement
without thereby waiving any right or remedy.

(c)    Franchise
Agreement. Except
for any amounts owed from Seller or Manager to Marriott prior to Closing,
Seller, Manager and their respective Affiliates shall be released from all
obligation and liabilities under the Franchise Agreement and any other related
agreements between Seller or Manager and Marriott relating to the Property. The
Franchise Agreement shall be terminated on or before the Closing Date at the
sole cost and expense of Seller.

 

ARTICLE
IX

CONDITIONS
TO PURCHASER’S OBLIGATIONS

 

9.01
Conditions.
Purchaser’s
obligation to close the transaction contemplated by this Agreement shall be
subject to the occurrence of each of the following conditions, any one or more
of which may be waived by Purchaser in writing:

 

(a)    Seller’s
Compliance with Obligations. Seller
shall have complied with all material Obligations required by this Agreement to
be complied with by Seller.

(b)    Truth
of Seller’s Representations and Warranties. The
representations and warranties of Seller contained in this Agreement were true
in all material respects when made, and are true in all material respects on the
Closing Date, and Purchaser shall have received a certificate to that effect
signed by Seller.

(c)    Title
Policy. The
Title Company shall be irrevocably committed to issue to Purchaser the Title
Policy.

(d)    Management
Agreement. The
Management Agreement and any other related agreements with Manager relating to
the Property shall be terminated on or before the Closing Date at the sole cost
and expense of Seller.

(e)    Franchise
Application. Marriott
shall have approved Purchaser's application to be a Courtyard by Marriott
franchisee with respect to the Hotel.

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ARTICLE
X

ACTIONS
AND OPERATIONS PENDING CLOSING

 

10.01
Actions
and Operations Pending Closing. Seller
agrees that at all times prior to the Closing Date:

(a)    Subject
to conditions beyond Seller’s reasonable control, the Hotel will continue to be
operated and maintained substantially in accordance with present
practices.

(b)    From and
after the expiration of the Inspection Period, Seller will not enter into any
new Material Contract or Space Lease, or cancel, modify, or renew any existing
Material Contract that is not cancelable upon thirty (30) days notice, without
the prior written consent of Purchaser, which consent shall not be unreasonably
withheld, conditioned or delayed. If Purchaser fails to respond to a request for
consent within ten (10) days after receipt of such request, such consent shall
be deemed given. 

(c)    Seller
shall have the right, without notice to or consent of Purchaser, to make
Bookings in the ordinary course of business, at no less than the Hotel’s
standard rates including customary discounted rates.

(d)    Seller
shall use commercially reasonable efforts to preserve in force all existing
Permits and to cause all those expiring on or before the Closing Date to be
renewed prior to the Closing Date. If any such Permit shall be suspended or
revoked, Seller shall promptly notify Purchaser and shall take commercially
reasonable measures to cause the reinstatement of such Permit.

(e)    Seller
will maintain in effect all policies of casualty and liability insurance, or
similar policies of insurance, with the same limits of coverage which it now
carries with respect to the Hotel.

(f)    Seller
shall not
remove any furniture, fixtures, furnishings or equipment located, installed or
used in the Hotel as of the date hereof (except Excluded Assets, if applicable)
other than in the ordinary course of business.

(g)    Seller shall
provide copies of any notices received by governmental or quasi-governmental
organizations regarding any violations of Legal Requirements.

 

ARTICLE
XI

CASUALTIES
AND TAKINGS

 

11.01
Casualties.

(a)    If any
damage to the Property shall occur prior to the Closing Date by reason of fire,
windstorm, earthquake, hail, explosion or other casualty, and if the cost of
repairing such damage will equal or exceed One Million Dollars ($1,000,000.00),
Seller will promptly notify Purchaser and Purchaser may then elect to (i)
terminate this Agreement by giving written notice to Seller in which event
neither party shall have any further Obligations or liability whatsoever to the
other hereunder or (ii) receive an assignment of all of Seller’s rights to any
insurance proceeds (excluding business interruption proceeds) relating to such
damage and acquire the Property with an appropriate adjustment in the Purchase
Price equal to the deductible under the applicable insurance policy (to the
extent such deductible is not applied by Seller for repairs prior to
Closing).

 

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(b)    If the
cost of repairing such damage will not exceed One Million Dollars
($1,000,000.00), the transactions contemplated hereby shall close with an
appropriate adjustment in the Purchase Price equal to the deductible under the
applicable insurance policy (to the extent such deductible is not applied by
Seller for repairs prior to Closing) and Purchaser shall receive an assignment
of all of Seller’s rights to any insurance proceeds (excluding business
interruption proceeds).

 

11.02
Takings. If,
prior to the Closing Date, all or any portion of the Real Estate is taken by
eminent domain or by an act of governmental authority, or if an action for such
taking is initiated or threatened, Seller shall promptly give Purchaser written
notice thereof, and the following shall apply:

(a)    If a
material part of a Real Estate is taken, or is to be taken, Purchaser may,
within five (5) days after the giving of Seller’s notice, by written notice to
Seller, elect to terminate this Agreement. In the event that Purchaser shall so
elect, this Agreement shall terminate and neither party hereto shall have any
further Obligations or liability whatsoever to the other hereunder.

(b)     If a
material part of the Real Estate is taken, or is to be taken, but Purchaser does
not elect to terminate this Agreement pursuant to paragraph (a) above, or if an
immaterial part of the Real Estate is taken by an act of governmental authority,
Purchaser shall have no right to terminate this Agreement, and the parties shall
nonetheless proceed to the Closing in accordance with this Agreement, without
any abatement of the Purchase Price or any liability or Obligations on the part
of Seller by reason of such taking, provided, however, that Seller shall, at the
Closing, (i) assign and turn over, and Purchaser shall be entitled to receive
and keep, the net proceeds of any award or other proceeds of such taking which
may have been collected by Seller as a result of such taking, less any portion
thereof applied to the cost of repairs made by Seller prior to the Closing, or
(ii) if no award or other proceeds shall have been collected, deliver to
Purchaser an assignment of Seller’s right to any such award or other proceeds
which may be payable to Seller as a result of such taking, less an amount equal
to the cost of any repairs made by Seller prior to the Closing, which amount
shall be paid to Seller by Purchaser at the Closing. If all or any part of the
payment proceeds are paid to the holder of any mortgage or deed of trust or
reversionary interest in the Real Estate, then, at the Closing, Seller shall
credit such amount against the Purchase Price.

(c)    For the
purposes hereof, a “material
part” shall
be deemed to mean any taking (i) which causes a reduction in the size of any of
the buildings comprising the Real Estate or materially interferes with the
present use and operation of any of the buildings comprising the Real Estate or
(ii) which results in the elimination of any required means of legal ingress
and/or egress from the Real Estate to public roads, with no comparable,
convenient, legal substitute ingress and/or egress being available.

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ARTICLE
XII

EMPLOYEES

 

12.01
Employees.
Purchaser shall not take or omit to take any act the effect of which may cause
Seller or Manager to incur any liability under 29 USC §2101 et seq., the Worker
Adjustment and Retraining Notification Act (“WARN
Act”). 

 

12.02
Indemnity.
Purchaser shall indemnify Seller and its Affiliates and hold each of them
harmless from and against any losses (including, but not limited to, payments
made to Manager) which may be incurred or suffered by any of them (i) under the
WARN Act arising out of, or relating to, any actions taken by Purchaser prior
to, on or after the Closing Date; (ii) in connection with any claim made by any
current Employee by reason of the Purchaser’s failure to continue to employ or
cause the continuation of employment of such Employee on or after the Closing
Date at substantially the same salary or wages (excluding bonus, commission, and
sales incentive programs) and/or on substantially the same terms and conditions
as in effect immediately prior to the Closing Date (including any claim made by
reason of the Employee not receiving benefits under any Employee Benefit Plan or
receiving any particular benefit or level of benefit); (iii) in connection with
any claim made by an Employee for any severance pay or other compensation or
benefit entitlements by reason of any Employee’s termination or deemed
termination of employment as a result of the transactions contemplated hereby;
(iv) by reason of Purchaser’s failure to comply with any of the provisions of
this Article
XII; (v) in
connection with any employment taxes that, pursuant to Section
7.01(g), have
become the obligation of Purchaser to pay; (vi) in connection with any liability
arising out of Purchaser’s employment policies, practices, or procedures; or
(vii) in connection with Purchaser’s violation or noncompliance with any
applicable federal or state employment law, including, without limitation, the
Consolidated Omnibus Budget Reconciliation Act (COBRA), the Health Insurance
Portability and Accountability Act of 1996 (HIPAA), ERISA, the Family and
Medical Leave Act of 1993 (FMLA), the Fair Labor Standards Act (FLSA), and the
Occupational Safety and Health Act (OSHA).

ARTICLE
XIII

NOTICES

 

13.01
Notices.
Except as
otherwise provided in this Agreement, all notices, demands, requests, consents,
approvals, and other communications (each a “Notice”,
collectively “Notices”)
required or permitted to be given under this Agreement, or which are to be given
with respect to this Agreement, shall be in writing and shall be personally
delivered, transmitted by facsimile transmission, or sent by registered or
certified mail, postage prepaid, return receipt requested, or by overnight
express courier, postage prepaid, addressed to the party as designated
below:

 

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If
intended for Seller, to:

Webster
Street Hotel, LLC

c/o New
Castle Hotels

Two
Corporate Drive, Suite 334

Shelton,
Connecticut 06484

Attn:
David J. Buffam

Telephone:
(203) 925-8370 x7013

Fax:
(203) 925-8376

 

with a
copy to:

Ropes
& Gray LLP

One
International Place

Boston,
Massachusetts 02110

Attn:
Claire McGuire, Esq.

Telephone:
(617) 951-7000

Fax:
(617) 951-7050

If
intended for Purchaser, to:

Hersha
Hospitality Limited Partnership

510
Walnut Street, 9th Floor

Philadelphia,
PA 19106

Attn: Jay
H. Shah

Telephone:
(215) 238-1046

Fax:
(215) 238-0157

with a
copy to:

Wolf,
Block, Schorr & Solis

1650 Arch
Street

Philadelphia,
Pennsylvania 19103

Attn:
James Ray, Esq.

Telephone:
(215) 977-2218

Fax:
(215) 405-3818

Notice
mailed by registered or certified mail shall be deemed received by the addressee
three (3) days after mailing thereof. Notice personally delivered shall be
deemed received when delivered. Notice mailed by overnight express courier shall
be deemed received by the addressee on the next Business Day after mailing
thereof. Notice transmitted by facsimile shall be deemed received by the
addressee upon sender’s receipt of confirmation thereof. Either party may at any
time change the address for notice to such party by mailing a Notice as
aforesaid.

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ARTICLE
XIV

ADDITIONAL
COVENANTS

 

14.01
Additional
Covenants. In
addition, the parties agree as follows:

(a)    Liquor
License. Purchaser
and Seller shall use diligent, good faith efforts to effect the transfer of the
existing Liquor License to Purchaser on the Closing Date. Purchaser agrees to
pay all fees, charges, and related costs in connection with the transfer of the
existing Liquor License. Within ten (10) days following the date of this
Agreement, Purchaser shall complete, execute and file with the applicable liquor
licensing authority all necessary applications for transfer of the Liquor
License. Purchaser specifically acknowledges and agrees that the transfer of the
Liquor License to Purchaser on the Closing Date shall not be a condition to
Purchaser’s obligation to close the transaction contemplated under this
Agreement. 

(b)    Brokerage.
Purchaser and Seller warrant and represent to each other that they have not had
any dealings with any broker, agent, or finder relating to the sale of the
Property or the transactions contemplated hereby other than Pinnacle Realty
Investments (the "Broker”) which
is the Seller’s exclusive representative. Each Party agrees to indemnify and
hold the other and its Indemnitees harmless against and from any and all
Liabilities incurred by the other party arising out of or resulting from any
claim for brokerage commissions, compensation or fees by any broker, agent, or
finder other than the Broker, who Seller is compensating under a separate
agreement in connection with the sale of the Property or the transactions
contemplated hereby resulting from the acts of the indemnifying party. The
provisions of this Section
14.01(b) shall
survive Closing or any termination of this Agreement.

(c)    Guest
Baggage. All
baggage of guests who are still in the Hotel on the Closing Date, which has been
checked with or left in the care of Seller shall be inventoried, sealed, and
tagged jointly by Seller and Purchaser on the Closing Date. Purchaser hereby
indemnifies Seller and its Indemnitees against any Liabilities in connection
with such baggage arising out of the acts of omissions of Purchaser or its
Affiliates (or any of their employees or agents) after the Closing Date. Seller
hereby indemnifies Purchaser and its Indemnitees against any Liabilities in
connection with such baggage arising out of the acts or omissions of Seller or
its Affiliates (or any of their employees or agents) prior to the Closing
Date.

(d)    Safe
Deposits. Immediately
after the Closing, Seller shall send written notice to guests or tenants or
other persons who have safe deposit boxes, if any, advising of the sale of the
Hotel to Purchaser and requesting immediate removal of the contents thereof or
the removal thereof and concurrent re-deposit of such contents pursuant to new
safe deposit agreements with Purchaser. Seller shall have a representative
present when the boxes are opened, in the presence of a representative of the
Purchaser. Any property contained in the safe deposit boxes after such
re-deposit shall be the responsibility of Purchaser, and Purchaser agrees to
indemnify and hold harmless Seller and its Indemnitees from and against any
Liabilities arising out of or with respect to such property.

(e)    Tax
Appeal Proceedings. Seller
shall be entitled to receive and retain the proceeds from any tax appeals or
protests for tax fiscal years prior to the tax fiscal year in which the Closing
Date occurs. In the event an application to reduce real estate taxes is filed
for the period during which Seller was the owner of the Real Property, Seller
shall be entitled to a re-proration of real estate taxes upon receipt of and
based upon the reduction. Seller shall continue to process any pending appeals
or protests with respect to the tax fiscal year in which the Closing Date
occurs, and the net proceeds from any such proceedings, after payment of
attorneys’ fees and other costs associated with such process, will be prorated
between the parties, when received, as of the Closing Date.

 

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(f)    Books
and Records. The
transaction contemplated hereby includes all the books and records of Seller
pertaining to the business of the Hotel. Purchaser covenants and agrees that
such books and records will remain in the Hotel for examination and audit by
Seller and its agents after the Closing as provided in this Section 14.01(g). Books
and records not pertaining to the business of the Hotel may be removed by Seller
within a reasonable time after the Closing Date. Purchaser agrees to preserve
all books and records, files and correspondence, for at least five (5) years
after the Closing Date, and not to destroy or dispose of the same, for at least
five (5) years after the Closing Date. Purchaser agrees to provide access to
Seller and its representatives, to such books, records, files and correspondence
at all reasonable times.

(g)    Survival.
Subject
to Section 5.03, the
representations, warranties, obligations, covenants, agreements, undertakings,
and indemnifications of Seller and Purchaser contained in this Agreement and in
any closing documents delivered in connection with this Agreement, which are
intended and anticipated to survive Closing, shall survive the
Closing.

(h)    Construction.
This
Agreement shall not be construed more strictly against one party than against
the other, merely by virtue of the fact that it may have been prepared primarily
by counsel for one of the parties, it being recognized that both Purchaser and
Seller have contributed substantially and materially to the preparation of this
Agreement.

(i)    Publicity.
All
notice to third parties and all other publicity concerning the transactions
contemplated by this Agreement shall be jointly planned and coordinated by and
between Purchaser and Seller. Neither party shall act unilaterally in this
regard without the prior written approval of the other; however, this approval
shall not be unreasonably withheld or delayed.

(j)    Assignment.
Neither
all nor any portion of Purchaser’s interest under this Agreement may be sold,
assigned, encumbered, conveyed, or otherwise transferred, whether directly or
indirectly, voluntarily or involuntarily, or by operation of law or otherwise
including, without limitation, by a transfer of interest in Purchaser
(collectively, a “Transfer”),
without the prior written
consent of Seller, which consent may be granted or denied in Seller’s sole and
absolute discretion. Any attempted Transfer without Seller’s consent shall be
null and void. Any request by Purchaser for Seller’s consent to a Transfer shall
set forth in writing the details of the proposed Transfer, including, without
limitation, the name, ownership, and financial condition of the prospective
transferee and the financial details of the proposed Transfer. Notwithstanding
the foregoing, Purchaser, upon prior written notice to Seller given not less
than seven (7) business days prior to the Closing (which time period is agreed
to be material and is required to permit Seller properly to prepare, execute and
deliver the items required to be delivered by it pursuant to this Agreement)
which notice specifies the exact legal name, address and any other information
necessary for the preparation of the closing documents to be delivered under
this Agreement, may assign its rights and delegate is duties under this
Agreement to an entity which is owned or controlled, directly or indirectly, by
Purchaser for the purposes of closing on the transaction provided (i) only one
such assignment shall be made; (ii) such assignment shall not delay the Closing;
(iii) such assignment shall not require Seller to obtain any additional or
revised third party consents, certificates or approvals; and (iv) the assignee
shall have a net worth reasonably acceptable to Seller, or Purchaser shall
guaranty the obligations of such assignee under this Agreement and the documents
executed and delivered at Closing. In the event Purchaser so assigns and
delegates its rights and duties under this Agreement, it shall deliver to Seller
at or prior to Closing an instrument of assignment and assumption evidencing
such assignment and delegation. In addition, Purchaser shall provide Seller with
copies of all Transfer documentation, certified by Purchaser to be true,
correct, and complete, and with all other information which Seller may
reasonably request. No transfer, whether with or without Seller’s consent: (i)
shall operate to release Purchaser or alter Purchaser’s primary liability to
perform the obligations of Purchaser under this Agreement or (ii) shall cause
Seller to incur any cost or other economic detriment in connection with such
Transfer. Purchaser shall pay any and all additional costs and expenses
(including, without limitation, reasonable attorneys’ fees, charges, and
disbursements) incurred by Seller that would not otherwise have been incurred by
Seller had Purchaser not caused a Transfer.

 

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(k)    Estoppel
Certificate for Ground Lease. Seller
agrees to use commercially reasonable efforts to obtain an estoppel certificate
from the landlord under the Ground Lease. It is understood that the failure to
provide an estoppel certificate with respect to the Ground Lease is not a
condition precedent to the Closing and shall not entitle Purchaser to terminate
this Agreement or defer the Closing Date or seek any other remedy.

(l)    General.
Time is
of the essence in the performance of the respective Obligations of Seller and
Purchaser. This Agreement may be executed in any number of counterparts, each of
which shall constitute an original but all of which, taken together, shall
constitute but one and the same instrument. This Agreement (including all
exhibits) contains the entire agreement between the parties with respect to the
subject matter hereof, supersedes all prior letters of intent, understandings,
or other agreement, whether written or oral, if any, with respect thereto and
may not be amended, supplemented, or terminated, nor shall any Obligation
hereunder or condition hereof be deemed waived, except by a written instrument
to such effect signed by the party to be charged. This Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts. The warranties, representations, agreements, and undertakings
contained herein shall not be deemed to have been made for the benefit of any
person or entity, other than the parties hereto and their permitted successors
and assigns. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective permitted successors and
assigns.

- 31
-

 

ARTICLE
XV

DEFAULTS
AND REMEDIES

 

15.01
Seller’s
Remedies. IF
PURCHASER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT FOR ANY REASON
EXCEPT SELLER DEFAULT, SELLER SHALL BE ENTITLED AS ITS SOLE REMEDY TO TERMINATE
THIS AGREEMENT AND RECOVER THE EARNEST MONEY AS LIQUIDATED DAMAGES AND NOT AS A
PENALTY, IN FULL SATISFACTION OF ANY CLAIMS AGAINST PURCHASER; PROVIDED,
HOWEVER, THAT THIS PROVISION SHALL NOT LIMIT SELLER’S RIGHTS TO RECEIVE
REIMBURSEMENT FOR COSTS, FEES AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
ATTORNEYS’ FEES AND COSTS) PURSUANT TO SECTION
15.04, BELOW,
IN ADDITION TO THE EARNEST MONEY IN THE EVENT OF A DISPUTE REGARDING THE
DISPOSITION OF THE EARNEST MONEY, NOR SHALL THIS PROVISION BE DEEMED TO WAIVE OR
AFFECT SELLER’S RIGHTS AND PURCHASER’S INDEMNITY OBLIGATIONS UNDER OTHER
SECTIONS OF THIS AGREEMENT. SELLER AND PURCHASER AGREE THAT THE SELLER’S DAMAGES
RESULTING FROM PURCHASER’S DEFAULT ARE DIFFICULT TO DETERMINE AND THE AMOUNT OF
THE EARNEST MONEY IS A FAIR ESTIMATE OF THOSE DAMAGES. 

 

15.02
Purchaser’s
Remedies. If
Seller fails to perform its obligations under this Agreement for any reason
except the failure of any condition precedent to Seller’s obligations under this
Agreement, then Purchaser’s sole remedies shall be: (a) to terminate this
Agreement by giving Seller written notice of such election prior to or at
Closing whereupon (i) the Escrow Company shall promptly return to Purchaser the
Earnest Money (except for the $100,000 paid to Seller at the signing of this
Agreement pursuant to Section
3.01(a)) and the
Additional Earnest Money (if any), and (ii) Purchaser shall be entitled to all
out-of-pocket costs incurred by Purchaser in connection with this transaction in
an amount not to exceed One Hundred Thousand Dollars ($100,000.00); (b) to waive
the default and close; or (c) to seek specific performance of this Agreement
against Seller.

 

15.03
Confidentiality. Unless
the other party specifically and expressly otherwise agrees in writing, each
party hereby agrees that all information regarding the Property or this
transaction, of whatsoever nature made available to it (“Proprietary
Information”) is
confidential and shall not be disclosed to any other person except those
reasonably assisting said party with the transaction, or Purchaser’s lender, if
any (and then only upon Purchaser making such person aware of the
confidentiality restriction and procuring such person’s agreement to be bound
thereby). In the event that the transaction contemplated by this Agreement fails
to close for any reason whatsoever, Purchaser agrees to return to Seller, or
cause to be returned to Seller, all Proprietary Information and Purchaser agrees
not to retain any copy of the Proprietary Information and to instruct all
persons and entities that have received a copy or copies of the Proprietary
Information to immediately destroy the Proprietary Information. Further,
Purchaser agrees not to use or allow to be used any Proprietary Information for
any purpose other than to determine whether to proceed with the transaction
contemplated by this Agreement, or if the same is consummated, in connection
with the operation of the Property post-Closing. Notwithstanding any other
provision of this Agreement, the provisions of this Section
15.03 shall
survive the Closing or the termination of this Agreement.

- 32
-

 

15.04
Attorneys’
Fees.  If any
action or proceeding is commenced by either party to enforce their rights under
this Agreement or to collect damages as a result of the breach of any of the
provisions of this Agreement, the prevailing party in such action or proceeding,
including any bankruptcy, insolvency or appellate proceedings, shall be entitled
to recover all reasonable costs and expenses, including, without limitation,
reasonable attorneys’ fees and court costs, in addition to any other relief
awarded by the court.

 

15.05
No
Reservation of Property. The
preparation and/or delivery of unsigned drafts of this Agreement shall not
create any legally binding rights in the Property and/or obligations of the
parties, and Purchaser and Seller acknowledge that this Agreement shall be of no
effect until it is duly executed by both Purchaser and Seller.

[The
signature page follows]

 

- 33
-

 

IN
WITNESS WHEREOF, the
parties hereto have executed or caused this Agreement to be executed, all as of
the day and year first above written.

 

                SELLER:

WEBSTER
STREET HOTEL, LLC,

a
Delaware limited liability company

	 	
      By:
	
      New
      Castle/ Brookline Hotel, LLC, 

a
Delaware limited liability company, 

its sole
manager

	 	
      By:
	
      Brookline
      Hotel Equity, LLC, 

	 	 	a Delaware limited liability company,

	 	 	its sole manager

                            

	 	
      By:
	
      _____________________________

                PURCHASER:

HERSHA
HOSPITALITY LIMITED PARTNERSHIP,

a
Virginia limited partnership

	 	
      By:
	
      
      _____________________________

 

 

Signature
Page to P&S

 

 

EXHIBIT
“A”

LAND

[ATTACHED]

 

EXHIBIT
"B"

EXCLUDED
ASSETS

Certain
computer programs, operating manuals and materials and other personal property
used in the operation and management of the Hotel consisting of:

 

	 	
      1.
	
      New
      Castle Hotels' Profitsage reporting System;

	 	
      2.
	
      NICE
      Sales Tracking System;

	 	
      3.
	
      Sales
      Report Program;

	 	
      4.
	
      Accounting,
      F&B, Sales, Human Resources, General Managers, and Engineering SOP
      manuals;

	 	
      5.
	
      Employee
      files and all other employee and employee benefit and payroll related
      materials;

	 	
      6.
	
      Insurance
      related files and materials;

	 	
      7.
	
      OSHA
      Logs;

	 	
      8.
	
      Legal
      files;

	 	
      9.
	
      New
      Castle Hotels' Forms; and 

	 	
      10.
	
      Items
      bearing the logo of New Castle Hotels or its
  subsidiaries.

 

 

EXHIBIT
“C”

PERMITTED
EXCEPTIONS

[ATTACHED]

 

 

EXHIBIT
“D”

PENDING
OR THREATENED LITIGATION

1.    The
Hotel is a defendant in a Massachusetts state court action on a mechanics lien
claim arising out of the payment dispute between Suffolk Construction Company
("Suffolk"), the general contractor for construction of the Hotel, and Ostrow
Electrical Company, the electrical subcontractor. The case is captioned
Ostrow
Electrical Co. v. Suffolk Construction Company, Inc., et al., Civil
Docket No: 04-0536, Norfolk County Superior Court. Suffolk has confirmed in
writing that it will defend, indemnify and hold harmless, at its expense, the
Hotel. The Hotel and the other defendants have filed answers to the complaint,
but other activity in the case has been suspended by agreement of the parties
pending settlement discussions. Thus far, those discussions have resulted in
payment by Suffolk and a reduction of the plaintiff's claim from $677,052.26 to
approximately $415,000.00 plus interest and costs. 

2.    September
8, 2004 Notice of Contract in favor of G. Conway, Inc. for $103,629.56 bonded
off on January 26, 2005 by Suffolk. Suffolk has agreed to indemnify Seller with
respect to this matter.

3.    Subsequent
to completion of construction, a water infiltration problem was noted on the
third (lowest) level of parking ("P-3"). Investigation with the assistance of
Simpson Gumphertz & Heger ("SGH"), consulting engineers, revealed that the
P-3 parking slab and waterproofing were not installed in accordance with
construction and contract documents. Suffolk has acknowledged the problem and
has accepted responsibility for correction. Suffolk has been working
cooperatively with Seller and SGH to examine alternative solutions. Both the
responsibility and work product to date will be assigned to Purchaser in order
that the corrective action can be implemented at a time most appropriate to
minimize disruption to hotel operations.

EXHIBIT
“E”

NOTICES
OF VIOLATION

None

 

EXHIBIT
“F”

Page 1 of
_

Record
and Return to:

 

ASSIGNMENT
AND ASSUMPTION OF GROUND LEASE AND IMPROVEMENTS

This
Assignment and Assumption of Ground Lease and Improvements (this “Agreement”) is
made as of _________________, 2005 by and between
___________________, a
________________ (“Assignor”),
having a business address ___________________________, and
______________________________, a
__________________________(“Assignee”),
having an address
_________________________________________________________.

W I T N E S S E T H:

 

LOCUS:

WHEREAS,
by Ground Lease dated __________ (the “Ground
Lease”),
notice of which has been filed with the _______________________ (the
“Registry”) in
Book ___ at Page ____, ______________________ (the “Landlord”) leased
to _____________ (the “Tenant”)
certain
real property located at ______________________ (the “Real
Property”), which
is more particularly described in Exhibit
A attached
hereto;

WHEREAS,
Assignor holds title to the Improvements located on the Real
Property;

WHEREAS,
Assignor and Assignee are parties to a certain Sale and Purchase Agreement dated
as of ______________, 2005 (the “P&S”) with
respect to, inter alia, the
sale and purchase of Assignor’s interest in the Ground Lease and the
Improvements;

WHEREAS,
under the P&S, Assignor agreed to sell all of its right, title, and interest
in and to the Ground Lease and the Improvements to Assignee, and Assignee agreed
to assume prospectively all of Assignor’s obligations and liabilities under the
Ground Lease and with respect to the Improvements; and

WHEREAS,
all capitalized terms used herein but not defined herein shall have the meanings
given them in the P&S;

NOW
THEREFORE, for Ten Dollars ($10.00) and other good and valuable consideration,
the mutual receipt and legal sufficiency of which are hereby acknowledged,
Assignor and Assignee agree as follows:

1.    Assignment
to Assignee.
Effective as of the date hereof, Assignor assigns, transfers, sells, grants,
conveys, and sets over unto Assignee all of Assignor’s right, title, and
interest in, to, and under the Ground Lease and the Improvements, subject in
each case to the Permitted Encumbrances, to have and to hold the same unto
Assignee, its successors and assigns, subject to the terms, covenants, and
conditions contained in the Ground Lease. Assignor shall remain liable for all
of Assignor’s obligations under the Ground Lease that have accrued prior to the
date hereof, other than those with respect to which Assignor is released or
otherwise held harmless under the P&S. 

 

2.    Assumption
by Assignee.
Assignee accepts the assignment, transfer, sale, grant and conveyance of the
Ground Lease and the Improvements from Assignor and assumes and agrees to
observe and perform all of the obligations, terms, covenants, and conditions of
the Ground Lease accruing on or after the date hereof, that are to be observed
or performed by Assignor thereunder. This covenant of assumption is intended to
satisfy the requirements of Section Seventeen D of the Ground Lease.

3.    Indemnity.

(a)    Assignor
shall indemnify, defend and hold Assignee and its Indemnitees harmless against
all claims, suits, obligations, liabilities, damages, losses, costs, and
expenses, including without limitation, reasonable attorneys’ fees and
disbursements, based upon, arising out of, or resulting from Assignor’s breach
of the terms and provisions of the Ground Lease occurring prior to the Closing
Date.

(b)    Assignee
shall indemnify and hold Assignor and its Indemnitees harmless against all
claims, suits, obligations, liabilities, damages, losses, costs, and expenses,
including, without limitation, reasonable attorneys’ fees and disbursements,
based upon, arising out of, or resulting from Assignee’s breach of the terms and
provisions of the Ground Lease occurring on or after the Closing
Date.

4.    Disclaimer.
Assignee
acknowledges that Assignor has not made and does not make any representations or
warranties of any kind whatsoever, oral or written, express or implied, with
respect to any of the Ground Lease and the Improvements. In addition, and
notwithstanding anything contained in this Assignment to the contrary, this
Assignment is subject to all disclaimers and qualifications by Assignor and all
encumbrances set forth in the P&S with respect to the Ground Lease and the
Improvements, including, without limitation, those set forth in Section
2.02, and all
such disclaimers, qualifications, and encumbrances are hereby incorporated into
this Agreement by reference and made a part of this Assignment.

5.    Miscellaneous. This
Agreement shall be binding upon and enforceable against, and shall inure to the
benefit of, Assignor and Assignee and their respective successors and assigns.
This Agreement shall be governed by, construed under, and interpreted and
enforced in accordance with, the laws of The Commonwealth of Massachusetts. This
Agreement may be executed in several counterparts, each of which will be deemed
an original, and all of such counterparts together shall constitute one and the
same instrument. 

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

ASSIGNOR

________________________

By:_____________________

Name:

Title:

ASSIGNEE

________________________

By:_____________________

Name:

Title:

 

COMMONWEALTH
OF MASSACHUSETTS

_________________,
ss.

On this
___ day of __________, 2005, before me, the undersigned notary public,
personally appeared _________________, who proved to me through satisfactory
evidence of identification, which was __________________________, to be the
person whose name is signed on the preceding or attached document, and he
acknowledged to me that he signed it as _____________ of __________________,
voluntarily for its stated purpose.

	
      ______________________________

	
      Notary
      Public

	
      My
      commission expires on:

	
      [AFFIX/IMPRINT
      NOTARIAL SEAL]

COMMONWEALTH
OF MASSACHUSETTS

_________________,
ss.

On this
___ day of __________, 2005, before me, the undersigned notary public,
personally appeared _________________, who proved to me through satisfactory
evidence of identification, which was __________________________, to be the
person whose name is signed on the preceding or attached document, and he
acknowledged to me that he signed it as _____________ of __________________,
voluntarily for its stated purpose.

	
      ______________________________

	
      Notary
      Public

	
      My
      commission expires on:

	
      [AFFIX/IMPRINT
      NOTARIAL SEAL]

 

 

Exhibit
A 

to

Exhibit
"F"

Legal
Description 

EXHIBIT
“G”

BILL
OF SALE

THIS BILL
OF SALE (“Bill of Sale”) is made as of ____________, 2005 by and between
_______________, a ________________ (“Seller”), and ________________________, a
____________________ (“Purchaser”). 

W I T N E S S E T H:

WHEREAS,
Assignor and Assignee are parties to a certain Sale and Purchase Agreement dated
as of ______________, 2005 (the “P&S”) with
respect to, inter alia, the
sale and purchase of Assignor’s interest in the Fixtures
and Tangible Personal Property, Documents, Consumables, Inventory, and Operating
Equipment, not including Excluded Assets and subject in each case to the
Permitted Exceptions (the "Personal Property");

WHEREAS,
under the P&S, Assignor agreed to sell all of its right, title, and interest
in and to the Personal
Property to
Assignee; and

WHEREAS,
all capitalized terms used herein but not defined herein shall have the meanings
given them in the P&S;

NOW
THEREFORE, for Ten Dollars ($10.00) and other good and valuable consideration,
the mutual receipt and legal sufficiency of which are hereby acknowledged,
Seller and Purchaser agree as follows:

1.    Sale
to Assignee. Seller
does hereby sell, assign, transfer, grant, convey and set over unto Purchaser
all of its right, title, and interest in, to, and under the Personal Property to
have and to hold the same unto Purchaser, its legal representatives, successors
and assigns, forever. 

2.    Disclaimer. Seller
makes no warranty (express or implied) as to the condition of the Personal
Property or its merchantability or fitness for a particular purpose. In
addition, and notwithstanding anything contained in this Bill of Sale to the
contrary, this Bill of Sale is subject to all disclaimers and qualifications by
Seller and all encumbrances set forth in the P&S with respect to said
Personal Property, including, without limitation, those set forth in
Section
2.02, and all
such disclaimers, qualifications, and encumbrances are hereby incorporated in
this Bill of Sale by reference and made a part of this Bill of Sale. By its
acceptance of this Bill of Sale, Purchaser acknowledges that it has fully
inspected the Personal Property and accepts the same in its present use and
"AS-IS" condition.

3.    Miscellaneous. This
Bill of Sale shall be binding upon and enforceable against, and shall inure to
the benefit of, Seller and Purchaser and their respective successors and
assigns. This Bill of Sale shall be governed by, construed under, and
interpreted and enforced in accordance with, the laws of The Commonwealth of
Massachusetts. This Bill of Sale may be executed in several counterparts, each
of which will be deemed an original, and all of such counterparts together shall
constitute one and the same instrument.

[Signature
Page Follows]

 

 

IN
WITNESS WHEREOF, Seller has executed this Bill of Sale, as a sealed instrument,
as of the date first above written.

	
      SELLER:
      

	 
	
       

	 
	
      By:
	
       

	
      ACCEPTED:

	 
	
      PURCHASER:

	 
	
      By:
	
       

 

EXHIBIT
“H”

ASSIGNMENT
AND ASSUMPTION OF HOTEL CONTRACTS,

BOOKINGS,
PERMITS AND MISCELLANEOUS HOTEL ASSETS

 

This
Assignment and Assumption of Hotel Contracts, Bookings, Permits and
Miscellaneous Hotel Assets (this "Agreement") is made as of _______________,
2005 by and between __________________________, a ____________________
(“Assignor”) and __________________________, a ____________________
(“Assignee”).

W I T N E S S E T H:

WHEREAS,
Assignor and Assignee are parties to a certain Sale and Purchase Agreement dated
as of ______________, 2005 (the “P&S”) with
respect to, inter alia, the
sale and purchase of Assignor’s interest in the Hotel
Contracts, Bookings, Permits (except Excluded Permits) and Miscellaneous Hotel
Assets (collectively,
the "Assigned Assets");

WHEREAS,
under the P&S, Assignor agreed to sell all of its right, title, and interest
in and to the Assigned Assets to Assignee, and Assignee agreed to assume
prospectively all of Assignor’s obligations and liabilities with respect to the
Assigned Assets;
and

WHEREAS,
all capitalized terms used herein but not defined herein shall have the meanings
given them in the P&S;

NOW
THEREFORE, for Ten Dollars ($10.00) and other good and valuable consideration,
the mutual receipt and legal sufficiency of which are hereby acknowledged,
Assignor and Assignee agree as follows:

1.    Assignment
to Assignee.
Effective as of the date hereof, Assignor does hereby sell, assign, transfer,
grant, convey and set over unto Assignee all of its right, title, and interest
in, to, and under the Assigned Assets to have and to hold the same unto
Assignee, its legal representatives, successors and assigns,
forever.

2.    Assumption
by Assignee.
Assignee does hereby accept the sale, assignment, transfer, grant and conveyance
of the Assigned Assets and hereby assumes and agrees to observe and perform all
of the obligations, terms, covenants and conditions of the Assigned Assets
accruing after the date hereof. 

3.    Indemnity.

(b)    Assignor
shall indemnify, defend and hold Assignee and its Indemnitees harmless against
all claims, suits, obligations, liabilities, damages, losses, costs, and
expenses, including without limitation, reasonable attorneys’ fees and
disbursements, based upon, arising out of, or resulting from Assignor’s breach
of the terms and provisions of the Assigned Assets occurring prior to the
Closing Date.

 

(b)    Assignee
shall indemnify and hold Assignor and its Indemnitees harmless against all
claims, suits, obligations, liabilities, damages, losses, costs, and expenses,
including, without limitation, reasonable attorneys’ fees and disbursements,
based upon, arising out of, or resulting from Assignee’s breach of the terms and
provisions of the Assigned Assets occurring on or after the Closing
Date.

4.    Disclaimer.
Assignee
acknowledges that Assignor has not made and does not make any representations or
warranties of any kind whatsoever, oral or written, express or implied, with
respect to any of the Assigned Assets. In addition, and notwithstanding anything
contained in this Assignment to the contrary, this Assignment is subject to all
disclaimers and qualifications by Assignor and all encumbrances set forth in the
P&S with respect to the Assigned Assets, including, without limitation,
those set forth in Section
2.02, and all
such disclaimers, qualifications, and encumbrances are hereby incorporated into
this Agreement by reference and made a part of this Assignment.

5.    Miscellaneous. This
Agreement shall be binding upon and enforceable against, and shall inure to the
benefit of, Assignor and Assignee and their respective successors and assigns.
This Agreement shall be governed by, construed under, and interpreted and
enforced in accordance with, the laws of The Commonwealth of Massachusetts. This
Agreement may be executed in several counterparts, each of which will be deemed
an original, and all of such counterparts together shall constitute one and the
same instrument. 

[Signature
Page Follows]

 

 

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

 

ASSIGNOR

________________________

By:_____________________

Name:

Title:

ASSIGNEE

________________________

By:_____________________

Name:

Title:

 

EXHIBIT
“I”

CERTIFICATION
OF NON-FOREIGN STATUS

Section
1445 of the Internal Revenue Code provides that a transferee of a United States
real property interest must withhold the tax if the transferor is a foreign
person. To inform the transferee, __________________ (“Transferee”) that
withholding of tax is not required upon the disposition of a United States real
property interest by ________________ (“Transferor”) and with the knowledge that
the Transferee will rely upon the following statements, the undersigned hereby
certifies the following on behalf of Transferor:

1.    Transferor is
not a foreign corporation, foreign partnership, foreign trust, foreign estate,
or foreign person (as those terms are defined in the Internal Revenue Code and
Income Tax Regulations);

2.    Transferor’s
United States employer identification number/social security number is
___-______________; and

3.    Transferor’s
office address is _________________________________________.

Transferor
understands that this certification may be disclosed to the Internal Revenue
Service by Transferee and that any false statement contained herein could be
punished by fine, imprisonment, or both.

Under
penalties of perjury, I declare that I have examined this Certification and to
the best of my knowledge and belief it is true, correct and complete, and I
further declare that I have authority to sign this document on behalf of
Transferor.

Dated:
________, 2005

 

TRANSFEROR:

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