Hersha Hospitality 8-K 5-13-2005

0001015402-05-002693.txt : 20050519 0001015402-05-002693.hdr.sgml : 20050519 20050519170820 ACCESSION NUMBER: 0001015402-05-002693 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050513 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050519 DATE AS OF CHANGE: 20050519 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HERSHA HOSPITALITY TRUST CENTRAL INDEX KEY: 0001063344 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 251811499 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14765 FILM NUMBER: 05845602 BUSINESS ADDRESS: STREET 1: 148 SHERATON DRIVE, BOX A CITY: NEW CUMBERLAND STATE: PA ZIP: 17070 BUSINESS PHONE: 7177702405 8-K 1 body.htm HERSHA HOSPITALITY 8-K 5-13-2005 Hersha Hospitality 8-K 5-13-2005

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 13, 2005

HERSHA HOSPITALITY TRUST

(Exact name of registrant as specified in its charter)

Maryland		001-14765		251811499
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

510 Walnut Street, 9^th Floor

Philadelphia, Pennsylvania 19106

(Address and zip code of

principal executive offices)

Registrant’s telephone number, including area code: (215) 238-1046

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o	Pre-commencement communications pursuant to Rule 13e4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01

Entry into a Material Definitive Agreement.

On May 13, 2005, Metro Two Hotel, LLC, a Florida limited liability company (“Metro Two”), which is 100% owned by Hersha Hospitality Limited Partnership (“HHLP”), the operating partnership subsidiary of Hersha Hospitality Trust (“HT”) entered into an agreement to sell the land, improvements and certain personal property (the “Holiday Inn Property”) of the Holiday Inn Express Hotel situated at 3805 Hunters Point Avenue, Long Island City, New York.

Also on May 13, 2005, in a separate transaction, 5544 JFK III Associates, a Pennsylvania limited partnership (“JFK”), which is 99% owned by HHLP and 1% owned by Hersha Hospitality LLC, as general partner, which is 100% owned by HHLP, entered into an agreement to sell the land, improvements and certain personal property (the “Doubletree Property”) of the Doubletree Club Hotel in the City of Jamaica, New York.

During 2004, HT’s Board of Trustees authorized management of HT to sell the Holiday Inn Property and the Doubletree Property, which were under non-binding letters of intent as of December 31, 2004. In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” both of these hotels were classified as “held for sale” on HT’s consolidated balance sheet as of December 31, 2004 in HT’s Annual Report on Form 10-K for the year ended December 31, 2004 and HT’s consolidated balance sheet as of March 31, 2005 in HT’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005. In addition, the operating results for these hotels were reclassified to discontinued operations in the statements of operations for the years ended December 31, 2004, 2003 and 2002 in HT’s Annual Report on Form 10-K for the year ended December 31, 2004 and in the statements of operations for the quarters ended March 31, 2005 and 2004 in HT’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005.

Agreement to Sell Holiday Inn Express, Long Island City, New York

Metro Two entered into an Agreement of Purchase and Sale (the “Holiday Inn Agreement”) with CNR Queens Hospitality, LLC, a New York limited liability company (“CNR”), in connection with the sale of the Holiday Inn Property. The Holiday Inn Agreement provides that CNR will purchase the Holiday Inn Property for a purchase price of approximately $9,000,000. HHLP has agreed to indemnify CNR for certain liabilities for a period of twelve months after the closing. The sale of the Holiday Inn Property to CNR closed on May 13, 2005. A copy of the Holiday Inn Agreement is attached hereto as Exhibit 10.1.

Agreement to Sell Doubletree Club Hotel, Jamaica, New York

JFK entered into a Purchase and Sale Agreement (the “Doubletree Agreement”) with Metro Sai Hospitality L.L.C., a New York limited liability company (“Metro Sai”), in connection with the sale of the Doubletree Property. The Doubletree Agreement provides that Metro Sai will purchase the Doubletree Property for a purchase price of approximately $11,500,000. The sale of the Doubletree Property to Metro Sai closed on May 13, 2005. A copy of the Doubletree Agreement is attached hereto as Exhibit 10.2.

Item 2.01

Completion of Acquisition or Disposition of Assets.

On May 13, 2005, the sales of the Holiday Inn Property and the Doubletree Property were completed. The description of each transaction included under Item 1.01 above is incorporated under this Item 2.01.

Item 9.01

Financial Statements and Exhibits.

(b)

Pro Forma Financial Information

Pro Forma Consolidated Financial Statements

The following unaudited pro forma consolidated balance sheet as of March 31, 2005 give effect to the sale of the Holiday Inn Property and the Doubletree Property as described above for the periods stated. The pro forma consolidated financial statements have been prepared by management of HT based upon the historical financial statements of HT and the adjustments and assumptions in the accompanying notes to the pro forma consolidated financial statements. The pro forma consolidated balance sheet sets forth the effect of HT’s sale of the Holiday Inn Property and Doubletree Property as if the entire purchase had been consummated on March 31, 2005.

Because the effects of the sale of the Holiday Inn Property and Doubletree Property were already reflected in all items comprising income from continuing operations in HT’s consolidated statements of income for the year ended December 31, 2004 and three months ended March 31, 2005, separate pro forma consolidated income statements are not provided herein.

These pro forma consolidated financial statements may not be indicative of the results that actually would have occurred if the transactions had occurred on the dates indicated or which may be obtained in the future. The pro forma consolidated financial statements should be read in conjunction with the consolidated financial statements and notes of HT included in its annual report on Form 10-K for the year ended December 31, 2004, as amended, and the interim financial statements and notes of HT included in its quarterly report on Form 10-Q for the quarter ended March 31, 2005.

HERSHA HOSPITALITY TRUST AND SUBSIDIARIES

PRO FORMA CONSOLIDATED BALANCE SHEET

March 31, 2005

(Unaudited)

[in thousands, except share amounts]


				Pro Forma
				Adjustments
	Historical			(a-g)				Pro Forma
Assets:
Cash and cash equivalents	$	6,097		$	5,594		(a)	$	11,691
Investment in Hotel Properties, net
of Accumulated Depreciation		171,990							171,990
Assets Held for Sale		18,806			(18,806	)	(b)		-
Notes Receivable - Related Party		14,084							14,084
Notes Receivable		56			1,700		(c)		1,756
Escrow Deposits		2,368							2,368
Accounts Receivable		2,184							2,184
Deferred Costs, net of Accumulated Amortization of $1,173		1,835							1,835
Due from Related Party		27,849							27,849
Investment in Joint Ventures		8,725							8,725
Other Assets		2,273			(16	)	(d)		2,257
Total Assets	$	256,267		$	(11,528	)		$	244,739

Liabilities and Shareholders’ Equity:
Mortgages Payable	$	97,395		$	-			$	97,395
Debt Related to Assets Held for Sale		12,952			(12,952	)	(e)		-
Line of Credit		400							400
Capital Lease Payable		429							429
Advance Deposits		223							223
Dividends and Distributions Payable		4,164							4,164
Due to Related Party		866							866
Interest Rate Derivative		104							104
Accounts Payable and Accrued Expenses		6,221			(42	)	(f)		6,179
Total Liabilities		122,754			(12,994	)			109,760

COMMITMENTS AND CONTINGENCIES		-							-

Minority Interest:
Joint Venture Interest in Logan Hospitality		2,043							2,043
Common Units		16,131							16,131
Series A Preferred Units		-							-

Total Minority Interest		18,174							18,174

Shareholders’ Equity:

Preferred Shares - Series A, $.01 Par Value, 350,000 Shares Authorized, None Issued and Outstanding		-			-				-

Common Shares - Priority Class A, $.01 Par Value, 50,000,000 Shares Authorized, 20,292,631 Shares Issued and Outstanding at March 31, 2005		203			-				203

Common Shares - Class B, $.01 Par Value, 50,000,000 Shares Authorized, None Issued and Outstanding		-							-
Additional Paid-in Capital		135,343			1,466		(g)		136,809
Other Comprehensive Income (Loss)		231							231
Distributions in Excess of Net Earnings		(20,438	)						(20,438	)
Total Shareholders' Equity		115,339			1,466				116,805
Total Liabilities and Shareholders’ Equity	$	256,267		$	(11,528	)		$	244,739

Notes to Consolidated Pro Forma Financial Information

1. On May 13, 2004, Metro Two Hotel, LLC, a Florida limited liability company (“Metro Two”), which is 100% owned by Hersha Hospitality Limited Partnership (“HHLP”), the operating partnership subsidiary of Hersha Hospitality Trust (“HT”) sold the Holiday Inn Express Hotel situated at 3805 Hunters Point Avenue, Long Island City, New York to CNR Queens Hospitality, LLC, a New York limited liability company (“CNR”) for $9,000,000.

2. Also on May 13, 2005, in a separate transaction, 5544 JFK III Associates, a Pennsylvania limited partnership (“JFK”), which is 99% owned by HHLP and 1% owned by Hersha Hospitality LLC, as general partner, which is 100% owned by HHLP, sold the Doubletree Club Hotel in the City of Jamaica, New York to Metro Sai Hospitality L.L.C., a New York limited liability company (“Metro Sai”), in connection with the sale of the Doubletree Property. The Doubletree Agreement provides that Metro Sai will purchase the Doubletree Property for a purchase price of approximately $11,500,000.

3. During 2004, HT’s Board of Trustees authorized management of HT to sell the Holiday Inn Property and the Doubletree Property, which were under non-binding letters of intent as of December 31, 2004. In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” both of these hotels were classified as “held for sale” on HT’s consolidated balance sheet as of December 31, 2004 in HT’s Annual Report on Form 10-K for the year ended December 31, 2004 and HT’s consolidated balance sheet as of March 31, 2005 in HT’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005. In addition, the operating results for these hotels were reclassified to discontinued operations in the statements of operations for the years ended December 31, 2004, 2003 and 2002 in HT’s Annual Report on Form 10-K for the year ended December 31, 2004 and in the statements of operations for the quarters ended March 31, 2005 and 2004 in HT’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005.

4. The pro forma adjustments to the Consolidated Balance Sheet as of March 31, 2005 set forth the effects of HT’s sale of the Holiday Inn Property and Doubletree Property as if they had been consummated on March 31, 2005. The adjustments include the following:

(a) Adjustment to reflect an increase in Cash of $5,594 related to the receipt of $8,985 less $5,042 for the repayment of debt from the sale of the Holiday Inn Property and $1,699 received from the sale of the Doubletree Property. This cash balance was further reduced by $48 of principal payments made between March 31, 2005 and the closing date.

(b) Adjustment to reflect decrease in Assets Held for Sale, which consisted of the following at March 31, 2005.

Assets Held for Sale:	03/31/05

Land	$	3,050
Buildings and improvements		15,116
Furniture, fixtures and equipment		2,078

		20,244
Less accumulated depreciation		1,438

	$	18,806

(c) Adjustment of $1,700 to reflect an increase in Notes Receivable for the seller financing provided for the sale of the Doubletree Property.

(d) Adjustment to reflect a decrease in Other Assets related to the assumption of Other Assets by the buyer of $5 in connection with the sale of the Holiday Inn Property and $11 in connection with the sale of the Doubletree Property.

(e) Adjustment to reflect a decrease in Debt Related to Assets Held for Sale of $12,952 related to the repayment of $5,024 in debt in connection with the sale of the Holiday Inn Property and the assumption of $7,928 in debt in connection with the sale of the Doubletree Property.

(f) Adjustment to reflect a decrease in Accounts Payable related to $42 of accounts payable assumed by the buyer of the Doubletree Property.

(g) Adjustment to increase Additional Paid in Capital to reflect the gain on sale of the Holiday Inn Property and Doubletree Property of $1,466.

5. There were no adjustments to any items on the Statement of Operations in calculating the Income from Continuing Operations due to the fact that the sold properties were reflected in discounted operations. Therefore, a pro forma Consolidated Statement of Operations has not been presented for the year ended December 31, 2004 and the three months ended March 31, 2005. The gain on sale of assets of $1,466 is a material non-recurring item and is not included in Income from Continued Operations. This gain on sale of assets would have resulted in Net Income of $2,306 and $472 for the year ended December 31, 2004 and the three months ended March 31, 2005, respectively.

(c)

Exhibits.

Exhibit 10.1

Agreement of Purchase and Sale, dated as of May 13, 2005, by and between Metro Two Hotel, LLC and CNR Queens Hospitality, LLC.

Exhibit 10.2

Purchase and Sale Agreement, dated as of May 13, 2005, by and between 5544 JFK III Associates and Metro Sai Hospitality L.L.C.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	HERSHA HOSPITALITY TRUST



Date: May 18, 2005	By:	/s/	Ashish R. Parikh
			Ashish R. Parikh
			Chief Financial Officer

EXHIBIT INDEX

Exhibit		Description


10.1		Agreement of Purchase and Sale, dated as of May 13, 2005, by and between Metro Two Hotel, LLC and CNR Queens Hospitality, LLC.


10.2		Purchase and Sale Agreement, dated as of May 13, 2005, by and between 5544 JFK III Associates and Metro Sai Hospitality L.L.C.

EX-10.1 2 ex10_1.htm EXHIBIT 10.1 Exhibit 10.1

Exhibit 10.1

AGREEMENT OF PURCHASE AND SALE

by and between

METRO TWO HOTEL, LLC (the “Seller”)

and

CNR QUEENS HOSPITALITY, LLC

(the “Buyer”)

AGREEMENT OF PURCHASE AND SALE

THIS AGREEMENT OF PURCHASE AND SALE (the “Agreement”) is made and entered into as of the 13th day of May, 2005 (“Effective Date”), by and between METRO TWO HOTEL, LLC, a Florida limited liability company (the “Seller”), and CNR QUEENS HOSPITALITY, LLC, a New York limited liability company (the “Buyer”).

BACKGROUND

WHEREAS, Seller is the owner in fee simple of certain land situate at 3805 Hunters Point Avenue, Long Island City, New York, being more particularly described in Exhibit A attached hereto (the “Land”); and

WHEREAS, Seller is also the owner of the Improvements (as hereinafter defined) erected on the Land, including but not limited to a Holiday Inn Express hotel containing seventy nine (79) guest rooms and related improvements (the “Holiday Inn”); and

WHEREAS, Seller desires to sell and Buyer desires to purchase all of Seller’s right, title and interest in and to the Land, the Improvements and certain other assets and property used in the operation thereof under the terms and conditions hereinafter set forth.

NOW THEREFORE, in consideration of the covenants and provisions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

1. Agreement to Sell and Purchase.

(a) Sale and Purchase. Seller hereby agrees to sell to Buyer, and Buyer hereby agrees to purchase from Seller, subject to the terms and conditions of this Agreement, the following:

(i) All right, title and interest, legal and equitable, of Seller or any other person or entity in and to the Land, and the buildings and improvements situate thereon on the date hereof (the “Improvements”), and all right, title and interest in all easements, rights-of-way, licenses, privileges, hereditaments and appurtenances, if any, belonging to or inuring to the benefit of the Land or Improvements, and all right, title and interest of Seller or any other person or entity in and to any land lying in the bed of any highway, street, road or avenue, opened or proposed, in front of, abutting or adjoining the Land (collectively, along with the Land and Improvements, the “Real Property”); and

(ii) All of the assets or other personal property of any nature whatsoever located upon the Land or upon or in the Improvements, and/or used or held for use or associated with the ownership and/or operation of the Holiday Inn, including, without limitation, all fixtures, machinery, equipment, building supplies, food and liquor supplies, appliances, bar and restaurant supplies, furniture, furnishings, linens, uniforms, room supplies and maintenance and repair supplies (including, without limitation, that which is described on Exhibit B attached hereto and made a part hereof), all leases, agreements and other contracts which Buyer shall assume as hereafter set forth, all building plans and surveys of the Real Property, all books and records (including, without limitation, computer software), all procedure and employment manuals, all marketing materials, and all of Seller’s or any other person’s or entity’s right, title and interest in and to any intangible personal property useful in connection with the foregoing, expressly excluding the name “Holiday Inn", and all trademarks used by Seller in connection with the operation of the Holiday Inn, and including, without limitation, all warranties, and all occupancy certificates, licenses, permits, variances and land use entitlements, authorizations and approvals required by law or issued by governmental entities having jurisdiction over the Holiday Inn (collectively, the “Personal Property” and together with the Real Property, hereinafter referred to as the “Property”).

(b) No Liabilities. It is expressly acknowledged and agreed by Seller that Buyer has no intention of assuming, and does not and will not, in any way, assume, undertake, agree to perform or accept responsibility for any debts, liabilities or obligations of Seller of any kind whatsoever, whether absolute, contingent or otherwise, known or unknown, pending or threatened, concerning the Property or otherwise, other than liabilities and obligations of Seller arising under the Assigned Contracts (as defined in Section 5(f) hereof) after the date of Closing. Seller shall remain fully and solely responsible for the satisfaction of all of Seller’s own liabilities and obligations, absolute, contingent or otherwise, known or unknown, liquidated or unliquidated, pending or threatened, whether incurred before or after the date of Closing, except for such liabilities and obligations arising under the Assigned Contracts after Closing. Such liabilities and obligations which Seller shall remain responsible for include, without limitation, any liabilities or obligations of Seller arising prior to Closing for trade payables or employee compensation, sums due under Contracts (as defined in Section 5(f) hereof), other than Assigned Contracts, prior to or after Closing, sums due under Assigned Contracts arising prior to Closing, sums due on account of taxes of any kind owed by Seller or imposed with respect to the Property or the operation of the Holiday Inn prior to Closing, liabilities for personal injury, property damage or other damages arising prior to Closing, liabilities arising by reason of any statute, law or regulation applicable to Seller or Seller’s operation of the Property, and all other liabilities or obligations arising by any other reason out of the operation of the Holiday Inn prior to Closing. Seller shall indemnify, defend and hold Buyer harmless from and against any and all damages, liabilities, costs and expenses (including, without limitation, attorneys’ fees and expenses) which arise out of the assertion against Buyer or the Property of any such liabilities or obligations of Seller, or Seller’s failure to fulfill any such obligations. The terms of this Section 1(b) shall survive Closing.

(c) No Employees Seller acknowledges and agrees that Buyer shall have no obligation to employ or retain, in any capacity, employees employed or subcontractors engaged by Seller except for contractors who are parties to the Assigned Contracts. Notwithstanding the foregoing, should Buyer desire to employ or retain, in any capacity, any of Seller’s employees, Seller shall use its best efforts to facilitate the transfer to Buyer of such employees. The terms of this Section 1(c) shall survive Closing.

2. Purchase Price. The aggregate purchase price for the Property (the “Purchase Price”) shall be the sum of Nine Million Dollars ($9,000,000), which, subject to the terms and conditions hereinafter set forth, shall be paid or delivered to Seller by Buyer as follows:

(a) Deposit. Within one (1) business day after the date when Buyer receives from Seller a fully executed copy of this Agreement (“Effective Date”), Buyer shall deliver to the Title Company (as hereinafter defined) Buyer’s check in the amount of $200,000 (the “Deposit”)

(b) Cash Portion The balance of the Purchase Price, plus or minus any net cash adjustments made pursuant to this Agreement, shall be paid, at Buyer's option, in cash, by wire transfer, or by a bank, certified or cashier's check, at Closing, subject to the provisions of Section 2A below. Prorations and other adjustments to be made under this Agreement shall be “netted” against each other and shall be accounted for as an adjustment to the cash portion of the Purchase Price.

(d) Allocation of Purchase Price. Within thirty (30) days after the Effective Date, the Purchase Price shall be allocated by Seller and Buyer between the Real Property and Personal Property. In addition, during such Inspection Period (as defined in Section 10(a) hereof), the parties shall agree to allocate the Purchase Price for the Personal Property among various subcategories, such as furniture, fixtures and equipment, intangibles, goodwill and similar items. Seller and Buyer shall report the transactions contemplated herein for tax and all other purposes in accordance with the allocations made by Seller and Buyer.

(e) The Title Company shall be responsible solely for the safekeeping of the Deposit. The Title Company shall not be liable to the Seller or the Buyer for the performance or non-performance of any term of this Agreement by the Seller or the Buyer, and shall not be required to determine any questions of fact or law. If litigation is commenced involving the Deposit or this Agreement, the Title Company shall have the right to deposit the Deposit with the clerk of the court in which litigation is pending, or if the Title Company is a party to such litigation, to interplead all interested parties in any court of competent jurisdiction and deposit the Deposit with the clerk of such court.

2A. Compliance with New York State Sales and Use Tax Law.

(a) Notice to Buyer. In accordance with applicable New York State Sales and Use Tax Laws, Seller is delivering to Buyer the “Notice to Prospective Purchasers of a Business or Business Assets” which is attached hereto as Exhibit “E”.

(b) Notification of Department of Taxation and Finance. Within ten (10) days after the Effective Date, Seller shall deliver to Buyer all information needed by Buyer to provide notification of this transaction to the New York State Department of Taxation and Finance (the “Tax Department”), pursuant to Section 1141(c) Article 28 of the New York State Sales and Use Tax Law. At least ten (10) days prior to the deadline for “Closing” (hereinafter defined), Buyer shall complete and submit to the Tax Department the “Notification of Sale, Transfer or Assignment in Bulk” which is attached hereto as Exhibit “F” (the “Bulk Sales Notice”).

(c) Tax Clearance Certificate and Escrows. Seller and Buyer acknowledge and agree that, as a result of this transaction and in accordance with New York law, Buyer could be held personally liable for any sales taxes owed by Seller, unless, after submission of the Bulk Sales Notice, Buyer withholds the Purchase Price from the Seller until Buyer shall have received from the Tax Department a tax clearance letter and has provided for the escrow of appropriate amounts of the Purchase Price to satisfy outstanding sales taxes or a certificate showing that there are no sales taxes or other amounts due and owing from Seller. Therefore, Seller agrees that (1) if Buyer shall not have received a tax clearance letter or certificate as of the deadline of Closing, Seller shall place in escrow with the “Title Company” (hereinafter defined) the Purchase Price, and (2) if Buyer has received a tax clearance letter from the Tax Department, and such letter recommends or requires the escrow of funds, Seller shall place in escrow with the Title Company (or such other entity as required by the Tax Department) such amounts as recommended or required by the Tax Department to satisfy any sales taxes owed by Seller.

3. Title.

(a) Title to the Real Property as delivered to Buyer at the Closing shall be good and marketable legal and equitable title, free and clear of all liens, restrictions, easements, encumbrances, leases, tenancies (except daily occupancy agreements with hotel guests) and other title objections, except the following: (i) such taxes for the then current year as are not due and payable on the date of the delivery of title; (ii) any liens for municipal betterments assessed after the date of this Agreement; and (iii) easements, restrictions, and rights of way of record described in Exhibit “C” hereto, provided same do not materially interfere with the use of the Property as a hotel, or impose any financial obligations upon the owner thereof (collectively, the “Permitted Exceptions”). In addition, such title shall be insurable under a 1992 ALTA Owner’s Policy, Form B, as aforesaid, without the so-called “creditor’s rights exception”, by any reputable title insurance company at regular rates. Any liens or encumbrances other than the Permitted Exceptions which may be removed as exceptions to the title policy to be issued to Buyer by the payment of money in satisfaction thereof shall be removed, either by being insured over by Buyer’s title insurance company, Lawyers Title Insurance Corporation (“Title Company”) or, if the Title Company will not so insure, then by application of such portion of the Purchase Price as shall be necessary to pay or satisfy the same. Title to the Personal Property shall be good and marketable and free and clear of all liens, security interests and other encumbrances.

(b) All charges for any title insurance policy issued to Buyer shall be paid by Buyer.

(c) Notwithstanding anything to the contrary set forth herein, Buyer and Seller acknowledge and agree that, as of the date hereof, nine (9) liens, as more fully shown on Exhibit “H” attached hereto and incorporated herein by reference (the “Environmental Liens”), have been filed against the Property by the New York City Environmental Control Board. In addition to the obligations of Seller set forth above to cause the removal of the Environmental Liens as exceptions to the title policy to be issued to Buyer, Seller agrees to indemnify, defend and save Buyer, its members, officers, employees, agents, supervisors, attorneys and consultants harmless from any and all claims, suits, demands, fines, liens, causes of action, awards or damages in either law or equity arising out of or caused by the Environmental Liens and any or all matters, occurrences or events which resulted in the imposition of the Environmental Liens filed against the Property, the same to include but not be limited to reasonable attorney fees, consultant’s fees, expert witness fees, and costs incurred by Buyer, its members, officers, employees, agents, supervisors, attorneys and consultants in defending against or removing such claims, suits, demands, fines, liens, causes of action, awards or damages.

4. Closing; Possession. Closing for the sale and purchase of the Property (the “Closing”) shall occur in escrow at the offices of the Title Company, or at such other location as the parties hereto shall mutually agree upon, on a date and at a time agreed to by the parties, but not later than fourteen (14) days after the satisfaction of the conditions set forth in Sections 10(b) and (c) hereof. Notwithstanding anything to the contrary contained herein, at Buyer’s sole option and upon five (5) days written notice to Seller, the Closing shall occur on or before May 13, 2005. At Closing, Seller shall deliver to Buyer possession of the Property, free and clear of the rights of, or possession by, any party (other than daily hotel guests) and in the same condition as on the date hereof (subject to Section 5(e) hereof), reasonable wear and tear excepted.

5. Seller’s Representations and Warranties. Seller covenants, represents and warrants to Buyer as follows:

(a) Litigation. There is no claim, legal action, suit, arbitration, government investigation, condemnation proceeding or eminent domain or other legal or administrative proceeding pending, or to the best of Seller’s knowledge, threatened or anticipated, against or relating to the Property or Seller except a certain personal injury suit instituted by Steven Walsh against Seller as defendant as more particularly described on Exhibit “G” attached hereto.

(b) Financial Statements. To the best of Seller’s knowledge, the financial statements and records with respect to the Property which Buyer has been and will be given to review in connection with a due-diligence inspection thereof are and will be true and correct in all respects and accurately present the financial position and results of operations of Seller and the Property as of the date of such financial statements for the periods covered thereby. Since the date of the most recent financial statements that have been given or will be given to Buyer to review: (i) Seller’s business with respect to the Property has been operated in the ordinary course and there has been no adverse change in its financial condition, assets, liabilities, business, licensure status or prospects and results of operations as such relate to the Property; (ii) Seller has not incurred liabilities or obligations with respect to the Property other than in the regular, ordinary and customary course of the Property’s business; and (iii) the Property has had no strikes or labor disputes.

(c) Tax Liens. No lien exists or can be asserted against the Property because of the failure of Seller or any other party to file any tax return or report or to pay any federal, state or local taxes of any kind, including, but not limited to, income, sales, property, Social Security, employment or withholding taxes, or any assessments, interest, penalties or deficiencies, fees or other governmental charges or impositions. Seller has paid or shall pay prior to Closing any and all taxes, licenses fees and other charges levied, assessed or imposed upon the Property other than those which are not yet due and payable. There are no assessments for public improvements made to the Real Property which remain unpaid.

(d) Intentionally omitted.

(e) Intentionally omitted.

(f) Contracts. There are no development, management, leasing, service, equipment, supply, maintenance or concession agreements with respect to or affecting all or any portion of the Property or the operation or maintenance thereof except as set forth in Exhibit D attached hereto (the “Contracts”). Seller has heretofore delivered or simultaneously herewith delivered to Buyer a current, complete and correct photocopy of each Contract. To Seller’s knowledge, neither Seller nor any of its agents or affiliates is in default under any Contract. Neither Seller nor any of its agents or affiliates has received any notice from any party to any Contract claiming the existence of any default or breach thereunder and no event or omission has occurred that, with the giving of notice or the lapse of time, or both, would constitute a default thereunder. Except as to the Contracts and New Contracts (as defined in Section 7(d) hereof) that either (i) Buyer, in its sole discretion, notifies Seller that Buyer desires to assume prior to or as of the date of Closing, or (ii) must be assumed by Buyer because they run with the Property and which must be assumed by Buyer because they can not be terminated by Seller upon thirty (30) days or fewer prior written notice (the “Assigned Contracts”), Seller shall terminate or cause termination of all Contracts effective as of the Closing, including, without limitation, that certain Management Agreement by and between Seller (and/or its affiliates) and HHMLP - Hunters Point LLC (the “Management Agreement”).

(g) Employees. There is no union or collective bargaining agreement in effect relating to any employee whose job relates to the Property or its operation (each an “Employee” and collectively the “Employees”), and Seller knows of no attempts or efforts to organize any of the Employees. At Closing, Seller shall provide to Buyer a list showing each Employee’s accrued but unpaid wages, salaries, bonuses, accrued vacation and sick pay and other benefits through Closing (the “Employee List”). At Closing, Seller shall pay to Buyer (if such Employees continue to work for Buyer after Closing) or the Employees an amount equal to the wages, salaries and bonuses due to the Employees named on such Employee List through the first shift of the date of Closing (except that wages and salaries of housekeepers for the day of Closing shall be paid by Seller), and an amount equal to the value of accrued vacation, sick pay and other benefits earned by or due to such Employees through 12:01 a.m. on the date of Closing.

(h) True and complete copies of certain documents evidencing and/or securing the Loan (collectively, “Loan Documents”) are described on Exhibit “E” and made a part hereof and have been delivered to Buyer. Seller has not received notice of any default under the Loan Documents, there are no defaults under the Loan Documents, and, to the best of Seller’s knowledge, no conditions exist which with the passage of time or the giving of notice, or both, would constitute a default under the Loan Documents.

The term “affiliate” as used in this Agreement shall mean any person or entity controlling, controlled by or under common control with, directly or indirectly, another person or entity. The representations and warranties of the parties set forth in this Section 5 shall survive the Closing and any termination of this Agreement.

6. “As-Is” Sale. Seller and Buyer acknowledge that the Property is being purchased by Buyer in “as is, where is” condition as of the date hereof, with all faults, and that Seller has made no representation, warranty or agreement, not expressly set forth in this Agreement, with respect to the physical or financial condition of the Property or any portion thereof.

7. Seller’s Operations Pending Closing or Refund.

Seller covenants and agrees that between the date hereof and the earlier of (1) the date of Closing or, (2) if this Agreement is terminated by Buyer for any reason which entitles Buyer to terminate this Agreement pursuant to the terms hereof, the date when the entire Deposit plus interest which has accrued thereon, is returned by Seller to Buyer:

(a) Preserve Assets. Seller shall, at its sole cost and expense, do or cause to be done all things necessary to maintain, repair and preserve the Property in the same condition as it is on the date hereof, normal wear and tear excepted.

(b) Intentionally Omitted.

(c) Access to Records and Property. Seller and its agents shall give Buyer and Buyer’s counsel, accountants, engineers, insurance carriers, lenders and other representatives access to all of Seller’s and its affiliates’ properties, books, accounts, contracts, commitments, licenses, site plans, surveys, records and receipts used or useful in connection with the Property or the operation thereof, and Seller shall furnish Buyer with all such information concerning Seller’s and its affiliates’ affairs with respect to the Property or the operation thereof in Seller’s possession and/or control and as Buyer may reasonably request. Buyer and persons designated by Buyer shall have the right to enter upon the Real Property (interior and exterior) during normal business hours from time to time prior to Closing upon at least twenty-four (24) hours prior notice (which, notwithstanding Section 15(h) hereof, may be verbal) to inspect, test, survey and take test borings and soil samples from the Real Property and for any other purpose relating to the intended acquisition of the Property. Buyer shall indemnify and hold harmless Seller from and against any and all claims relating to physical damage to the Property or personal injuries to third persons arising out of Buyer’s entry upon the Property pursuant to the terms of this Section 7(c).

(d) Conduct of Business; New Contracts. Seller, its affiliates and their respective agents shall conduct operation of the Holiday Inn as currently conducted in the ordinary course of business and no changes shall be made therein. None of Seller, its affiliates or their respective agents shall enter into any contracts or agreements with an aggregate total payment of greater than $5,000 affecting all or any portion of the Property or the operation or maintenance of the Property (“New Contracts”) unless Seller receives written approval from Buyer to enter into such a New Contract. Seller shall notify Buyer immediately of the existence of any such New Contract upon the execution thereof. Seller and its affiliates shall perform when due all of their respective obligations under all Contracts and New Contracts.

(e) Maintenance of Insurance. Seller shall maintain in full force and effect all current insurance policies pertaining to the Property and its operation.

(f) Intentionally omitted.

(g) Intentionally omitted.

The terms of this Section 7 shall survive Closing or the earlier termination of this Agreement by Buyer for a period of six (6) months .

7A. Intentionally Omitted.

8. Provisions with Respect to Closing.

(a) Seller’s Deliveries. At Closing Seller shall deliver or cause to be delivered to Buyer the following, all in form and substance satisfactory to Buyer and Buyer’s counsel:

(i) A bargain and sale deed with covenants (the “Deed”) for the Real Property, duly executed and acknowledged by Seller and all other parties with a legal or equitable interest in title to the Real Property, conveying fee simple title to the Real Property to Buyer;

(ii) A special warranty bill of sale for all of the Personal Property (other than that which is conveyed pursuant to the Assignment and Assumption defined below), duly executed and acknowledged by Seller and all other parties with a legal or equitable interest therein;

(iii) An assignment of all Assigned Contracts (“Assignment and Assumption”) duly executed by Seller and all other parties with a legal or equitable interest therein and the written consent (if required and if Seller is able to obtain prior to Closing) to the assignment by the other party(ies) to each such Assigned Contract, together with the originals of all the Assigned Contracts and such consents that are in Seller’s possession or control, and evidence of the termination of the Management Agreement;

(iv) To the extent in Seller’s or its affiliates’ possession or readily available to Seller or its affiliates, originals of all existing guarantees and warranties issued in connection with the construction, improvement, alteration or repair of the Real Property and in connection with the purchase or repair of any Personalty, originals of all certificates of occupancy, licenses, permits, authorizations, consents and approvals required in connection with the use and occupancy of the Property, and any building plans and surveys concerning the Property in Seller’s or its affiliates’ possession;

(v) To the extent in Seller’s or its affiliates possession or readily available to them, bills for current real estate and ad valorem taxes, sewer charges and assessments, water charges and other utilities, charges under Assigned Contracts, and other costs and expenses attributable to the operation of the Property together with proof of payment thereof (to the extent the same have been paid);

(vi) To the extent in Seller’s or its affiliates possession or readily available to them, all records and files relating to the construction, marketing, management, operation and maintenance of the Property and the Holiday Inn;

(vii) An affidavit from Seller and all other parties with a legal or equitable interest in title to the Real Property, duly executed by them in accordance with the Foreign Investment in Real Property Tax Act stating that each is not a foreign person within the meaning of such Act and that each is not subject to the withholding requirements set forth in such Act;

(viii) An affidavit to Buyer’s Title Company of the type customarily provided by sellers of real property to induce title companies in the Long Island City, New York area to omit or insure over certain “standard” or “preprinted” exceptions to title and to insure Buyer’s title as provided in Section 3, duly executed by Seller and all other parties with a legal or equitable interest in title to the Real Property, together with such other documents as may be required by the Title Company to insure Buyer’s title as aforesaid;

(ix) An affidavit, indemnification agreement or such other agreements as the Buyer’s Title Company may reasonably require in order to remove any exception from Buyer’s title insurance policy as a result of the sale of the Property by Seller constituting a “bulk sale” for New York state tax purposes.

(x) The Employee List described in Section 5(g) hereof;

(xi) All keys to the Property;

(xii) An original of a certificate, duly executed by Seller, stating that Seller’s representations and warranties contained herein are true and correct in all respects as of the date of Closing, such representations and warranties to survive pursuant to such certificate for only a period of six (6) months after Closing;

(xiii) Such transfer tax forms required by law (“Transfer Forms”) duly executed by Seller and all other parties with a legal title to the Real Property;

(xiv) An original of a closing statement setting forth the Purchase Price and all adjustments thereto and other expenses payable by the parties pursuant hereto (the "Closing Statement"), duly executed by Seller and all other parties with a legal or equitable interest in title to the Real Property;

(xv) An assignment or assignments, and such other affidavits and other documents as may be required pursuant to Section 275 of the Real Property Law of the State of New York, as appropriate, in order to provide Buyer’s lender, at Buyer’s option, with an assignment by Seller’s mortgagee of Seller’s mortgage;

(xvi) Evidence of due formation, authorization and good standing of Seller, as well as payment of franchise and other corporate taxes which may become a lien against the Property, as may reasonably be required by the Title Company; and

(xvii) Any other documents required by this Agreement to be delivered by Seller to Buyer or in order to consummate the transactions contemplated hereby.

(b) Buyer’s Deliveries. At Closing Buyer shall deliver or cause to be delivered to Seller the following:

(i) The Assignment and Assumption where-by Buyer assumes the obligations of Seller under the Assigned Contracts accruing on and after the date of Closing, duly executed by Buyer;

(ii) All required Transfer Forms duly executed by Buyer;

(iii) A Closing Statement duly executed by Buyer; and

(iv) Any other documents required by this Agreement to be delivered by Buyer to Seller.

9. Apportionments; Closing Costs.

(a) Apportionments. All apportionments shall be made on the basis of a 30-day month and a 360-day year. Room revenues, real estate taxes, hotel occupancy, guest bed and similar taxes, charges for electricity, water, sewer, gas, fuel oil and other utilities for the Real Property, prepaid charges and other items typically apportioned between purchasers and sellers in similar transactions (including, without limitation, charges under the Assigned Contracts), not otherwise apportioned hereunder, shall be apportioned as of 12:01 a.m. on the date of Closing.

(b) Closing Costs. All realty transfer taxes or documentary stamp taxes and recording charges for the Deed shall be paid by Buyer. Each party shall bear its own counsel fees. Buyer shall pay for its own title insurance, the cost of any survey obtained by Buyer, and the cost of any inspections undertaken by Buyer. All other recording and other closing costs of any nature or description shall be borne or apportioned in accordance with the custom and practice in Long Island City, New York. At Closing, Buyer shall pay to Seller the amounts of the Escrow Accounts, as defined in Section 5(h) hereof.

(c) Prepayments. Seller shall credit the Purchase Price at Closing with the amount of any deposits, security deposits or other sums paid in advance by any guest or customer of the Property, including, without limitation, sums paid on account of services to be provided at the Property after Closing, such as, by way of example, parties and banquets.

(d) Accounts Receivable. Accounts receivable which have accrued as of Closing and which Buyer receives after Closing shall be remitted to Seller promptly after receipt by Buyer. Buyer will use its best efforts to collect such accounts receivable at Seller’s direction, and cooperate with Seller in Seller’s collection efforts; provided, however, that Buyer shall have no obligation to institute suit for collection on Seller’s behalf or to apply proceeds received from account debtors to Seller’s accounts receivable prior to payment of Buyer’s accounts receivable, if any, from such debtors.

(e) Revenues and Expenses Generally. Except as otherwise expressly set forth herein or agreed between the parties, (i) all revenues and expenses resulting from the ownership of the Property, the rendering of services and the operation of the Property prior to Closing shall inure to Seller, and all revenues and expenses resulting from the ownership of the Property, the rendering of services and the operation of the Property received on or after Closing shall inure to Buyer, and (ii) if a party hereto collects an item of revenue which, pursuant to the preceding sentence, properly belongs to another party (“Owning Party”), the collecting party will hold such item as the agent of Owning Party and will promptly remit such item to Owning Party at the earliest possible opportunity.

The terms of this Section 9 shall survive Closing.

10. Conditions Precedent to Performance by Buyer. Buyer’s obligation to consummate the transactions contemplated herein are expressly subject to the satisfaction of the following conditions, provided that all or any part thereof may be expressly waived by Buyer in writing:

(a) Title. Title to the Property shall be as provided in Section 3.

(b) Franchise. Buyer agrees to apply to continue use of the Holiday Inn franchise at the Property, by taking such steps as are necessary for the franchiser of Holiday Inn, Intercontinental Hotels Group, Inc. (“Intercontinental”), to consider Buyer as a franchisee, within fifteen (15) days following the Effective Date. It is a condition of this Agreement that Buyer shall have received approval from Intercontinental to continue the operation of the Property as a Holiday Inn following Buyer’s acquisition thereof with such approval to be in writing and to contain no conditions other than completion of a property improvement plan which details the improvements that need to be made to the Property by Buyer within a specified time period following Buyer’s acquisition of the Property (the “PIP”). Buyer shall use good faith efforts to obtain, and shall diligently pursue, such approval from Intercontinental. If Intercontinental denies Buyer’s application as a franchisee, in writing, Buyer may terminate this Agreement.

(c) Financing. GE Capital Franchise Corporation (“Lender”) has issued a financing proposal to Buyer dated March 29, 2005 in connection with Buyer’s application for a $7,125,000 loan (the “Loan”) from Lender in order for Buyer to finance the purchase of the Property. Buyer has accepted the financing proposal and has delivered the required deposit set forth therein to Lender in order for Lender to proceed with its underwriting process for approval of the Loan. It is a condition of this Agreement that the Lender shall have approved, in writing, as evidenced by the issuance of a commitment letter to Buyer, the granting of the Loan to Buyer in accordance with the terms of the financing proposal. Buyer agrees to take such steps as are necessary for the Lender to approve the Loan and to issue a commitment letter to Buyer. If Lender denies Buyer’s procurement of the Loan, in writing, Buyer may terminate this Agreement.

(d) Delivery of Financing. In the event that Buyer shall have obtained a written commitment from the Lender for the Loan, Buyer shall receive the Loan at Closing.

In the event that the conditions set forth in Sections 10(a) through (d) are not satisfied, then Buyer may terminate this Agreement by notice to Seller, in which event the Deposit plus accrued interest thereon, shall be immediately returned by Seller to Buyer, and Buyer and Seller shall have no further liabilities or obligations hereunder. In the event that the Buyer fails to terminate the Agreement on account of a failure of a condition within the applicable period pursuant to the terms of this Section 10, then Buyer shall be deemed to have waived its rights to do so on account of the failure of such condition and the Deposit shall be fully nonrefundable to Buyer on account of a failure of such condition, except in the event the Seller is in default under its obligations under the Agreement or there is a breach of Seller’s representations or warranties under this Agreement or in the event the Agreement is terminated pursuant to the terms of Section 12 hereof or pursuant to any other provision in the Agreement which entitles Buyer to terminate this Agreement. The terms of this paragraph shall survive the termination of this Agreement.

11. Conditions Precedent to Performance by Seller. Seller’s obligation to consummate the transactions contemplated herein is expressly subject to Buyer having duly performed and complied with all covenants, agreements and conditions required by this Agreement to be performed or complied with by it before or at Closing.

12. Fire, Eminent Domain, etc. Seller shall bear the risk of all loss or damage to the Property from all causes, and the risk of condemnation proceedings or other proceedings in the nature of eminent domain, until Closing. If at any time prior to the date of Closing any portion of the Property is destroyed or damaged as a result of fire or any other casualty whatsoever, or Seller is notified of any condemnation proceedings or other proceedings in the nature of eminent domain against any portion of the Property, Seller shall, within three (3) business days thereof (but not later than Closing), give written notice thereof to Buyer and (a) the deadline for Closing shall be extended to the later of the Casualty Termination Date or the date specified in Section 4 hereof, and (b) Buyer shall have the right no later than thirty (30) days after receipt of such notice (“Casualty Termination Date”), at its sole option, to terminate this Agreement, in which event this Agreement shall become null and void, the Deposit shall be immediately returned by Seller to Buyer, and neither party shall have any further liabilities or obligations hereunder.

13. Broker. Seller and Buyer each represent and warrant to the other that each has had no dealings, negotiations or communications with any brokers or other intermediaries in connection with this Agreement or the sale of the Property. In the event that any claim is asserted by any person, firm or corporation, whether broker or otherwise, claiming a commission and/or finder’s fee with respect to the sale and purchase of the Property resulting from any act, representation or promise of Seller, Seller shall indemnify and save harmless Buyer from any such claim, and in the event any such claim shall be made against Seller resulting from any act, representation or promise of Buyer with respect to such sale and purchase, Buyer shall likewise indemnify and save harmless Seller from any such claim. The terms of this Section 13 shall survive Closing or the earlier termination of this Agreement.

14. Provisions Regarding Deposits and Defaults.

(a) Seller’s Default. In the event Seller violates or fails to fulfill or perform any of the terms and conditions of this Agreement required to be performed by Seller, or breaches any representation or warranty contained in this Agreement and made by Seller, the Deposit shall be immediately returned by Seller to Buyer, together with all interest accrued thereon, and Buyer shall also have the right to (i) obtain specific performance by Seller of this Agreement and/or (ii) terminate this Agree-ment.

(b) Buyer’s Default. In the event Buyer violates or fails to fulfill or perform any of the terms and condi-tions of this Agreement required to be performed by Buyer, Seller shall retain the Deposit as liquidated damages, which it is agreed are not a penalty and are a fair determination of Seller’s damages, due to the difficulty in assessing the actual amount of such damages should they accrue. Receipt of such payment shall be Seller’s sole and ex-clusive remedy for such default by Buyer and this Agree-ment shall thereupon be-come null and void, and neither party shall have any further ob-ligations or liabilities hereunder.

The terms of this Section 14 shall survive Closing or the earlier termination of this Agreement.

15. Miscellaneous.

(a) Headings. The headings and captions in this Agreement are inserted for convenience of reference only and in no way define, describe or limit the scope or intent of this Agreement or any of the provisions hereof.

(b) Authority. The individuals who have executed this Agreement on behalf of Seller and/or Buyer hereby represent, warrant and confirm that they have the authority to execute this Agreement.

(c) Recordation. This Agreement shall not be recorded in any office for the recording of deeds or in any other office or place of public record.

(d) Tender Waived. Formal tender of an executed deed and purchase money is hereby waived.

(e) Integration; Amendment. This Agreement contains the entire agreement between the Seller and the Buyer and there are no other terms, obligations, covenants, representations, statements or conditions, oral or otherwise, of any kind whatsoever concerning this sale and purchase. Furthermore, this Agreement shall not be altered, amended, changed or modified except in writing executed by the parties hereto.

(f) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.

(g) Interest. For the purposes of this Agreement, the Deposit shall be held in an interest bearing federal account, with all accrued interest thereon being promptly payable to the party entitled to the Deposit under the terms of this Agreement.

(h) Notices. All notices hereunder shall be in writing and shall be deemed to have been properly given if personally delivered, sent by certified mail, return receipt requested, postage prepaid, or by private overnight express carrier, such as Federal Express, next day delivery, charges paid, or delivered by telecopy, addressed as follows:

If to Seller:	Metro Two Hotel. LLC
	148 Sheraton Drive, Box A
	New Cumberland, PA 17070
	Attention: Kiran P. Patel
	Telecopy No.: (717) 774-7383

With a copy to:	Shah & Byler, LLP
	Penn Mutual Towers
	510 Walnut Street, 9^th Floor
	Philadelphia, PA 19106
	Attention: Lok Mohapatra, Esquire
	Telecopy No.: (215) 238-0157

If to Buyer:	CNR Queen Hospitality, LLC
	c/o Mr. Nick Patel
	Dunkin' Donuts
	701 Philadelphia Pike
	Wilmington, DE 19809
	Telecopy No.: (302) 762-8974

With a copy to:	Mark L. Morris, Esquire
	Fox Rothschild LLP
	2000 Market Street, 10^th Floor
	Philadelphia, PA 19103
	Telecopy No.: (215) 299-2150

or to such additional persons or addresses as Seller and Buyer may from time to time designate by notice to the other given pursuant to this Section 15(h). Notices by the parties may be given on their behalf by their respective counsel. Notice shall be deemed to have been given upon the date of delivery, if personally delivered, three (3) days after the postmarked date of mailing if sent by certified mail, one business day after the date of deposit if sent by private overnight express carrier, or when received as confirmed by evidence of transmission, if sent by telecopy.

(i) Cooperation. At any time from and after Closing, upon the request of the other party, Buyer and Seller will cooperate with each other and do, execute, acknowledge and deliver, or cause to be delivered, all such further acts, deeds, bills of sale, assignments, conveyances, powers of attorney and other documents as may be required to carry out the provisions of this Agreement.

(j) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument.

(k) Time of the Essence. All times, wherever specified herein for the performance by Seller or Buyer of their respective obligations hereunder, are of the essence of this Agreement.

(l) Exhibits. All Exhibits referred to herein and which are attached hereto or bound separately and initialed by the parties are expressly made and constitute a part of this Agreement.

(m) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns. Buyer may assign Buyer’s right, title and interest in and to this Agreement to a corporation, limited liability company, partnership or other entity controlled by Buyer or Buyer and Buyer’s relatives, in which event the assignee shall be the sole “Buyer” for all purposes under this Agreement.

16. 1099 S Tax Filing Information. In accordance with Internal Revenue Code, Section 6045(e), under the Tax Reform Act of 1986, information must be supplied to the Internal Revenue Service regarding all real estate transactions. In compliance with this Act the document attached hereto and made a part hereof as Exhibit "I" shall be completed and executed by the Seller and Buyer with the signing of this Agreement. It is also understood and agreed that in the event the Buyer's lender or the Title Company does not designate itself as the reporting agent, the Buyer's attorney shall report the information needed to comply with said Section 6045(e).

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

	SELLER:

	METRO TWO HOTEL, LLC


	By:
	Name:
	Title:

	BUYER:

	CNR QUEENS HOSPITALITY, LLC

	By:	CNR Queens Hospitality Manager, LLC

	By:
		Nilesh Patel, Member

	By:
		Chandresh Patel, Member

JOINDER

In addition, the undersigned, for good and valuable consideration and intending to be legally bound, hereby joins in the foregoing Agreement for the purpose of guaranteeing to Buyer that the undersigned shall and hereby agrees to indemnify, defend and save the Buyer, its members, officers, employees, agents, supervisors, attorneys and consultants harmless from any and all claims, suits, demands, fines, liens, causes of action, awards or damages in either law or equity, which occur or originate within twelve months following the date of Closing under this Agreement and which arise directly as a result of matters, occurrences or events which directly resulted in the original imposition of the Environmental Liens, attached as Exhibit “H” hereto, filed against the Property, the same to include but not be limited to reasonable attorney fees, consultant’s fees, expert witness fees, and costs incurred by Buyer, its members, officers, employees, agents, supervisors, attorneys and consultants in defending against or removing such claims, suits, demands, fines, liens, causes of action, awards or damages; provided that Buyer shall provide to Seller written notice within 10 days of receipt of notice of any and all claims, suits, demands, fines, liens, causes of action, awards or damages for which Buyer seeks indemnification, and further provided that Buyer shall give such notice within the aforementioned twelve month period. The indemnification provided herein shall not extend to claims, suits, demands, fines, liens, causes of action, awards or damages first filed against or imposed upon Buyer after the aforesaid twelve month period even if the underlying cause of the claims, suits, demands, fines, liens, causes of action, awards or damages existed during such twelve month period.

	HERSHA HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited partnership


	By:
	Name:

EX-10.2 3 ex10_2.htm EXHIBIT 10.2 Exhibit 10.2

Exhibit 10.2

PURCHASE AND SALE AGREEMENT

dated as of May 13, 2005

between

5544 JFK III ASSOCIATES

as Seller,

and

METRO SAI HOSPITALITY L.L.C.

as Purchaser

IN CONNECTION WITH THE SALE AND PURCHASE OF THE

DOUBLETREE CLUB HOTEL, JAMAICA, NEW YORK

PURCHASE AND SALE AGREEMENT

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

ARTICLE I

DEFINITIONS; RULES OF CONSTRUCTION

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

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

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

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

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

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

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

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

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

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

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

"Excluded Assets" shall mean:

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

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

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

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

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

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

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

(h) Management proprietary system;

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

(j) Minivan;

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

(l) Timeclock

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

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

(o) liquor license.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE II

PURCHASE AND SALE; STUDY PERIOD;

PAYMENT OF CONSIDERATION

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

(a) The Consideration shall be paid as follows:

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

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

(b)

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

2.2 Study Period.

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

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

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

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

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

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

ARTICLE III

SELLER’S REPRESENTATIONS, WARRANTIES AND COVENANTS

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

3.1 Identity and Power.

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

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

3.2 Authorization, No Violations and Notices.

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

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

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

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

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

3.4 Property.

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

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

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

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

3.7 Intentionally Omitted.

3.8 Intentionally Omitted.

3.9 Intentionally Omitted.

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

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

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

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

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

3.15 Intentionally Omitted.

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

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

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

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

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

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

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

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

3.24 License.

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

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

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

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

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

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

ARTICLE IV

PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS

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

4.1 Identity and Power.

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

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

4.2 Authorization, No Violations and Notices.

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

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

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

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

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

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

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

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

ARTICLE V

CONDITIONS AND ADDITIONAL COVENANTS

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

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

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

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

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

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

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

5.7 Intentionally Omitted.

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

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

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

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

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

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

5.14 Intentionally Omitted.

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

ARTICLE VI

CLOSING

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

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

(a) Bargain and Sale Deed (“Deed”).

(b) The Assignment and Assumption Agreement.

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

(e) The certificate required by Section 5.2..

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

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

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

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

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

(k) All keys for the Property.

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

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

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

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

(b) The Assignment and Assumption Agreement;

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

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

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

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

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

(b) Real estate and personal property taxes.

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

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

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

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

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

ARTICLE VII

CONDEMNATION; RISK OF LOSS

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

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

ARTICLE VIII

LIABILITY OF PURCHASER; INDEMNIFICATION BY SELLER;

TERMINATION RIGHTS

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

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

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

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

ARTICLE IX

MISCELLANEOUS PROVISIONS

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

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

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

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

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

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

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

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

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

If to the Purchaser:

	Metro Sai Hospitality L.L.C
	34 Cleveland Avenue
	Glenhead, New York 11545
	Telephone : 516-775-2766
	Facsimile : 516-775-2966


With a copy to:	Brian Wrynn
	13 Mayflower Place
	Floral Park, New York 11001
	Telephone: 516-775-2766
	Facsimile: 516-775-2966

If to the Seller:	5544 JFK III Associates
	148 Sheraton Drive, Box A
	New Cumberland, PA 17070
	Attn: Kiran P. Patel
	Telephone: 717-770-2405
	Facsimile: 717-774-7383

With a copy to:	Shah & Byler, LLP
	510 Walnut Street
	Philadelphia, PA 19106
	Attn: Lok Mohapatra, Esquire
	Telephone: 215-238-1045
	Facsimile: 267-238-1874

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

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

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

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

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

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

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

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

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

	SELLER:

	5544 JFK III ASSOCIATES, a Pennsylvania limited partnership

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


	By:
		Jay H. Shah, Manager

	PURCHASER:

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


	By:
		Dr. Ashok Dhabuwala, Managing Member