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EXHIBIT 10.1

PLACEMENT AGREEMENT

AMONG

HERSHA HOSPITALITY LIMITED PARTNERSHIP,
 
HERSHA HOSPITALITY TRUST,

HERSHA STATUTORY TRUST II

 
AND

CREDIT SUISSE FIRST BOSTON LLC

________________

 
 
Dated as of May 31, 2005

________________

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Hersha Hospitality Limited Partnership

$25,000,000 Preferred Securities

Preferred Securities
(Liquidation Amount $1,000 per Preferred Security)

PLACEMENT AGREEMENT

______________________

 
May 31, 2005         

Credit Suisse First Boston LLC
Eleven Madison Avenue
New York, New York 10010

Ladies and Gentlemen:

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

Section 1.    Issuance and Sale of Securities.

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

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

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

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

Section 2.         Purchase of Preferred Securities.

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

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

2.3     Closing and Delivery of Payment.

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

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

2.4      Placement Agents’ Fees and Expenses.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

4.1      Securities Laws Matters.

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

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

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

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

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

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4.2     Standing and Qualification of the Trust. The Trust has been duly created
and is validly existing in good standing as a statutory trust under the Delaware
Statutory Trust Act, 12 Del. C. §3801, et seq. (the “Statutory Trust Act”) with
all requisite power and authority to own property and to conduct the business it
transacts and proposes to transact and to enter into and perform its obligations
under the Operative Documents to which it is a party. The Trust is duly
qualified to transact business as a foreign entity and is in good standing in
each jurisdiction in which such qualification is necessary, except where the
failure to so qualify or be in good standing would not have a material adverse
effect on the condition (financial or otherwise), earnings, business, prospects
or assets of the Trust, whether or not occurring in the ordinary course of
business. The Trust is not a party to, or otherwise bound by, any agreement
other than the Operative Documents. The Trust is, and under current law will
continue to be, classified for federal income tax purposes as a grantor trust
and not as an association or publicly traded partnership taxable as a
corporation.
 
4.3     Trust Agreement. The Trust Agreement has been duly authorized by the
Company and, on the Closing Date specified in Section 2.3.1, will have been duly
executed and delivered by the Company and the Administrative Trustees of the
Trust, and, assuming due authorization, execution and delivery by the Property
Trustee and the Delaware Trustee, will be a legal, valid and binding obligation
of the Company and the Administrative Trustees, enforceable against them in
accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors’ rights generally and to general principles of
equity. Each of the Administrative Trustees of the Trust is an employee of the
Company or one of its subsidiaries and has been duly authorized by the Company
to execute and deliver the Trust Agreement. To the knowledge of the
Administrative Trustees, the Trust is not in violation of any provision of the
Statutory Trust Act.

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

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

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

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

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

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

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

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

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

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

4.15    Financial Statements.

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

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

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

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

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

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

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

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

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

4.22    Books and Records. The books, records and accounts of the Company and
its subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and its subsidiaries. The Company and each of its
subsidiaries maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
accordance with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
 
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4.23    Insurance. The Company and the Significant Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts in all material respects as are customary in the businesses
in which they are engaged or propose to engage after giving effect to the
transactions contemplated hereby, including, but not limited to, real or
personal property owned or leased against theft, damage, destruction, act of
vandalism and all other risks customarily insured against. All policies of
insurance and fidelity or surety bonds insuring the Company or any of the
Significant Subsidiaries or the Company’s or Significant Subsidiaries’
respective businesses, assets, employees, officers and directors are in full
force and effect. The Company and each of the Significant Subsidiaries are in
compliance with the terms of such policies and instruments in all material
respects. Neither the Company nor any Significant Subsidiary has reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a
Material Adverse Effect. Within the past twelve months, neither the Company nor
any Significant Subsidiary has been denied any insurance coverage which it has
sought or for which it has applied.
 
4.24    Corporate Funds. The Company and its subsidiaries or any person acting
on behalf of the Company and its subsidiaries including, without limitation, any
director, officer, agent or employee of the Company or its subsidiaries has not,
directly or indirectly, while acting on behalf of the Company and its
subsidiaries (i) used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity; (ii)
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; (iii) violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended; or (iv) made any other unlawful payment.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Section 8.         Indemnification & Contribution.

8.1     Indemnification.

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

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

8.2     Contribution.

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

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

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

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

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

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

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

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

Section 9.         Rights and Responsibilities of Placement Agent.

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

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

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

Section 11.       Miscellaneous.

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

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

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If to the Placement Agent, to:

Credit Suisse First Boston LLC
Eleven Madison Avenue
New York, New York 10010-3629
Facsimile: (212) 743-5043
Attention: The CDO Group

with a copy to:

Thacher Proffitt & Wood llp
Two World Financial Center
New York, New York 10281
Facsimile: (212) 912-7751
Telephone: (212) 912-7400
Attention: Mark I. Sokolow, Esq.

if to the Offerors or HHT, to:

Hersha Hospitality Limited Partnership
510 Walnut Street, 9th Floor
Philadelphia, Pennsylvania 19106
Facsimile: 215-238-0157
Telephone: 215-238-1046
Attention: Chief Financial Officer
 
with a copy to:

Hunton & Williams llp
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219
Facsimile: (804) 788-8218
Telephone: (804) 788-8200
Attention: James S. Seevers, Jr., Esq.

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

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

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

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

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

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

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

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

24

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

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

Signatures appear on the following page
 
25

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

Very truly yours,

     
Hersha Hospitality Limited Partnership
     
By: Hersha Hospitality Trust, its general partner
     
By:
     
Name:
   
Title:
     
Hersha Hospitality Trust
     
By:
 
   
Name:
   
Title:
     
Hersha Statutory Trust II
 
By: Hersha Hospitality Limited Partnership, as Depositor
     
By:
     
Name:
   
Title:

CONFIRMED AND ACCEPTED
as of the date first set forth above
 
Credit Suisse First Boston LLC, as Placement Agent
 
By:
     
Name:
   
Title:
 

 
26

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Schedule 1
 
List of Significant Subsidiaries

 44 New England Management Company, a Virginia corporation

27

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EXHIBIT A

FORM OF SUBSCRIPTION AGREEMENT

PREFERRED SECURITIES SUBSCRIPTION AGREEMENT

May 31, 2005

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

RECITALS:

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

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

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

Article I
PURCHASE AND SALE OF PREFERRED SECURITIES

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

A-1

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

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

Article II
REPRESENTATIONS AND WARRANTIES OF PURCHASER

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

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

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

A-2

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

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

Article III
MISCELLANEOUS

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

 
To the Offerors and HTT:
Hersha Hospitality Limited Partnership

510 Walnut Street, 9th Floor
Philadelphia, Pennsylvania 19106
Fax: 215-238-0157
Attention: Chief Financial Officer

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

c/o Credit Suisse First Boston LLC
Eleven Madison Avenue
New York, New York 10010-3629
Fax: (212) 743-5043
Attention: The CDO Group
 
Unless otherwise expressly provided herein, notices shall be deemed to have been
given on the date of mailing, except notice of change of address, which shall be
deemed to have been given when received.
 
3.2   This Agreement shall not be changed, modified or amended except by a
writing signed by the parties to be charged, and this Agreement may not be
discharged except by performance in accordance with its terms or by a writing
signed by the party to be charged.

A-3

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

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

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

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

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

 
Signatures appear on the following page

A-4

--------------------------------------------------------------------------------

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

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands branch, as
Purchaser
       
By:
  
   
Name:
   
Title:
             
By:
  
   
Name:
   
Title:
       
CREDIT SUISSE FIRST BOSTON LLC
(for purposes of the rights and obligations in Sections 1.2, 1.3 and Article III
only)
       
By:
  
   
Name:
   
Title:
       
HERSHA HOSPITALITY LIMITED PARTNERSHIP
     
By: Hersha Hospitality Trust, its general partner
       
By:
  
   
Name:
   
Title:
       
HERSHA HOSPITALITY TRUST
 
(for purpose of the rights and obligations in Sections 1.2, 1.3 and Article III
only)
       
By:
  
   
Name:
   
Title:
       

 
A-5

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EXHIBIT B-1
 
FORM OF THACHER PROFFITT & WOOD LLP OPINION

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

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

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

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

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

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

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

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

B-1-1

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

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

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

In rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of New York, the Delaware General Corporation
Law and the federal laws of the United States; (B) as to matters involving the
application of laws of any jurisdiction other than the State of New York and the
Delaware General Corporation Law or the federal laws of the United States, (i)
rely, to the extent deemed proper and specified in such opinion, upon the
opinion of other counsel of good standing believed to be reliable and who are
satisfactory to the Purchaser or (ii) assume such law is substantially similar
to the law of the State of New York and, (C) as to matters of fact, rely to the
extent deemed proper, on certificates of responsible officers of the Company and
public officials.
 
B-1-2

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EXHIBIT B-2

FORM OF COMPANY COUNSEL OPINION
OR OFFICERS’ CERTIFICATE

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

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

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

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

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

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

B-2-1

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All terms used but not defined herein shall have the meanings assigned to them
in the Placement Agreement. A Subsequent Purchaser shall be entitled to rely on
this certificate.
 
B-2-2

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EXHIBIT B-3

FORM OF TAX COUNSEL OPINION

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

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

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

In rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of New York and the federal laws of the
United States and (B) rely as to matters of fact, to the extent deemed proper,
on certificates of responsible officers of the Company and public officials.
 
B-3-1

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EXHIBIT B-4
 
FORM OF DELAWARE COUNSEL TRUST OPINION

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

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

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

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

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

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

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

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

B-4-1

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

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

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

In rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware and (B) rely as to matters of fact,
to the extent deemed proper, on certificates of responsible officers of the
Company and public officials.
 
B-4-2

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EXHIBIT B-5
 
FORM OF TRUSTEE COUNSEL OPINION

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

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

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

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

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

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

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

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

In rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware and the federal laws of the
United States governing the trust powers of WTC and (B) rely as to matters of
fact, to the extent deemed proper, on certificates of responsible officers of
WTC and public officials.
 
B-5-1

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FORM OF OFFICER’S FINANCIAL CERTIFICATE

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

As of [Quarterly/Annual Financial Date]

   
Senior secured indebtedness for borrowed money (“Debt”)
$_____
   
Senior unsecured Debt
$_____
   
Subordinated Debt
$_____
   
Total Debt
$_____
   
Ratio of (x) senior secured and unsecured Debt to (y) total Debt
_____%

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

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

The financial statements fairly present in all material respects, in accordance
with U.S. generally accepted accounting principles (“GAAP”), the financial
position of HHT and its consolidated subsidiaries, and the results of operations
and changes in financial condition as of the date, and for the [quarter]
[annual] period ended [date], 20__, and such financial statements have been
prepared in accordance with GAAP consistently applied throughout the period
involved (expect as otherwise noted therein).
 
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IN WITNESS WHEREOF, the undersigned has executed this Officer’s Financial
Certificate as of this _____ day of _____________, 20__.

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

 
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