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EXHIBIT 10.1

PURCHASE AGREEMENT

among

Hersha Hospitality Limited Partnership

Hersha Statutory Trust I
 

and

Merrill Lynch International
________________

Dated as of May 11, 2005

________________
 
 

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PURCHASE AGREEMENT
($25,000,000 Trust Preferred Securities)

THIS PURCHASE AGREEMENT, dated as of May 11, 2005 (this "Purchase Agreement"),
is entered into among Hersha Hospitality Limited Partnership, a Virginia limited
partnership (the "Company"), Hersha Statutory Trust I, a Delaware statutory
trust (the "Trust", and together with the Company, the "Sellers"), and Merrill
Lynch International or its assignee (the "Purchaser").

WITNESSETH:

WHEREAS, the Sellers propose to issue and sell 25,000 Preferred Securities of
the Trust, having a stated liquidation amount of $1,000 per security (the
"Preferred Securities");

WHEREAS, the entire proceeds from the sale of the Preferred Securities will be
combined with the entire proceeds from the sale by the Trust to the Company of
its common securities (the "Common Securities"), and will be used by the Trust
to purchase Twenty-Five Million Seven Hundred Seventy-Four Thousand Dollars
($25,774,000) in principal amount of the unsecured junior subordinated notes of
the Company (the "Junior Subordinated Notes");

WHEREAS, the Preferred Securities and the Common Securities for the Trust will
be issued pursuant to the Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of the Closing Date, among the Company, as depositor,
JPMorgan Chase Bank, National Association, a national banking association, as
property trustee (in such capacity, the "Property Trustee"), Chase Bank USA,
National Association, a national banking association, as Delaware trustee (in
such capacity, the "Delaware Trustee"), the Administrative Trustees named
therein (in such capacities, the "Administrative Trustees") and the holders from
time to time of undivided beneficial interests in the assets of the Trust; and

WHEREAS, the Junior Subordinated Notes will be issued pursuant to a Junior
Subordinated Indenture, dated as of the Closing Date (the "Indenture"), between
the Company and JPMorgan Chase Bank, National Association, a national banking
association, as indenture trustee (in such capacity, the "Indenture Trustee").

NOW, THEREFORE, in consideration of the mutual agreements and subject to the
terms and conditions herein set forth, the parties hereto agree as follows:

1.    Definitions. The Preferred Securities, the Common Securities and the
Junior Subordinated Notes are collectively referred to herein as the
"Securities." This Purchase Agreement, the Indenture, the Trust Agreement and
the Securities are collectively referred to herein as the "Operative Documents."
All other capitalized terms used but not defined in this Purchase Agreement
shall have the respective meanings ascribed thereto in the Indenture.

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2.    Purchase and Sale of the Preferred Securities.

(a)   The Sellers agree to sell to the Purchaser, and the Purchaser agrees to
purchase from the Sellers the Preferred Securities for an amount (the "Purchase
Price") equal to Twenty-Five Million Dollars ($25,000,000). The Purchaser shall
be responsible for the rating agency costs and expenses. The Sellers shall use
the Purchase Price, together with the proceeds from the sale of the Common
Securities, to purchase the Junior Subordinated Notes.

(b)   Delivery or transfer of, and payment for, the Preferred Securities shall
be made at 11:00 A.M. Eastern Daylight time (11:00 A.M. New York time), on May
13, 2005, (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 against the payment of the
Purchase Price to the Sellers made by wire transfer in immediately available
funds on the Closing Date to a U.S. account designated in writing by the Company
at least two business days prior to the Closing Date.

(c)   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
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 not later than 2:00 P.M., Eastern Daylight time, on the business day
prior to the Closing Date. The closing for the purchase and sale of the
Preferred Securities shall occur at the offices of Bracewell & Giuliani LLP, 111
Congress Avenue, Suite 2300, Austin, Texas 78701, or such other place as the
parties hereto shall agree.

3.    Conditions. The obligations of the parties under this Purchase Agreement
are subject to the following conditions:

(a)   The representations and warranties contained herein shall be accurate as
of the date of delivery of the Preferred Securities.

(b)   The Purchaser shall have sold securities issued by it in such an amount
that the net proceeds therefrom shall be available on the Closing Date and shall
be sufficient to purchase the Preferred Securities and all other preferred
securities contemplated in agreements similar to this Agreement.

(c)   Hunton & Williams LLP, counsel for the Company and the Trust (the "Company
Counsel"), shall have delivered an opinion, dated the Closing Date, addressed to
the Purchaser, Cohen Bros. Securities, LLC and JPMorgan Chase Bank, National
Association, in substantially the form set out in Annex A-I hereto and (ii) the
Company shall have furnished to the Purchaser the opinion of the Company's
General Counsel or a certificate signed by the Chief Executive Officer,
President, an Executive Vice President, Chief Financial Officer, Treasurer or
Assistant Treasurer of Hersha Hospitality Trust, a Maryland real estate
investment trust and the general partner and the Company ("HHT"), dated the
Closing Date, addressed to the Purchaser, in substantially the form set out in
Annex A-II hereto. In rendering their opinion, the Company Counsel may rely as
to factual matters upon certificates or other documents furnished by officers,
directors and trustees of the Company and the Trust and by government officials
(provided, however, that copies of any such certificates or documents are
delivered to the Purchaser) and by and upon such other documents as such counsel
may, in their reasonable opinion, deem appropriate as a basis for the Company
Counsel's opinion. The Company Counsel may specify the jurisdictions in which
they are admitted to practice and that they are not admitted to practice in any
other jurisdiction and are not experts in the law of any other jurisdiction. If
the Company Counsel is not admitted to practice in the State of New York, the
opinion of the Company Counsel may assume, for purposes of the opinion, that the
laws of the State of New York are substantively identical, in all respects
material to the opinion, to the internal laws of the state in which such counsel
is admitted to practice. Such Company Counsel Opinion shall not state that they
are to be governed or qualified by, or that they are otherwise subject to, any
treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).

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(d)   The Purchaser shall have been furnished the opinion of Bracewell &
Giuliani LLP, special tax counsel for the Purchaser, dated the Closing Date,
addressed to the Purchaser and JPMorgan Chase Bank, National Association, and
HHT, in substantially the form set out in Annex B hereto.

(e)   The Purchaser shall have received the opinion of Richards, Layton &
Finger, P.A., special Delaware counsel for the Delaware Trustee, dated the
Closing Date, addressed to the Purchaser, JPMorgan Chase Bank, National
Association, the Delaware Trustee and the Company, in substantially the form set
out in Annex C hereto.

(f)   The Purchaser shall have received the opinion of Gardere Wynne Sewell LLP,
special counsel for the Property Trustee and the Indenture Trustee, dated the
Closing Date, addressed to the Purchaser, in substantially the form set out in
Annex D hereto.

(g)   The Purchaser shall have received the opinion of Richards, Layton &
Finger, P.A., special Delaware counsel for the Delaware Trustee, dated the
Closing Date, addressed to the Purchaser and JPMorgan Chase Bank, National
Association, in substantially the form set out in Annex E hereto.

(h)   The Company shall have furnished to the Purchaser a certificate, signed by
the Chief Executive Officer, President or an Executive Vice President, and Chief
Financial Officer, Treasurer or Assistant Treasurer of HHT, and the Trust shall
have furnished to 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, as to (i) and (ii) below and, in the case of the
Trust, as to (i) below.

(i)   the representations and warranties in this Purchase 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 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

(ii)   since December 31, 2004 (the date of the latest Financial Statements),
there has been no material adverse change in the business properties,
management, financial condition or results of operations of the Company and its
subsidiaries, whether or not arising from transactions occurring in the ordinary
course of business (a "Material Adverse Change").

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(i)   Subsequent to the execution of this Purchase Agreement, there shall not
have been any change, or any development involving a prospective 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 Purchaser's judgment, so
material and adverse as to make it impractical or inadvisable to proceed with
the purchase of the Preferred Securities.

(j)   Prior to the Closing Date, the Company and the Trust shall have furnished
to the Purchaser and its counsel such further information, certificates and
documents as the Purchaser or its counsel may reasonably request.

If any of the conditions specified in this Section 3 shall not have been
fulfilled when and as provided in this Purchase Agreement, or if any of the
opinions, certificates and documents mentioned above or elsewhere in this
Purchase Agreement shall not be reasonably satisfactory in form and substance to
the Purchaser or its counsel, this Purchase Agreement and all the Purchaser's
obligations hereunder may be canceled at, or at any time prior to, the Closing
Date by the Purchaser. Notice of such cancellation shall be given to the Company
and the Trust 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 and delivered to the Purchaser or the Purchaser's 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 and/or
the Company, as the case may be, and not by such trustee or officer in any
individual capacity.

4.    Representations and Warranties of the Company and the Trust. The Company
and the Trust jointly and severally represent and warrant to, and agree with the
Purchaser, as follows:

(a)   Neither the Company nor the Trust, nor any of their "Affiliates" (as
defined in Rule 501(b) of Regulation D ("Regulation D") under the Securities Act
(as defined below)), nor any person acting on its or their behalf, 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 of any of
the Securities under the Securities Act of 1933, as amended (the "Securities
Act").

(b)   Neither the Company nor the Trust, nor any of their Affiliates, nor any
person acting on its or their behalf, has 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.

(c)   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
inter-dealer 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)").

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(d)   Neither the Company nor the Trust, nor any of their Affiliates, nor any
person acting on its or their behalf, has engaged, or will engage, in any
"directed selling efforts" within the meaning of Regulation S under the
Securities Act with respect to the Securities.

(e)   Neither the Company nor the Trust is, and, immediately following
consummation of the transactions contemplated hereby and the application of the
net proceeds therefrom, will not 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.

(f)   Neither the Company nor the Trust has paid or agreed to pay to any person
any compensation for soliciting another to purchase any of the Securities,
except for the sales commission in the amount of $750,000, the Company has
agreed to pay to Cohen Bros. Securities, LLC pursuant to the letter agreement
between HHT and Cohen Bros. Securities, LLC.

(g)   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 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 will
be, under current law, classified for U.S. federal income tax purposes as a
grantor trust and not as an association or publicly traded partnership taxable
as a corporation.

(h)   The Trust Agreement has been duly authorized by the Company and, on the
Closing Date specified in Section 2(b), 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, reorganization and
similar laws affecting creditors' rights generally and to general principles of
equity (regardless of whether the issue of enforceability is considered in a
proceeding at law or in equity). Each of the Administrative Trustees of the
Trust is an employee of the Company and has been duly authorized by the Company
to execute and deliver the Trust Agreement.

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(i)   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,
reorganization and similar laws affecting creditors' rights generally and to
general principles of equity (regardless of whether the issue of enforceability
is considered in a proceeding at law or in equity).

(j)   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 in accordance with this Purchase Agreement, in the case of
the Preferred Securities, and in accordance with the Common Securities
Subscription Agreement, in the case of the Common Securities, will be validly
issued, fully paid and non-assessable 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, reorganization and similar laws affecting
creditors' rights generally and to general principles of equity (regardless of
whether the issue of enforceability is considered in a proceeding at law or in
equity). The issuance of the Securities is not subject to any 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 of any kind (each, a
"Lien").

(k)   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
Purchase Agreement, 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, reorganization and similar laws affecting creditors' rights
generally and to general principles of equity (regardless of whether the issue
of enforceability is considered in a proceeding at law or in equity).

(l)   This Purchase Agreement has been duly authorized, executed and delivered
by the Company and the Trust.

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(m)   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, 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 herein or therein, (i) will
conflict with or constitute a violation or breach of the Trust Agreement or the
organizational documents 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, the
"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) to which 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, materially and 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 business, properties, financial
condition, or results of operations or 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.

(n)   The Company has been duly organized and is validly existing as a limited
partnership in good standing under the laws of Maryland, with all requisite
power and authority to own, lease and operate its properties and conduct its
business as now being conducted and as proposed to be conducted, 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.

(o)   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 (collectively, the "Significant Subsidiaries"). Each
Significant Subsidiary has been duly organized and is validly existing as a
corporation, limited liability company, limited partnership or trust in good
standing under the laws of the jurisdiction in which it is chartered or
organized, with all requisite corporate power and authority to own, lease and
operate its properties and conduct its respective business as now being
conducted and as proposed to be conducted. Each Significant Subsidiary 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 to be so qualified would not, singly or in the aggregate, have a
Material Adverse Effect.

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(p)   Each of the Trust, the Company and each of the Company's subsidiaries hold
all necessary approvals, authorizations, orders, licenses, consents,
registrations, qualifications, certificates and permits (collectively, the
"Governmental Licenses") of and from Governmental Entities necessary to conduct
their respective businesses 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 Governmental Licenses are
valid and in full force and effect, except where the invalidity or the failure
of such Governmental 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 laws, rules, regulations, judgments,
orders, decrees and consents applicable to their respective businesses, except
where the failure to be in compliance would not, singly or in the aggregate,
have a Material Adverse Effect.

(q)   All of the issued and outstanding units in 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 non-assessable;
the Company owns the interests in each of its subsidiaries as provided on
Schedule 2; the ownership interest in each of its subsidiaries is owned by the
Company, free and clear of any Lien, claim or equitable right; and none of the
issued and outstanding units in the Company and none of the issued and
outstanding capital stock of any subsidiary was issued in violation of any
preemptive or similar rights arising by operation of law of their respective
jurisdiction of organization, under the organizational documents of such entity
or under any agreement to which the Company or any of its subsidiaries is a
party.

(r)   Neither the Company nor any of its subsidiaries is (i) in violation of its
respective 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 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 violation or
default would not, singly or in the aggregate, have a Material Adverse Effect.

(s)   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 reasonably expected to
result in a Material Adverse Effect.

(t)   The accountants of HHT who certified the Financial Statements (as defined
below) are independent public accountants of HHT and its subsidiaries, including
the Company, within the meaning of the Securities Act, and the rules and
regulations of the Securities and Exchange Commission (the "Commission")
thereunder.

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(u)   The audited consolidated financial statements (including the notes
thereto) and schedules of HHT and its consolidated subsidiaries for the fiscal
year ended December 31, 2004 (the "Financial Statements") and the interim
unaudited consolidated financial statements of HHT and its consolidated
subsidiaries for the quarter ended March 31, 2005 ("Interim Financial
Statements") provided to the Purchaser are the most recent available audited and
unaudited consolidated financial statements of the Company 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 the Company 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).

(v)   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.

(w)   Since the respective dates of the Financial Statements and the Interim
Financial Statements, there has not been (A) any Material Adverse Change or (B)
any dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock other than regular quarterly dividends on the
Company's common stock.

(x)   The documents of HHT filed with the Commission 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 Commission (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 Commission thereunder (the
"1934 Act Regulations"), and, at the date of this Purchase 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 Commission 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.

(y)   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.

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(z)   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 and any required under the securities or
blue sky laws of the jurisdiction in which the Securities are being offered, is
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.

(aa)        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 (i) related to debt financings as provided on Schedule 3 or (ii) 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.

(bb)        Commencing with its taxable year ended December 31, 1999, HHT has
been, and upon the completion of the transactions contemplated hereby, HHT will
continue to be, organized and operated in conformity with the requirements for
qualification and taxation as a real estate investment trust (a "REIT") under
Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the
"Code"), and HHT's proposed method of operation will enable it to continue to
meet the requirements for qualification and taxation as a REIT under the Code,
and no actions have been taken (or not taken which are required to be taken)
which would cause such qualification to be lost. HHT expects to continue to be
organized and to operate in a manner so as to qualify as a REIT in the taxable
year ending December 31, 2005 and succeeding taxable years.

(cc)        The Company and each of the Significant Subsidiaries have timely and
duly filed all Tax Returns required to be filed by them or have obtained a valid
extension for such filings, and all such Tax Returns are true, correct and
complete in all material respects. The Company and each of the Significant
Subsidiaries have timely and duly paid in full all material Taxes required to be
paid by them (whether or not such amounts are shown as due on any Tax Return).
There are no federal, state, or other Tax audits or deficiency assessments
proposed or pending with respect to the Company 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.

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(dd)        The Trust will not be 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 will be
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.

(ee)        The books, records and accounts of HHT 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, HHT and its
subsidiaries. Except as disclosed in its SEC filings, HHT 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.

(ff)         The Company and the Significant Subsidiaries maintain insurance
covering its properties, operations, personnel and businesses as they deem
adequate; such insurance insures against such losses and risks to an extent and
in such amounts in all material respects as are customary with industry practice
to protect the Company and its Significant Subsidiaries and their businesses.
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 properties, operations, personnel and businesses are in
full force and effect. The Company and each of the 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.

(gg)        Neither the Company nor its subsidiaries nor, to the Company's
knowledge, 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, 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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(hh)        The information provided by the Company and the Trust pursuant to
this Purchase Agreement and the transactions contemplated hereby 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.

(ii)          The Company, it’s subsidiaries and their properties, assets and
operations are in compliance with, and hold all permits, authorizations and
approvals required under, Environmental Laws (as defined below), except to the
extent that failure to so comply or to hold such permits, authorizations or
approvals would not, individually or in the aggregate, have a Material Adverse
Effect; except as would not, individually or in the aggregate, have a Material
Adverse Effect, there are no past, present or, to the Company's knowledge after
due inquiry, reasonably anticipated future events, conditions, circumstances,
activities, practices, actions, omissions or plans that could reasonably be
expected to give rise to any material costs or liabilities to the Company or its
subsidiaries under, or to interfere with or prevent compliance by the Company or
it subsidiaries with, Environmental Laws; except as would not, individually or
in the aggregate, have a Material Adverse Effect, neither the Company nor any of
its subsidiaries (i) is the subject of any investigation, (ii) has received any
notice or claim, (iii) is a party to or affected by any pending or threatened
action, suit or proceeding, (iv) is bound by any judgment, decree or order or
(v) has entered into any agreement, in each case relating to any alleged
violation of any Environmental Law or any actual or alleged release or
threatened release or cleanup at any location of any Hazardous Materials (as
defined below) (as used herein, "Environmental Law" means any federal, state,
local or foreign law, statute, ordinance, rule, regulation, order, decree,
judgment, injunction, permit, license, authorization or other binding
requirement, or common law, relating to health, safety or the protection,
cleanup or restoration of the environment or natural resources, including those
relating to the distribution, processing, generation, treatment, storage,
disposal, transportation, other handling or release or threatened release of
Hazardous Materials, and "Hazardous Materials" means any material (including,
without limitation, pollutants, contaminants, hazardous or toxic substances or
wastes) that is regulated by or may give rise to liability under any
Environmental Law).

(jj)          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 Effect.

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

(a)   The Purchaser is aware that the Securities have not been and will not be
registered under the Securities Act and may not be offered or sold within the
United States or to "U.S. persons" (as defined in Regulation S under the
Securities Act) except in accordance with Rule 903 of Regulation S under the
Securities Act or pursuant to an exemption from the registration requirements of
the Securities Act.

(b)   The Purchaser is an "accredited investor," as such term is defined in Rule
501(a) of Regulation D under the Securities Act.

(c)   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) in
connection with any offer or sale of the Preferred Securities.

(d)   The Purchaser understands and acknowledges that (i) no public market
exists for any of the Securities and that it is unlikely that a public market
will ever exist for the Securities, (ii) the Purchaser is purchasing the
Preferred Securities for its own account, for investment 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 Securities pursuant to an
effective registration statement under the Securities Act or pursuant to an
exemption therefrom or in a transaction not subject thereto, and the Purchaser
agrees to the legends and transfer restrictions applicable to the Preferred
Securities contained in the Trust Agreement, and (iii) the Purchaser has had the
opportunity to ask questions of, and receive answers and request additional
information from, the Company and is aware that it may be required to bear the
economic risk of an investment in the Securities.

(e)   The Purchaser is a company with limited liability duly incorporated,
validly existing and in good standing under the laws of the jurisdiction in
which it is organized with all requisite (i) power and authority to execute,
deliver and perform the Operative Documents to which it is a party, to make the
representations and warranties specified herein and therein and to consummate
the transactions contemplated herein and (ii) right and power to purchase the
Preferred Securities.

(f)   This Purchase Agreement has been duly authorized, executed and delivered
by the Purchaser and no filing with, or authorization, approval, consent,
license, order registration, qualification or decree of, any governmental body,
agency or court having jurisdiction over the Purchaser, other than those that
have been made or obtained, is necessary or required for the performance by the
Purchaser of its obligations under this Purchase Agreement or to consummate the
transactions contemplated herein.

(g)   The Purchaser is a "Qualified Purchaser" as such term is defined in
Section 2(a)(51) of the Investment Company Act.

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6.    Covenants and Agreements of the Company and the Trust. The Company and the
Trust jointly and severally agree with the Purchaser as follows:

(a)   During the period from the date of this Agreement to the Closing Date, the
Company and the Trust 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 Purchase Agreement, as if made
on and as of the Closing Date.

(b)   The Company and the Trust will arrange for the qualification of the
Preferred Securities for sale under the securities or blue sky laws of such
jurisdictions as the Purchaser 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 Purchaser 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.

(c)   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 Purchaser) to, resell any Preferred Securities that
have been acquired by any of them.

(d)   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, engage in any
"directed selling efforts" within the meaning of Regulation S under the
Securities Act with respect to the Securities.

(e)   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, directly or
indirectly, make offers or sales of any security, or solicit offers to buy any
security, under circumstances that would require the registration of any of the
Securities under the Securities Act.

(f)   Neither the Company nor the Trust will, nor will either of them permit any
of its Affiliates or any person acting on their behalf to, engage in any form of
"general solicitation or general advertising" (within the meaning of Regulation
D) in connection with any offer or sale of the any of the Securities.

(g)   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 inter-dealer quotation system and
(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).

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(h)   Each of the Company and the Trust shall furnish to (i) the holders, and
subsequent holders of the Preferred Securities, (ii) Cohen Bros. Securities, LLC
(at 1818 Market Street, 28th Floor, Philadelphia, Pennsylvania 19013, or such
other address as designated by Cohen Bros. Securities, LLC) and (iii) any
beneficial owner of the Securities reasonably identified to the Company and the
Trust (which identification may be made by either such beneficial owner or by
Cohen Bros.), 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 (or caused to
be furnished) by the Company and the Trust not later than forty five (45) days
after the end of each of the first three fiscal quarters of each fiscal year of
the Company and not later than ninety (90) days after the end of each fiscal
year of the Company.

(i)   The Company will, during any period in which it is not subject to and in
compliance with section 13 or 15(d) of the Exchange Act, or it is not exempt
from such reporting requirements pursuant to and in compliance with Rule
12g3-2(b) under the Exchange Act, shall provide (or cause to be provided) to
each holder of the Securities and to each prospective purchaser (as designated
by such holder) of the Securities, upon the request of such holder or
prospective purchaser, any information required to be provided by Rule
144A(d)(4) under the Securities Act. 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 the Purchaser and such holders,
from time to time, of the Securities.

(j)   Neither the Company 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
substantially similar to the Preferred Securities (a) other than as contemplated
by this Purchase Agreement and (b) other than offerings of "REIT perpetual
preferred stock," or (ii) any other securities convertible into, or exercisable
or exchangeable for, any Preferred Securities or other securities substantially
similar to the Preferred Securities.

(k)   HHT will use its reasonable best efforts to meet the requirements to
qualify as a REIT under Sections 856 through 860 of the Code, effective for the
taxable year ending December 31, 2005 (and each fiscal quarter of such year) and
succeeding taxable years.

(l)   The Company shall not identify the Purchaser or Cohen Bros. Securities,
LLC in a press release or any other public statement without the consent of
Purchaser or Cohen Bros. Securities, LLC, as applicable provided, that the
Company shall not be prohibited from making any public disclosure that it deems,
upon advice of counsel, to be necessary in order to comply with the requirements
of the federal securities laws.

7.    Payment of Expenses. The Company, as depositor of the Trust, agrees to pay
all costs and expenses incident to the performance of the obligations of the
Company and the Trust under this Purchase Agreement, whether or not the
transactions contemplated herein are consummated or this Purchase Agreement is
terminated, including all costs and expenses incident to (i) 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(b); (iii) the fees and expenses of the counsel, the accountants and
any other experts or advisors retained by the Company or the Trust; and (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 reasonable disbursements of counsel
for such trustees, which fees shall not exceed a $2,000 acceptance fee, $3,500
for the fees and expenses of Richards, Layton & Finger, P.A., special Delaware
counsel retained by the Delaware Trustee in connection with the Closing, and
$4,000 in administrative fees annually.

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If the sale of the Preferred Securities provided for in this Purchase Agreement
is not consummated because any condition set forth in Section 3 hereof to be
satisfied by either the Company or the Trust is not satisfied, because this
Purchase Agreement is terminated pursuant to Section 9 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 reason of a default by the Purchaser, the
Company will reimburse the Purchaser upon demand for all reasonable
out-of-pocket expenses (including the fees and expenses of each of the
Purchaser's counsel specified in subparagraph (iv) of the immediately preceding
paragraph) that shall have been incurred by the Purchaser in connection with the
proposed purchase and sale of the Preferred Securities. Neither the Company or
the Trust shall in any event be liable to the Purchaser for the loss of
anticipated profits from the transactions contemplated by this Purchase
Agreement.

8.    Indemnification. a) The Sellers agree, jointly and severally to indemnify
and hold harmless the Purchaser and Cohen Bros. Securities LLC (collectively,
the "Indemnified Parties") and the Indemnified Parties' respective partners,
directors and officers and each person who "controls" the Indemnified Parties
within the meaning of 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 by or on behalf of the Sellers,
(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 the Sellers contained herein, and agrees to reimburse each such
Indemnified Party, as incurred, for any legal or other expenses reasonably
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 Sellers may otherwise have.

(b)   The Purchaser and Cohen Bros. Securities LLC ("Cohen Bros.") agree to
indemnify and hold harmless the Sellers and each person who "controls" each
Seller within the meaning of the Securities Act or the Exchange Act, and the
respective partners, officers, directors and trustees thereof (each an
"Indemnified Party") against any 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 otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon the
breach or alleged breach of any representation, warranty or agreement of the
Purchaser contained in Section 6, and agree to reimburse each such Indemnified
Party for all costs, expenses, damages, losses or liabilities as they are
incurred and arising therefrom.

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(c)   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 paragraph (a) or (b), as
applicable, 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
paragraph (a) or (b), as applicable, above. Purchaser shall be entitled to
appoint counsel to represent the Indemnified Party in any action for which
indemnification is sought; provided, however, that if an Indemnified Party is,
or is affiliated with, Sellers as set forth in Section 8(b) above, the Company
shall be entitled to appoint counsel to represent such 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, 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.

9.    Contribution.

(a)   In order to provide for just and equitable contribution in circumstances
under which the indemnification provided for in Section 8 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 Sellers, on the one hand, and the
Purchaser and Cohen Bros., on the other hand, from the offering of the Preferred
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 Sellers, on the one hand, and the Purchaser and Cohen Bros., 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.

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(b)   The relative benefits received by the Sellers, on the one hand, and the
Purchaser and Cohen Bros., on the other hand, in connection with the offering of
the Preferred Securities shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Preferred
Securities (before deducting expenses) received by the Sellers and the benefits
received by the Purchaser and Cohen Bros. bear to the aggregate of such net
proceeds and commissions.

(c)   The Sellers, the Purchaser and Cohen Bros. agree that it would not be just
and equitable if contribution pursuant to this Section 9 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 9. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an Indemnified Party and referred to above in this Section 9 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.

(d)   Notwithstanding any provision of this Section 9 to the contrary, the
Purchaser and Cohen Bros. shall not be required to contribute any amount in
excess of the benefit received by the Purchaser and Cohen Bros. pursuant to
their involvement in the issuance of the Preferred Securities.

(e)   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.

(f)   For purposes of this Section 9, the Purchaser, Cohen Bros., each person,
if any, who controls the Purchaser or Cohen Bros. within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act and the respective
partners, directors and officers of the Purchaser and Cohen Bros. or any such
controlling person shall have the same rights to contribution as the Purchaser
and Cohen Bros., while each partner, officer and director of the Company, each
trustee of the Trust and each person, if any, who controls the Sellers 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 Sellers.

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10.    Termination; Representations and Indemnities to Survive. This Purchase
Agreement shall be subject to termination in the absolute discretion of the
Purchaser, by written 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 debt
securities or preferred stock, if any, by any "nationally recognized statistical
rating organization," as that term is used by the Commission 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 debt securities or preferred
stock, if any, (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 securities shall have
occurred on the American Stock Exchange, or (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 Purchaser's judgment,
impracticable or inadvisable to proceed with the offering or delivery of the
Preferred Securities. The respective agreements, representations, warranties,
indemnities and other statements of the Company and the Trust or their
respective officers or trustees and of the Purchaser set forth in or made
pursuant to this Purchase Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Purchaser, the
Company or the Trust or any of the their respective officers, directors,
trustees or controlling persons, and will survive delivery of and payment for
the Preferred Securities. The provisions of Sections 7, 8, and 9 shall survive
the termination or cancellation of this Purchase Agreement.

11.    Amendments. This Purchase 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.

12.    Notices.

(a)    Any communication shall be given by letter or facsimile, in the case of
notices to the Trust, to it at:

Hersha Statutory Trust I
c/o Hersha Hospitality Trust
510 Walnut Street, 9th Floor
Philadelphia, PA 19106
Facsimile:215-238-0157
Attention: Ashish Parikh

with a copy to:

Hunton & Williams LLP
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219
Facsimile: (804) 788-8214
Attention: James S. Seevers, Jr.

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in the case of notices to the Company, to it at:

Hersha Hospitality Trust
510 Walnut Street, 9th Floor
Philadelphia, PA 19106
Facsimile: 215-238-0157
Attention: Ashish Parikh

and in the case of notices to the Purchaser, to it at:

Merrill Lynch International
c/o Cohen Bros. Securities, LLC
1818 Market Street
Philadelphia, Pennsylvania 19103
Facsimile: (215) 861-7898
Attention: Asset Backed Securities

with a copy to:

Bracewell & Giuliani LLP
111 Congress Avenue, Suite 2300
Austin, TX 78701-4043
Facsimile: (512) 472-9123
Attention: David B. Jones

(b)    Any such communication shall take effect, in the case of a letter, at the
time of delivery and in the case of facsimile, at the time of dispatch.

(c)    Any communication not by facsimile shall be confirmed by letter but
failure to send or receive the letter of confirmation shall not invalidate the
original communication.

13.    Successors and Assigns. This Purchase 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 Purchase 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 and their successors, assigns, heirs and
legal representatives, any right or obligation hereunder. None of the rights or
obligations of the Company or the Trust under this Purchase Agreement may be
assigned, whether by operation of law or otherwise, without the Purchaser's
prior written consent. The rights and obligations of the Purchaser under this
Purchase Agreement may be assigned by the Purchaser without the Company's or the
Trust's consent; provided that the assignee assumes the obligations of the
Purchaser under this Purchase Agreement.

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14.    Applicable Law. THIS PURCHASE 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).

15.    Submission to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST
ANY PARTY HERETO OR WITH RESPECT TO OR ARISING OUT OF THIS PURCHASE 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 PURCHASE 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 PURCHASE AGREEMENT.

16.    Counterparts and Facsimile. This Purchase 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 Purchase Agreement may be
executed by any one or more of the parties hereto by facsimile.
 
22

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IN WITNESS WHEREOF, this Purchase Agreement has been entered into as of the date
first written above.
 

       
Hersha Hospitality Limited Partnership
      By: Hersha Hospitality Trust, its General Partner  
   
   
  By:    

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Name:
 
Title:

 

       
Hersha Statutory Trust I
      By: Hersha Hospitality Limited Partnership, as Depositor  
   
   
    By:    

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Name:
 
Title:

 
23

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Merrill Lynch International
 
   
   
  By:    

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Name:
 
Title:

24

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SCHEDULE 1

List of Significant Subsidiaries

25

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SCHEDULE 2
 
Ownership of Subsidiaries

Entity
Ownership
State of Formation
Other Qualification
Hersha Hospitality Trust
NA
MD
PA
Hersha Hospitality Limited Partnership (“HHLP”)
NA
VA
PA
Hersha Hospitality, LLC (“HH LLC”)
100% BY HHLP
VA
MD, PA
Hersha Hospitality Limited Liability Company - Carlisle
100% BY HHLP
DE
PA
Hersha Hospitality Limited Liability Company - Danville
100% BY HHLP
DE
PA
Hersha Hospitality Limited Liability Company - Duluth I
100% BY HHLP
DE
GA
Hersha Hospitality Limited Liability Company - Duluth II
100% BY HHLP
DE
GA
Hersha Hospitality Limited Liability Company - Hershey
100% BY HHLP
DE
-
Hersha Hospitality Limited Liability Company - New Columbia
100% BY HHLP
DE
-
Hersha Hospitality Limited Liability Company - New Cumberland,
100% BY HHLP
DE
GA
Hersha Hospitality Limited Liability Company - Newnan
100% BY HHLP
DE
GA
Hersha Hospitality Limited Liability Company - Peachtree
100% BY HHLP
DE
GA
Hersha Hospitality Limited Liability Company - Selinsgrove
100% BY HHLP
DE
PA
Hersha Hospitality Limited Liability Company - West Hanover,
100% BY HHLP
DE
PA
HHLP Valley Forge Associates
99% BY HHLP
1% BY HH LLC
PA
-
944 Associates
99% BY HHLP
1% by Hersha Hospitality Limited Liability Company-Carlisle
PA
-
1244 Associates
99% by HHLP
1% by Hersha Hospitality Limited Liability Company-New Cumberland
PA
-

 
1

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Entity
Ownership
State of Formation
Other Qualification

2144 Associates - Hershey
99% by HHLP
1% by Hersha Hospitality Limited Liability Company-Hershey
PA
-
2144 Associates - New Columbia
99% by HHLP
1% by Hersha Hospitality Limited Liability Company-New Columbia
PA
-
2144 Associates - Selinsgrove
99% by HHLP
1% by Hersha Hospitality Limited Liability Company-Selinsgrove
PA
-
2444 Associates
99% by HHLP
1% by Hersha Hospitality Limited Liability Company-West Hanover
PA
-
2844 Associates
99% by HHLP
1% by HH LLC
PA
-
3044 Associates
99% by HHLP and
1% by HH LLC
PA
MD
3144 Associates
99% by HHLP
1% by HH LLC
PA
-
3544 Associates
99% by HHLP
1% by HH LLC
PA
-
5644 Duluth I Associates
99% by HHLP
1% by Hersha Hospitality Limited Liability Company-Duluth I
PA
GA
5744 Duluth II Associates
99% by HHLP
1% by Hersha Hospitality Limited Liability Company-Duluth II
PA
GA
5844 Newnan Associates
99% by HHLP
1% by Hersha Hospitality Limited Liability Company-Newnan
PA
-
5944 Peachtree Associates
99% by HHLP
1% by Hersha Hospitality Limited Liability Company-Peachtree
PA
GA
5544 JFK III Associates
99% by HHLP
1% by HH LLC
PA
NY
Metro Two Hotel, LLC
100% by HHLP
FL
NY

 
2

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Entity
Ownership
State of Formation
Other Qualification

HT/CNL Metro Hotels, LP
33.33% by HHLP
66.67% by CNL Hospitality Partners, LP
DE
-
Chelsea Grand East, LLC
100% by HT / CNL Metro Hotels, LP
NY
-
44 New England Management Company
100% by HHLP
VA
-
HHM Leasehold Interests, Inc.
99% by Hersha Hospitality Management LP
1% by HHLP
DE
-
Hersha CNL TRS, Inc.
100% by HT / CNL Metro Hotels, LP
DE
-
Inn America, LLC
50% by HHLP
NJ
-

 
3

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SCHEDULE 3

Properties Encumbered by Liens Relating to Financing

Property
Lender
   
Hampton Inn
 
Carlisle
Lehman Brothers
Danville
Lehman Brothers
Selinsgrove
Lehman Brothers
Hershey
Waypoint Bank
Newnan
GECC
Peachtree City
Cheslea, NY
Linden, NJ
GECC
GECC
Yardville National Bank
Holiday Inn
 
Harrisburg
Lehman Brothers
Holiday Inn Express
 
Hershey
Lehman Brothers
New Columbia
Lehman Brothers
Duluth
Lehman Brothers
Long Island City, NY
Harrisburg, PA
GE Capital
Sovereign Bank (Line of Credit)
Doubletree Club
 
Jamaica, NY
GE Capital
Comfort Inn/Suites
 
Harrisburg
Lehman Brothers
Duluth
Frederick, MD
Lehman Brothers
Peoples Bank
Mainstay Suites/Sleep Inn
 
Valley Forge, PA
Sovereign Bank (Line of Credit)
Mainstay Suites
 
Frederick MD
Peoples Bank
   
Line of Credit
Sovereign Bank
   
Hilton Garden Inn
 
Edison, NJ
Yardville National Bank
Glastonbury, CT
GE Capital
Gettysburg, PA
M&T Bank
   
Residence Inn
 
Greenbelt, MD
Hersha Capital, Inc.
Framingham, MA
Central Cooprative Bank

 
1

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Property Lender
Courtyard by Marriott
 
Ewing, NJ
Yardville National Bank
   
Four Points Sheraton
 
Revere, MA
Citizens Bank of Massachusetts

 
2

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