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Exhibit 10.1

AGREEMENT OF SALE

THIS AGREEMENT OF SALE (this “Agreement”) is made this 24th day of October,
2005, by and between CHARLENE SCHWARTZ, an adult individual with an address of
1070 Eagle Road, Newtown, Pennsylvania 18940, LANGHORNE COURTYARD, INC., a
Pennsylvania corporation with an address of 1070 Eagle Road, Newtown,
Pennsylvania 18940, MT. LAUREL FFI, INC., a New Jersey corporation with an
address of 1070 Eagle Road, Newtown, Pennsylvania 18940 and BETHLEHEM FFI, INC.,
a Pennsylvania corporation with an address of 1070 Eagle Road, Newtown,
Pennsylvania 18940 (hereinafter collectively called “Seller”) and HERSHA
HOSPITALITY TRUST, a Maryland real estate investment trust with an address of
510 Walnut Street, 9th Floor, Philadelphia, Pennsylvania 19106 (hereinafter
called “Buyer”).

W I T N E S S E T H :

For and in consideration of the mutual undertakings contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby mutually acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:

1.     Definitions. The following terms shall have the following definitions.

“Accounts Receivable” means all amounts which Seller is entitled to receive from
the operation of the Hotel which are not paid as of the Settlement, including,
without limitation, charges for the use or occupancy of any guest, conference,
meeting or banquet rooms or other facilities at the Hotel, any restaurant, bar
or banquet services, or any other goods or services provided by or on behalf of
Seller at the Hotel, but expressly excluding any credit card charges and checks
which Seller has submitted for payment as of the Settlement.

“Accrued Vacation Pay” means the Compensation which the Employees are entitled
to receive for any vacation days accrued by such Employees as of the time in
question (computed at the rate of Compensation earned by such Rehired Employees
as of the time in question).

“Appurtenances” shall mean all appurtenances, hereditaments, easements and other
rights and privileges in any way pertaining or beneficial to the Land or the
Improvements.

“Asset Manager” shall have the meaning set forth in Section 12(a).

“Bethlehem Fairfield” shall mean the 103 room Fairfield Inn and Suites currently
operated by Seller on the Bethlehem Fairfield Property.

“Bethlehem Fairfield Property” shall mean the real property located at 2140
Motel Drive, Bethlehem, Pennsylvania, upon which Seller currently operates the
Bethlehem Fairfield, the legal description of which is attached hereto as
Exhibit A.

“Books and Records” shall mean all books and records located at the Hotel or in
the Newtown, Pennsylvania, offices of Solow, Inc., which relate exclusively to
the Hotel, but expressly excluding all documents and other materials which (i)
are legally privileged or constitute attorney work product, (ii) are subject to
a confidentiality agreement prohibiting their disclosure by Seller, or (iii)
constitute confidential internal assessments, reports, studies, memoranda, notes
or other correspondence, prepared by or on behalf of any officer or employee of
Seller or Manager, including, without limitation, all (A) internal financial
analyses, appraisals, tax returns, financial statements, (B) corporate or other
entity governance records, (C) Employee personnel files, (D) any work papers,
memoranda, analysis, correspondence and similar documents and materials prepared
by or for Seller or Manager in connection with the transaction described in this
Agreement.

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“Bookings” shall mean all bookings and reservations for guest, conference,
meeting rooms or other facilities at the Hotel, together with all deposits held
by Seller with respect thereto.

“Buyer Indemnified Parties” shall mean Buyer, Asset Manager and their partners,
officers, directors, parents, affiliates and employees, and each of their
respective heirs, executors, administrators, successors and assigns.

“Capital Transaction” shall mean a transaction pursuant to which (i) the Buyer
finances or refinances the Property or any portion thereof, (ii) all or any
portion of the Property sold, condemned, exchanged or otherwise disposed of,
(iii) insurance proceeds or other damages in respect of the Property are
recovered by the Buyer, or (iv) any other transaction that, in accordance with
generally accepted accounting principles, is considered capital in nature.
 
“Cash” shall mean all cash on hand or on deposit in any house bank, operating
account or other account maintained in connection with the ownership or
operation of the Hotel, including Charlene Schwartz’s personal bank, money
market or other similar depository accounts.

“Compensation” means all salaries and wages which the employees are entitled to
receive at the time in question, together with all employment taxes with respect
thereto, including, without limitation, any withholding or employer
contributions under the Federal Insurance Contribution Act and Federal
Unemployment Taxes Act, but expressly excluding all other compensation accrued
or payable to the Employees, including, without limitation, any (i) bonus or
incentive compensation; (ii) accrued vacation days, sick days and personal days;
and (iii) any health, welfare and other benefits provided to the Employees under
the Seller Employee Plans, and employer contributions to, and amounts paid or
accrued under, the Seller Employee Plans or Seller IRA Plan for the benefit of
the Employees.

“Confidential Information” has the meaning set forth in Section 10 of this
Agreement.

“Contracts” shall mean the contracts listed on the attached Schedule 1-1.
 
“Cut-Off Time” shall mean 11:59 p.m. on the day preceding the Settlement Date,
or such other time expressly provided in this Agreement.

“Deeds” shall collectively mean (i) with respect to the Pennsylvania Property,
special warranty deeds wherein Seller shall convey title to each property
comprising the Pennsylvania Property, subject to the Permitted Exceptions that
are applicable to the respective Pennsylvania Property and (ii) with respect to
the New Jersey Property, a bargain and sale deed with covenants against
grantor’s acts wherein Seller shall convey to Buyer title to the New Jersey
Property subject to the Permitted Exceptions that are applicable to the New
Jersey Property.

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“Due Diligence Period” shall mean the period commencing on Tuesday, October 25,
2005, and ending at 5:00 p.m. on November 25, 2005, provided that the Due
Diligence Period may be extended, at Buyer’s sole option, for the Extended Due
Diligence Period.

“Employees” means all employees of Seller or Manager, or any of their
affiliates, who are employed full-time or part-time at the Hotels at the time in
question.

“Employer” means the Seller, Manager or any of their affiliates which employs
the Employees.

“Escrow Holder” shall mean Buyer’s Title Company.
 
“Excluded Property” shall mean the property, assets, rights and interests set
forth on Schedule 1-2, which are not included in the Property and are not being
sold to Buyer.

“Extended Due Diligence Period” shall mean a fifteen (15) day extension of the
Due Diligence Period, ending at 5:00 p.m. on December 10, 2005. Buyer shall have
the right to extend the Due Diligence Period for the Extended Due Diligence
Period by giving Seller written notice thereof prior to the end of the Due
Diligence Period.

“Guest Ledger” means any and all charges accrued to the open accounts of any
guests or customers at the Hotel as of the Cut-Off Time for the use and
occupancy of any guest, conference, meeting or banquet rooms or other facilities
at the Hotel, any restaurant, bar or banquet services, or any other goods or
services provided by or on behalf of Seller.

“Hazardous Substances” shall mean any substance or material whose presence,
nature, quantity or intensity of existence, use, manufacture, disposal,
transportation, spill, release or effect, either by itself or in combination
with other materials is either: (1) potentially injurious to the public health,
safety or welfare, the environment or the Property, (2) regulated, monitored or
defined as a hazardous or toxic substance or waste by any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (“Governmental Body”), or (3) a basis for
liability of the owner of the Property to any Governmental Body or third party,
and shall include, but not be limited to, hydrocarbons, petroleum, gasoline,
crude oil, or any products, by-products or components thereof, and asbestos and
mold.

“Hotel” or “Hotels” shall mean the hotel businesses operated by Seller on the
Real Property.

“Improvements” shall mean the buildings (including all mechanical and utility
systems and fixtures) and improvements constructed on the Real Property.

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“Land” shall mean collectively the New Jersey Property and the Pennsylvania
Property.

“Langhorne Courtyard” shall mean the 118 room Courtyard by Marriott currently
operated by Seller on the Langhorne Courtyard Property.

“Langhorne Courtyard Property” shall mean the real property located at 5 N.
Cabot Boulevard, Langhorne, Pennsylvania, upon which Seller currently operates
the Langhorne Courtyard, the legal description of which is attached hereto as
Exhibit A-1.

“Licenses, Permits and Approvals” shall mean all certificates, licenses
(including, without limitation, any and all liquor licenses for the Hotels, if
any), permits, authorizations and approvals issued for or with respect to the
Personal Property or the Real Property by governmental and quasi-governmental
authorities having jurisdiction, to the extent transferable.

“Manager” shall mean collectively the affiliates of Seller that have been
engaged by Seller to manage the Hotels. For purposes of this Agreement, Solow,
Inc. is not a Manager.

“Management Agreement” shall have the meaning set forth in Section 12(a).

“Marriott” shall mean Marriott International, Inc. or its affiliate.

“Mt. Laurel Fairfield” shall mean the 118 room Fairfield Inn and Suites which is
currently operated by Seller on the New Jersey Property.

“NOI” shall mean, solely for purposes of the earn-out set forth in Section
12(g), for any period, Operating Revenues less (i) Operating Expenses; (ii) 4%
of revenues for the management fees (notwithstanding the fact that Buyer will be
paying a 3.5% management fee to Seller or its affiliate under the Management
Agreement and a 1% management fee to Asset Manager under the Asset Management
Agreement); (iii) 3% of revenues for furniture, fixtures and equipment (“FF&E”)
reserves; (iv) real property and personal property taxes, assessments and other
taxes levied in connection with the Property and FF&E; (v) insurance premiums
and deductibles and (vi) scheduled lease payments under the Van Lease.

“New Jersey Property” shall mean the real property located at 350 Century
Parkway, Mt. Laurel, New Jersey, upon which Seller currently operates the Mt.
Laurel Fairfield, the legal description of which is attached hereto as Exhibit
A-2.

“Operating Expenses” shall mean, for any period, the current obligations of the
Buyer or its affiliates with respect to the Property for such period, determined
in accordance with an accounting system agreed upon by Buyer and Seller during
the Due Diligence Period, or Extended Due Diligence Period, if properly
extended, consistently applied, for operating expenses of the Property, but
specifically excluding items (ii), (iii), (iv) and (v) within the definition of
“NOI” above and also excluding depreciation and principal and interest payments,
rents or other similar payments in connection with any financing of real
property, personal property or improvements.

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“Operating Revenues” shall mean, for any period, the gross revenues of Buyer
arising from the ownership of the Property during such period determined in
accordance with an accounting system agreed upon by Buyer and Seller during the
Due Diligence Period, or Extended Due Diligence Period, if properly extended,
but specifically excluding the proceeds of Capital Transactions and capital
contribution by the Buyer or its affiliates.

“Permitted Exceptions” shall have the meaning set forth in Section 4(a) below.

“Personal Property” shall mean (i) all fixtures (other then those which
constitute Improvements), furniture, furnishings, equipment, machinery,
appliances, art work and other items of tangible personal property which are
located at one of the Hotels and used exclusively in the operation of the
Hotels, or ordered for future use at one of the Hotels as of the Settlement;
(ii) all linens, uniforms, engineering, maintenance, cleaning and housekeeping
supplies, matches and ashtrays, soap and other toiletries, stationery, menus and
other printed materials, and all other similar materials and supplies, which are
located at one of the Hotels or ordered for future use at one of the Hotels as
of the Settlement; (iii) any trademarks, trade names, service marks and other
intellectual property rights set forth in Schedule 1-3; (iv) warranties and
guaranties held by Seller pursuant to any Contracts or with respect to any
Improvements or Personal Property; (v) direct dial telephone numbers for the
Hotels; (vi) all hardware and software computer and information technology
systems at the Hotels; (vii) Books and Records and (viii) any other tangible or
intangible personal property located at one of the Hotels which is owned by
Seller and used exclusively in the operation of one of the Hotels, but
specifically excluding (A) Cash, (B) Accounts Receivable, (C) the Excluded
Property, (D) the Third Party Property, (E) refundable escrows, such as township
escrows, held by any governmental entity with jurisdiction over the Property and
(F) all assets of Solow, Inc. located at Solow’s corporate offices in Newtown,
Pennsylvania.

“Prepaid Expenses” shall mean all prepaid expenses to the extent Seller receives
a credit for such prepaid expenses at Settlement as set forth in Section 7(e).

“Property” shall mean collectively the Real Property, the Personal Property, the
Hotels and the Improvements.

“Pennsylvania Property” shall mean collectively (i) the Bethlehem Fairfield
Property and (ii) the Langhorne Courtyard Property.

“Real Property” shall mean collectively the New Jersey Property, the
Pennsylvania Property, the Improvements constructed on the New Jersey Property
and the Pennsylvania Property and the Appurtenances relating thereto.

“Seller IRA Plan” shall mean the IRA Plan maintained by Seller, Manager or an
affiliate thereof for the benefit of the Employees.

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“Seller Employee Plans” shall mean all plans and programs maintained by or on
behalf of Seller for the health, welfare or benefit of any Employees and/or
their spouses, dependents or other qualified beneficiaries.

“Seller Indemnified Parties” shall have the meaning set forth in Section 13(b).

“Settlement” shall have the meaning set forth in Section 7(a).

“Settlement Date” shall have the meaning set forth in Section 7(a).

“Termination Date” shall have the meaning set forth in Section 21.

“Third-Party Property” shall mean any fixtures or personal property owned by (i)
the lessor under the Van Lease, (ii) the supplier or vendor providing vending
equipment such as soda or candy machines in connection with the sale of such
supplier or vendor’s products, (iii) Marriott, (iv) any Employees, or (vi) any
guests or customers of the Hotel. 

“Van Lease” shall mean the lease for the passenger van currently utilized by
Seller in connection with the Langhorne Courtyard. 

“WARN Act” means the Worker’s Adjustment and Retraining Notification Act of
1988, 29 U.S.C. Section 2102, et seq., and any similar state and local
applicable law, as amended from time to time, and any regulations, rules and
guidance issued pursuant thereto.
 
2.     Agreement to Sell. Subject to the terms and conditions set forth in this
Agreement, Seller hereby agrees to sell and convey the Property to Buyer, and
Buyer hereby agrees to purchase the Property from Seller.
 
3.     Purchase Price.

(a)    The total consideration and purchase price (the “Purchase Price”), which
Buyer agrees to pay to Seller and which Seller agrees to accept for the Property
is Forty Million Five Hundred Thousand U.S. Dollars ($40,500,000.00), subject to
the prorations and adjustments described herein, payable as follows:

     
Federal wire transfer at signing of this Agreement (the “Deposit”)
$100,000.00
       
Federally wired funds at Settlement
$40,400,000.00
 
TOTAL                                
$40,500,000.00
 

(b)    The Deposit shall be paid to Buyer’s Title Company (defined below)
(“Escrow Holder”) and shall be placed by Escrow Holder in an interest bearing
escrow account pending Settlement (as hereinafter defined). All interest earned
on the Deposit shall be considered part of the Deposit. The Deposit will be
credited against the Purchase Price at Settlement. If Settlement does not occur
hereunder, the Deposit shall be paid to party entitled thereto in accordance
with this Agreement.

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(c)    Seller and Buyer hereby agree that the Purchase Price shall be allocated
among the Land, Improvements and Personal Property as set forth in Schedule 3(c)
for federal, state and local tax purposes. Seller and Buyer acknowledge and
agree that the allocation set forth in Schedule 3(c) represents an arm’s length
agreement based on the Parties’ best judgment as to the fair market value of the
Property. Seller and Buyer shall file all federal, state and local tax returns
and related tax documents consistent with the allocation set forth in Schedule
3(c), and shall not make any statement or take any position in connection with
any tax return, refund claim, audit, litigation or otherwise, which is
inconsistent with such allocation. This Section 3(c) shall survive the
Settlement.

4.    Title.

(a)    At Settlement, Seller shall convey to Buyer good and marketable title to
the Real Property, insurable at regular rates by a reputable title insurance
company licensed to do business in the Commonwealth of Pennsylvania and the
State of New Jersey (the “Title Company”), free and clear of all liens,
encumbrances, and restrictions other than the following (the “Permitted
Exceptions”): (i) the lien of real estate taxes, water rent and sewer charges
that are not due and payable on the Settlement Date, (ii) all easements,
restrictions, or covenants of record that do not restrict or prohibit the use
and operation of the Property or the use of the Property, or any portion
thereof, as a hotel , (iii) special assessments which have become a lien on the
Real Property as of the Settlement Date (but only for installments due after the
Settlement Date), (iv) rights of the public and adjoining land owners in
highways, streets, roads and lanes bounding the Real Property, (v) retaining
walls and other walls, bushes, trees, hedges, fences and the like extending from
or onto the Real Property and any portion of the Real Property lying in the bed
of any public street, (vi) standard conditions and exceptions to title insurance
contained in the ALTA 1992 Owner’s Standard Form B Title Insurance Policy, (vii)
such state of facts as a current and accurate survey and/or physical inspection
of the Real Property might disclose, provided that such state of facts shall not
include facts that restrict or prohibit, in any way, the current use and
operation of the Property or that in any way violate any local, state or federal
law, regulation, code or ordinance, including without limitation, those
pertaining to zoning, (viii) subsurface conditions affecting the Real Property
not disclosed by any instrument recorded in the land records of the county in
which the applicable Real Property is located and to which seller has no notice
or knowledge, and (ix) any other encumbrances and restrictions appearing on the
Title Commitment (defined below) that are deemed to be Permitted Exceptions by
virtue of Section 4(b) below.

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(b)    Upon the full execution of this Agreement, Buyer shall order from the
Title Company and promptly deliver to Seller, when received by Buyer, a
commitment to issue an owner’s policy of title insurance reflecting the status
of title to the Real Property (the “Title Commitment”). Buyer shall have until
the expiration of the Due Diligence Period or the Extended Due Diligence Period,
if properly extended, such time being strictly of the essence, to notify Seller
in writing of any objection which Buyer may have as a result of any exception
reported in the Title Commitment or any matter depicted on its survey of the
Property, which exception or matter is not a Permitted Exception. Solely to the
extent that Seller receives written notice from Buyer of any such objection on
or before the expiration of the Due Diligence Period or the Extended Due
Diligence Period, if properly extended, said objection shall be deemed a “Title
Objection”. To the extent that Seller does not receive notice from Buyer of any
such objection on or before the expiration of the Due Diligence Period, or the
Extended Due Diligence Period, if properly extended, said objection and the
exception or matter to which said objection relates shall be deemed a Permitted
Exception and Buyer shall take title to the Real Property subject thereto.
Seller shall have no obligation whatsoever to eliminate any objection, exception
or matter, which is so deemed a Permitted Exception. Notwithstanding the
forgoing, if between the end of the Due Diligence Period, or the Extended Due
Diligence Period, if properly extended, and the Settlement Date, Buyer obtains a
bring down search from its Title Company and such search discloses any title
defect objectionable to Buyer, other than a Permitted Exception, which was not
set forth in the Title Commitment (a “Subsequent Defect”), Buyer shall provide
Seller with a copy of such bring down search and a legible copy of the
Subsequent Defect within five (5) days following Buyer’s receipt of such bring
down search and such Subsequent Defect shall be deemed a Title Objection for
purposes of this Section 4(b), and the Settlement Date shall be extended by the
times set forth in Section 4(c) if necessary in order to allow Seller to
determine whether to eliminate such Title Objection and to actually eliminate
such Title Objection if so elected by Seller.

(c)    Seller may, at its sole option, elect to eliminate from Buyer’s final
title policy any particular Title Objection. Seller shall make said election by
written notice to Buyer given within five (5) days of Seller’s receipt of timely
written notice of said particular Title Objection. If Seller elects to eliminate
any such Title Objection, and the elimination of such Title Objection requires
additional time to eliminate such Title Objection, then and in either of those
events, Seller may extend the Settlement Date for an additional reasonable
period of time, not to exceed thirty (30) days. Such extension of the Settlement
Date by Seller shall not diminish Seller’s or Buyer’s rights under the remaining
provisions of this Section 4(c). If Seller is unable or does not desire to
eliminate any one or more particular Title Objections, Seller shall so notify
Buyer in writing within ten (10) days of Seller’s receipt of timely written
notice of said particular Title Objections. With respect to Title Objections
which Seller has initially elected to eliminate, if, despite Seller’s good faith
efforts, Seller reasonably determines that it will be unable to eliminate any
such Title Objection on or before the Settlement Date or any extension thereof,
Seller shall so notify Buyer in writing within ten (10) business days of said
determination. Upon receipt of either of the notices referred to in the two
immediately preceding sentences hereof, Buyer shall have the option to either
waive such Title Objections in writing and consummate the transaction
contemplated herein without abatement of the Purchase Price or terminate this
Agreement at any time within ten (10) business days after receipt of Seller’s
notice, such ten (10) business day period being strictly of the essence. If no
election to terminate is made in writing by Buyer within such ten (10) business
day period, Buyer shall automatically and conclusively be deemed to have
irrevocably waived all such Title Objections and shall take title to the Real
Property subject thereto without any adjustment or abatement of the Purchase
Price.

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(d)   In the event of proper termination under this Section 4, this Agreement
shall be deemed null and void, and the Deposit, and interest earned thereon,
shall be returned to Buyer and the parties hereto shall have no further
objections to or recourse against each other with regard to the matters provided
for in this Agreement, except as specifically set forth herein and except for
rights and objections which expressly survive the termination hereof.

5.    Representations and Warranties.

(a)   Seller hereby makes the following representations and warranties to Buyer
for the purpose of inducing Buyer to execute and deliver this Agreement and to
consummate the transactions contemplated by this Agreement, each of which
representations and warranties is true and correct on the date of this Agreement
and shall be true and correct as of the Settlement Date:

(i)    Seller has full legal and equitable title to the Personal Property and
Seller has full legal and equitable fee simple title to the Real Property and
the legal power to convey all right, title and interest in and to the Property
to Buyer in accordance with this Agreement. There is no existing agreement,
commitment, option or right with, in or to any person or entity to acquire the
Real Property or any interest therein.

(ii)   To the best of Seller’s knowledge, Seller has not received any notices of
violation of law or ordinance with respect to the Property that are outstanding.
Seller has not received any notice of special tax or public assessment against
the Property for public improvements that will remain unpaid at Settlement.

(iii)   Seller is an adult individual who has the sole legal capacity and
authority to execute, deliver and perform this Agreement.

(iv)   Seller is not legally prohibited from (i) executing or delivering this
Agreement, (ii) complying with or performing the terms of this Agreement, or
(iii) consummating the transactions contemplated by this Agreement. The
execution and performance by Seller of this Agreement will not be in violation
of or cause a default under any applicable law, agreement, instrument, covenant,
condition, restriction, judgment, order or decree.

(v)    No further consent, waiver, approval, or authorization of, or filing,
registration, or qualification with, or notice to, any governmental authority or
any other entity or person is required to be made, obtained, or given by Seller
in connection with the execution, delivery, and performance of this Agreement,
other than the consent of Marriott as more particularly described in Section
7(f)(iv) below.

(vi)           There are no leases or other occupancy agreements for all or any
portion of the Real Property, and there are no operating, equipment or capital
leases other than the Van Lease. 

(vii)          Seller is a “United States person” within the meaning of Sections
1445(f)(3) and 7701(a)(30) of the Internal Revenue Code of 1986, as amended.

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(viii)         There are no lawsuits, actions, suits, claims or proceedings
pending against or affecting Seller or the Property or any part of or interest
in the Property. To Seller’s knowledge, there are no other lawsuits, actions,
suits, claims or proceedings threatened in writing against or affecting Seller
or the Property or any part of or interest in the Property, except for a
possible lawsuit against Seller by a former housekeeper at the Langhorne
Courtyard alleging improper termination (the “Langhorne Courtyard Claim”).
Seller shall indemnify, defend and hold the Buyer Indemnified Parties harmless
from and against any and all claims, costs, penalties, damages, losses,
liabilities and expenses that any of the Buyer Indemnified Parties may at any
time incur as a result of the Langhorne Courtyard Claim.

(ix)    The “Contract Schedule” set forth on Schedule 1-1 contains a complete
and accurate list of all contracts affecting the Property. During the Due
Diligence Period, Seller will deliver to Buyer true and complete copies of each
of the Contracts listed on the Contract Schedule.
 
(x)    The names of all Employees and the salary of each employee, and whether
each employee is a full or part-time employee, are set forth on Schedule
5(a)(x). Seller is not a party to any written employment or compensation
agreements with any of the Employees. Seller is not a party to any collective
bargaining agreement with any labor union. Seller has not received notice of
efforts to organize a collecting bargaining group among all of or any of the
Employees.

(xi)    Neither the execution, delivery, or performance by Seller of this
Agreement, nor the consummation of the transactions contemplated hereby, nor
compliance by Seller with any of the provisions hereof, will violate any
judgment, ruling, order, writ, injunction, decree, statute, rule, regulation or
agreement applicable to the Seller or the Property.

(xii)   There is no loan agreement, guarantee, note, bond, indenture and other
debt instrument, lease and other contract to which the Seller is a party or by
which the Property is bound other than the Permitted Exceptions or such other
documents that will be satisfied at or prior to Settlement.

(xiii)         All of the Seller’s and Manager’s insurance policies for the
Property (“Insurance Policies”) are valid and in full force and effect and the
Seller shall pay all future premiums for such policies up to the Settlement Date
(and any replacements thereof) on or before the due date therefor. The Seller
shall pay all premiums on, and shall not cancel or allow to expire, any of the
Insurance Policies prior to the Settlement Date unless such policy is replaced,
without any lapse of coverage, by another policy or policies providing coverage
at least as extensive as the policy or policies being replaced. The Insurance
Policies are attached hereto as Schedule 5(a)(xiii).

(xiv)         To the Seller’s knowledge, except as otherwise disclosed in
writing to the Buyer prior to the end of the Due Diligence Period, for each of
the accounting years, when a given year is taken as a whole, all of the Seller’s
and the Property’s financial information and financial statements and reports
previously delivered or to be delivered to the Buyer is and shall be correct and
complete in all material respects. Buyer acknowledges that Seller does not
prepare or have prepared compiled, reviewed or audited financial statements so
the foregoing representation is not based on Seller’s review of compiled,
reviewed or audited financial statements.
 
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(xv)         Except for matters in Buyer's environmental reports and statements,
and matters in Seller’s environmental reports that are delivered to Buyer during
the Due Diligence Period, and except for cleaning supplies and the like used in
the ordinary course of the operations of the Hotels, Seller has no knowledge
(a) of the presence of any Hazardous Substances on the Property, or any portion
thereof, or, (b) of any spills, releases, discharges, or disposal of Hazardous
Substances that have occurred or are presently occurring on or onto the
Property, and or any portion thereof, or (c) of the presence of any PCB
transformers serving, or stored on, the Property, or any portion thereof, and
Seller has no knowledge of any failure to comply with any applicable local,
state and federal environmental laws, regulations, ordinances and administrative
and judicial orders relating to the generation, recycling, reuse, sale, storage,
handling, transport and disposal of any Hazardous Substances.

(xvi)         The franchise licenses from Marriott with respect to each Hotel
(each a “Franchise License”) are valid and in full force and effect, and on the
Settlement Date Seller will not be in default with respect thereto (with or
without the giving of any required notice and/or lapse of time). Subject to
Buyer obtaining Marriott Approval, neither the execution, delivery, or
performance by the Seller of this Agreement, nor the consummation of the
transactions contemplated hereby, nor compliance by the Seller with any of the
provisions hereof, will violate, conflict with, result in a breach of any
provision of, constitute a default (or an event that, with notice or lapse of
time or both, would constitute a default) under, result in the termination of,
or result in a right of termination under any of the terms, conditions, or
provisions of, any Franchise License.

(xvii)        To Seller’s knowledge, there are no violations of any
environmental laws or regulations relating to Hazardous Substances respecting
the Property or the Hotels.

(xviii)       To the best of Seller’s knowledge, Seller possesses all licenses
(including, without limitation, the liquor license for the Langhorne Courtyard),
permits and approvals required by any governmental or quasi-governmental agency,
body or officer for the ownership, operation and use of the Property or any part
thereof (collectively “Authorizations”), each of which is valid and in full
force and effect, and, to the best of Seller’s knowledge, no provision,
condition or limitation of any of the Authorizations has been breached or
violated.  To the best of Seller’s knowledge, the Seller has not misrepresented
or failed to disclose any relevant fact in obtaining all Authorizations, and the
Seller has no knowledge of any change in the circumstances under which those
Authorizations were obtained that result in their termination, suspension,
modification or limitation other than the Seller’s liquor license, if any.  

(xviii)        The provisions of this Section 5(a) shall survive Settlement for
the period set forth in Section 21 below.

(b)    Buyer, to induce Seller to enter into this Agreement and to complete
Settlement, makes the following representations and warranties to Seller, which
representations and warranties are true and correct as of the date of this
Agreement, and shall be true and correct at and as of the Settlement Date in all
respects as though such representations and warranties were made both at and as
of the date of this Agreement, and at and as of the Settlement Date.

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(i)    Buyer is a real estate investment trust, duly organized, qualified to do
business and in good standing under the laws of the State of Maryland. The
execution and delivery of this Agreement by the signatories hereto on behalf of
Buyer and the performance of this Agreement by Buyer have been duly authorized
by Buyer. Buyer has the legal capacity and authority to execute, deliver and
perform this Agreement. Buyer shall have the right to assign this Agreement to
an entity in which it will be a member or partner, either directly or
indirectly, and which entity shall have the requisite power, authority and
financial ability required of Buyer under this Agreement, but such assignment
shall not relieve Buyer from liability under this Agreement.

(ii)   Buyer is not prohibited from (i) executing or delivering this Agreement,
(ii) complying with or performing the terms of this Agreement, or (iii)
consummating the transactions contemplated by this Agreement. Execution and
performance by Buyer of this Agreement will not be in violation or cause a
default under any applicable law, agreement, instrument, covenant, condition,
restriction, judgment, order or decree.

(iii)           No further consent, waiver, approval, or authorization of, or
filing, registration, or qualification with, or notice to, any governmental
authority or any other entity or person is required to be made, obtained, or
given by Buyer in connection with the execution, delivery, and performance of
this Agreement.

(iv)          Buyer, or its assignee, has or will have, at the Settlement Date,
all necessary funds, or commitments for necessary funds, to complete the
purchase contemplated by this Agreement.

(v)   The provisions of this Section 5(b) shall survive Settlement for the
period set forth in Section 21 below.

6.    Due Diligence.

(a)    Subject to Section 10 below, Buyer shall have the right during the Due
Diligence Period to review the Van Lease, Licenses, Permits and Approvals,
Contracts, Books and Records, Bookings and legal compliance of the Property and
to go in, on or over the Property for the purpose of conducting building
surveys, inspections, soil tests, environmental testing, feasibility studies and
any and all other studies, tests and examinations thereof as Buyer may desire.
Subject to Section 10 below, Seller shall permit Buyer and its agents reasonable
access to the Property, upon forty-eight hours advance notice to Seller, to
enable Buyer to conduct such inspections. Buyer shall repair any and all damage
by reason of any such testing and shall indemnify and save Seller harmless for
any liability in connection therewith. In the exercise of its rights pursuant to
this Section 6, Buyer shall comply fully with its obligations under Section 10
below and shall not interfere with the conduct of Seller's operations being
conducted on the Property and shall give Seller reasonable advance notice of any
such activities Buyer plans to conduct on the Property. Before entering upon the
Property, Buyer shall deliver to Seller a certificate of insurance evidencing
Buyer’s maintenance of general liability insurance having a single combined
limit of not less than $1,000,000.00 and naming Seller and its Manager as
additional insured. Seller shall cooperate with Buyer in good faith to permit
Buyer to expeditiously conduct due diligence on the Property in accordance with
this Agreement. 

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Promptly following the commencement of the Due Diligence Period, Seller shall
provide the Buyer access to all records and information concerning the Property
to the extent in Seller’s possession, and the Seller shall make available to the
Buyer, its auditors, engineers, attorneys for inspection at the offices of
Solow, Inc. in Newtown, Pennsylvania or at the individual Hotels, depending on
where the applicable records are currently located, copies of all existing
architectural and engineering studies, ALTA surveys, existing title insurance
policies, zoning and site plan materials, environmental audits, environmental
reports, zoning compliance letters, real and personal property tax records, STAR
reports, Seller’s internally-prepared financial reports and statements for the
past three years (including a year to date statement of net income if
available), existing franchise agreements, current franchise property
improvement plans, the current deed, historical reports on capital expenditures,
forward-looking capital budget, permits, licenses, operating and services
contracts, and all other materials or information, if any, relating to the
Property to the extent same are in Seller’s possession. Seller shall also
deliver relevant portions of Seller’s income tax returns solely to the extent
that such portions relate solely to the operations of the Hotels. Buyer
acknowledges that Charlene Schwartz shall not be required to deliver full copies
of her personal income tax returns. Except as otherwise set forth in Section
5(a) above, Seller makes no representation or warranty concerning the accuracy
or authenticity of any information contained in such materials other than the
accuracy of the historical reports on capital expenditures and the
forward-looking budget prepared by Seller and, subject to the limitations
contained in Section 5(a)(xiv), Seller’s financial statements.

(b)    Buyer shall have the right to terminate this Agreement for any reason or
no reason whatsoever by delivering written notice thereof to Seller at any time
prior to 5:00 p.m. on the last day of the Due Diligence Period or the Extended
Due Diligence Period, if applicable (SAID TIME AND DATE BEING STRICTLY OF THE
ESSENCE). The failure of Buyer to terminate this Agreement as aforesaid shall
constitute a waiver of Buyer’s right to terminate this Agreement pursuant to
this Section 6.

(c)    BUYER ACKNOWLEDGES THAT IT HAS BEEN AFFORDED AND/OR SHALL BE AFFORDED THE
OPPORTUNITY FOR ITSELF AND ITS ENGINEERS, CONTRACTORS, ACCOUNTANTS AND OTHER
REPRESENTATIVES OF ITS CHOOSING, TO INSPECT THE PROPERTY. BUYER EXPRESSLY
ACKNOWLEDGES THAT, EXCEPT FOR SELLER’S REPRESENTATIONS AND WARRANTIES SET FORTH
IN SECTION 5(a), IT IS BUYING THE PROPERTY IN ITS “AS IS” CONDITION ON THE DATE
HEREOF, SUBJECT TO REASONABLE USE, WEAR AND TEAR AND NORMAL DEPRECIATION BETWEEN
THE DATE HEREOF AND SETTLEMENT. EXCEPT FOR MATTERS RELATED TO SELLER’S
REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 5(a), BUYER RELEASES SELLER
FROM ALL RESPONSIBILITY AND LIABILITY REGARDING THE CONDITION OR UTILITY OF THE
PROPERTY.

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(d)    BUYER AFFIRMS THAT SELLER HAS NOT MADE, NOR HAS BUYER RELIED UPON, ANY
REPRESENTATION, EXPRESS OR IMPLIED, OR PROMISE MADE BY SELLER, OR ANY OF ITS
EMPLOYEES OR AGENTS, OR ANY BROKER, WITH RESPECT TO THE PROPERTY OR ITS
OPERATION, EXCEPT AS SPECIFICALLY SET FORTH IN SECTION 5(a) OR ELSEWHERE IN THIS
AGREEMENT, IF ANY. EXCEPT AS SET FORTH IN SECTION 5(a), SELLER HEREBY EXPRESSLY
DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, RELATING IN ANY WAY TO THE
PROPERTY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY PROVIDED FOR UNDER
STATUTORY OR COMMON LAW OR THE UNIFORM COMMERCIAL CODE, INCLUDING BUT NOT
LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
BOTH BUYER AND SELLER ARE ACTING AT ARM’S LENGTH TO PROTECT THEIR OWN INTERESTS,
AND BOTH BUYER AND SELLER SHALL USE THEIR OWN INDEPENDENT BUSINESS JUDGMENT
CONCERNING THE SALE AND PURCHASE OF THE PROPERTY. BUYER HAS COMPLETED OR PRIOR
TO SETTLEMENT SHALL HAVE COMPLETED TO ITS SATISFACTION, ALL INVESTIGATIONS,
INSPECTIONS AND TESTS WHICH BUYER DEEMS NECESSARY IN ITS SOLE DISCRETION TO
DETERMINE, AMONG OTHER THINGS: (i) THE CONDITION OF THE PROPERTY, INCLUDING, BUT
NOT LIMITED TO, THE SOIL CONDITION OF THE PROPERTY, THE EXISTENCE OF ANY
ENVIRONMENTAL CONDITION, AND THE EXISTENCE OF PATENT OR LATENT DEFECTS IN
CONSTRUCTION OF THE IMPROVEMENTS ON THE REAL PROPERTY; (ii) THE CONDITION OF
TITLE TO THE REAL PROPERTY; AND (iii) THE STATUS OF ALL BUILDING CODE, ZONING
AND OTHER APPLICABLE GOVERNMENTAL REQUIREMENTS OF WHATEVER KIND REGARDING THE
REAL PROPERTY OR ANY INTENDED USE OF THE REAL PROPERTY, INCLUDING, WITHOUT
LIMITATION, THE STATUS OF ANY PERMIT, APPLICATION, LICENSE, APPROVAL,
CERTIFICATE OR OTHER INTANGIBLE RIGHT OF WHATEVER KIND REGARDING THE REAL
PROPERTY AND THE HOTELS, AND (iv) THE STATUS AND EFFECT OF ALL RECORDED
CONVENANTS AND RESTRICTIONS RELATING TO THE PROPERTY, IT BEING AGREED AS SET
FORTH ABOVE THAT SELLER SHALL GIVE NO WARRANTY AND MAKE NO REPRESENTATION,
EXCEPT FOR THOSE SET FORTH IN SECTION 5(a), REGARDING SUCH MATTERS. BUYER
ACKNOWLEDGES THAT, EXCEPT FOR MATTERS RELATED TO SELLER’S REPRESENTATIONS AND
WARRANTIES SET FORTH IN SECTION 5(a), IT AGREES TO ACCEPT CONVEYANCE OF THE REAL
PROPERTY AT SETTLEMENT IN ITS “AS-IS, WHERE-IS” PHYSICAL CONDITION AS OF THE
SETTLEMENT DATE, SOLELY BASED UPON ITS RELIANCE ON ITS OWN INVESTIGATIONS,
INSPECTIONS AND JUDGMENT.

(e)    If this Agreement is properly terminated in accordance with Section 6(b)
above, the Deposit shall be returned to Buyer and the parties hereto shall have
no further objections to or recourse against each other with regard to the
matters provided for in this Agreement, except as specifically set forth herein
and except for rights and objections which expressly survive the termination
hereof.

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(f)    During the Due Diligence Period, or the Extended Due Diligence Period, if
properly extended, the parties shall use their diligent good faith efforts to
agree upon the accounting system to be used to determine Operating Revenues and
Operating Expenses. The agreed-upon accounting system shall be documented in a
writing to be signed by Buyer and Seller at Settlement.

7.    Settlement.

(a)    Settlement of the conveyance of the Property to Buyer shall be made on
the fifteenth (15th) day following the expiration of the Due Diligence Period or
the Extended Due Diligence Period, if properly extended, or the next business
day if such fifteenth (15th) day is not a business day (“Settlement Date”),
commencing at 10:00 a.m. (prevailing time) at the offices of Sirlin Gallogly &
Lesser, P.C., 1529 Walnut Street, Suite 600, Philadelphia, Pennsylvania 19102,
the Center City Philadelphia offices of Buyer’s Title Company or the Center City
Philadelphia offices of counsel to Buyer’s mortgagee (“Settlement”). The date
and time of Settlement are hereby agreed to be of the essence of this Agreement.

(b)    Real estate taxes; rents; water and sewer rentals; gas, telephone,
electric and other utility charges; any other governmental tax or charge levied
or assessed against the Property; and any other items or charges which are
properly apportionable under local law or custom shall be apportioned on a per
diem basis as of the Settlement Date, with Buyer being considered the owner on
the Settlement Date.

(c)    Buyer and Seller shall evenly divide and evenly pay all state and local
realty transfer taxes or transfer fees applicable to the sale set forth in this
Agreement.

(d)    Possession of the Real Property is to be delivered by delivery of an
executed Deed and all keys to the Real Property in Seller’s possession (which
keys may either be delivered to the Settlement or left at the respective Real
Property).

(e)    The items of revenue and expense with respect to the Hotel set forth in
this Section 7(e) shall be prorated between Seller and Buyer as of the Cut-Off
Time, so that the Settlement Date is a day of income and expense for Buyer.
Buyer shall receive a credit for items of expense in this Section 7(e) to the
extent the same are accrued or due and payable but unpaid as of the Cut-Off Time
in which case Buyer shall be obligated to pay such expense, and Seller shall
receive a credit for any of the items of expense in this Section 7(e) which have
been paid prior to or at the Settlement or will be paid by Seller after the
Settlement to the extent such payment related to any period of time after the
Cut-Off Time.

(i)    Buyer shall receive a credit for all prepaid deposits for Bookings
scheduled for accommodations or events on or after the Settlement Date which
Buyer is obligated to honor pursuant to this Agreement, except to the extent
such deposits are transferred to Buyer.

(ii)    Seller shall remove all monies from all vending machines, laundry
machines, pay telephones and other coin-operated equipment as of the Cut-Off
Time and shall retain all monies collected therefrom as of the Cut-Off Time, and
Buyer shall be entitled to any monies collected therefrom after the Cut-Off
Time.

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(iii)   Except to the extent an adjustment or proration is made under another
subsection of this Section, (i) Seller shall pay in full prior to the Settlement
all amounts payable to vendors or other suppliers of good or services to the
Hotel (the “Trade Payables”) which are due and payable as of the Settlement Date
for which goods or services have been delivered to the Hotel prior to
Settlement, and (ii) Buyer shall receive a credit for the amount of such Trade
Payables which have accrued, but are not yet due and payable as of the
Settlement Date, and Buyer shall pay all such Trade Payables accrued as of the
Settlement Date when such Trade Payables becomes due and payable; provided,
however, Seller and Buyer shall reprorate the amount of credit for any Trade
Payables and pay any deficiency in the original proration to the other Party
promptly upon receipt of the actual bill for such goods or services. Seller
shall receive a credit for all advance payments or deposits made with respect to
goods and services ordered in the ordinary course of business, but not delivered
to the Hotel prior to the Settlement Date, and Buyer shall pay the amounts which
become due and payable for such goods and services which were ordered prior to
Settlement but not delivered to the Hotel prior to the Settlement Date.
Notwithstanding the foregoing, Seller shall pay for (x) the upgraded linen and
bedding package required by Marriott and (y) the chairs for the Langhorne
Courtyard lounge, both of which have already been ordered by Seller but may not
be delivered until after Settlement. The re-proration obligations in this
Section 7(e)(iii) shall survive the Settlement.

(iv)   At Settlement, Seller shall receive a credit in an amount equal to: (i)
all amounts charged to the Guest Ledger for all room nights up to and including
the night during which the Cut-Off time occurs, and Buyer shall be entitled to
retain all deposits made and amounts collected for such Guest Ledger.

(v)    At Settlement, Seller shall receive a credit for all Accounts Receivable
(other than the Guest Ledger which is addressed in subparagraph iv above) in an
amount equal to the Accounts Receivable which are unpaid for not more than
ninety (90) days, and Buyer shall be entitled to all amounts collected for such
Accounts Receivable.

(vi)    No later than the day prior to Settlement, Seller and Buyer, through
their respective employees, agents or representatives, jointly shall make such
examinations, audits and inventories of the Hotel as may be necessary to make
the adjustment and prorations to the Purchase Price as set forth herein. Based
upon such examinations, audits and inventories, Seller and Buyer jointly shall
prepare prior to Settlement a settlement statement (“Settlement Statement”),
which shall set forth Seller’s and Buyer’s best estimate of the amounts of the
items to be adjusted and prorated under this Agreement. The Settlement Statement
shall be approved and executed by Seller and Buyer, and such adjustments and
prorations shall be final with respect to the items set forth in the Settlement
Statement, except to the extent any such items shall be reprorated after the
Settlement as expressly set forth in Section 7(e)(iii).

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(f)    Without limitation to other conditions set forth in this Agreement, and
notwithstanding anything contained herein to the contrary, Buyer's obligation to
close hereunder is expressly contingent upon the satisfaction, or the express
written waiver, of the following conditions:

(i)    As of the Settlement, title to the Real Property shall be as required by
Section 4 of this Agreement;

(ii)    All representations and warranties made by Seller in this Agreement
shall be true, complete and accurate as of the Settlement Date and Seller shall
have executed and delivered to the Buyer at Settlement a certificate to the
foregoing effect;

(iii)    Seller shall have performed, observed and complied with all agreements,
covenants and obligations to be performed by Seller under this Agreement,
including without limitation, the execution and/or delivery of all documents
required to be executed and/or delivered by or on behalf of Seller hereunder;

(iv)    Marriott shall have consented in writing to the sale of the Property to
Buyer as contemplated in this Agreement and shall have approved in writing the
granting of a new franchise license for each Hotel to Buyer or an affiliate of
Buyer (collectively, “Marriott Approval”). Buyer shall use diligent efforts to
obtain Marriott Approval, and Seller shall use diligent efforts in assisting
Buyer in obtaining Marriott Approval and shall fully cooperate with Buyer's
application and pursuit of the same. In the event that Buyer is unable to obtain
Marriott Approval on or before the Settlement Date, then either (i) the parties
hereto shall agree to extend the Settlement Date, or (ii) Buyer, at Buyer's sole
option, may elect to terminate this Agreement and immediately receive a full
refund of the Deposit with interest thereon;

(v)    From the date hereof to and including the Settlement Date, Seller shall
comply with and perform all of the duties and obligations of the licensee under
the franchise license for each Hotel and Seller shall not be in default under
any such franchise license; and

(vi)    On the Settlement Date, Seller shall terminate its existing management
agreement, if any, for each Hotel, and Seller shall be responsible for all fees
and costs associated with such terminations. On the Settlement Date, following
the termination of the existing management agreements, Seller, or one or more
affiliates of Seller, shall enter into the Management Agreement and Asset
Management Agreement (as each is defined in Section 12) for each Hotel.

(vii)   On or before the Settlement Date, Buyer and Seller shall have executed
the agreements referred to in Sections 6(f), 11(m) and 11(n).

If the conditions precedent in this Section 7(f) above are not satisfied as of
the Settlement Date, Buyer may exercise any of the remedies set forth in this
Agreement, as applicable, or waive such conditions in whole or in part and
proceed to Settlement. Notwithstanding the foregoing, if the condition set forth
in Section 7(f)(i) above is not satisfied, Buyer’s sole remedy shall be to
exercise the remedies set forth in Section 4 above, and if the condition set
forth in Section 7(f)(iv) above is not satisfied, Buyer’s sole remedy shall be
to exercise the remedies set forth in Section 7(f)(iv) above.

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(g)    Without limitation to other conditions set forth in this Agreement, and
notwithstanding anything contained herein to the contrary, Seller's obligation
to close hereunder is expressly contingent upon the satisfaction, or the express
written waiver, of the following conditions:

(i)    All representations and warranties made by Buyer in this Agreement shall
be true, complete and accurate in all material respects as of the Settlement
Date;

(ii)   Buyer shall have performed, observed and complied with all agreements,
covenants and obligations to be performed by Buyer under this Agreement,
including without limitation, the payment of the balance of the Purchase Price
and the execution and/or delivery of all documents required to be executed
and/or delivered by or on behalf of Buyer hereunder;

(iii)   Marriott shall have provided Marriott Approval; and

(iv)   On the Settlement Date, following the termination of the existing
management agreements by Seller, Buyer or one or more of its affiliates, shall
enter into the Management Agreement and Asset Management Agreement (as each is
defined in Section 12) for each Hotel.

(v)    On or before the Settlement Date, Buyer and Seller shall have executed
the agreements referred to in Sections 6(f), 11(m) and 11(n).

If the conditions precedent in this Section 7(g) above are not satisfied as of
the Settlement Date, Seller may exercise any of the remedies set forth in this
Agreement, as applicable, or waive such conditions in whole or in part and
proceed to Settlement. Notwithstanding the foregoing, the condition set forth in
Section 7(g)(iii) above is not satisfied, Buyer’s sole remedy shall be to
exercise the remedies set forth in Section 7(f)(iv) above.

(h)    Without limiting the generality of any provision of this Section 7,
Seller shall be liable for the payment of all sales, use and personal property
taxes owed by Seller as of the Settlement Date. Seller shall pay all sales, use
and personal property taxes for the last billing cycle ending before Settlement
on or before the due date for such billing cycle, and shall pay all sales, use
and personal property taxes for the billing cycle in which the Settlement Date
occurs on or before the due date for such billing cycle (provided that Seller’s
obligation for such taxes shall end as of the Cut-Off Time). Seller shall
indemnify, defend and hold Buyer Indemnified Parties harmless from any and all
liability, claims, fines, costs, liens or damages as a result of or in
connection with any taxes, whether or not settled, assessed or determined as of
the Settlement Date, owed by Seller for the period prior to and including the
Cut-Off Time, including, without limitation, those taxes owed by Seller under
the New Jersey Sales and Use Tax Act and the Business Personal Property Tax Act.
The provisions of this Section 7(h) shall survive Settlement.

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8.    Settlement Documents.

(a)    At the time and place of Settlement, Seller shall deliver or cause to be
delivered to Buyer the following:

(i)            the Deeds;

(ii)   a bill of sale whereby Seller shall convey to Buyer its interest in the
Personal Property (the “Bill of Sale”);

(iii)          an assignment whereby Seller will assign and Buyer shall assume
all of Seller's right, title, and interest, including all the obligations of
Seller, in, to and under the Van Lease and any warranties, Licenses, Permits and
Approvals -(hereinafter referred to as the "Assign-ment");

(iv)   an affidavit pursuant to the Foreign Investment in Real Property Act
stating that Seller is not a foreign person;

(v)    a Seller's title affidavit and such other documents as may be reasonably
requested by the Title Company or Buyer’s attorney relating to the conveyance of
the Property;

(vi)   all Licenses, including without limitation a final certificate of
occupancy for the Hotels, and as many signed originals (or true and correct
copies of same) of the other items covered by the Assignment as are in Seller's
possession (all of which shall be left in the respective Real Property if
currently located there);

(vii)         all equipment operating manuals and all equipment warranties and
equipment guarantees, if any, in Seller's possession (all of which shall be left
in the respective Real Property if currently located there);

(viii)        all master and duplicate keys to all locks for the Real Property
which are in Seller's possession (all of which shall be left in the respective
Real Property if currently located there);

(ix)    the Management Agreement and Asset Management Agreement; 

(x)    The certificate required under Section 7(f)(ii);

(xi)    A set of all guest registration cards, guest transcripts, guest
histories, and all other available guest information;
 
(xii)    A list of advance room reservations, functions and the like, in
reasonable detail so as to enable Buyer to honor the Seller’s advance room
reservations;

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(xiii)         To the extent not previously delivered to Buyer during the Due
Diligence Period, all books, records, operating reports, appraisal reports,
files, real estate and personal property tax bills, and other materials relating
to the Hotels in the Seller’s possession or control;

(xiv)         such other documents as may be reasonably requested by Buyer to
carry out the intent of this Agreement or by the Title Company.

(b)    At the time and place of Settlement, Buyer shall deliver or cause to be
delivered to Seller the following:

(i)     the balance of the Purchase Price;

(ii)            a counterpart of the Assignment;

(iii)           the Management Agreement and Asset Management Agreement; and

(iv)           such other documents as may be reasonably requested by Seller to
carry out the intent of this Agreement or by the Title Company.

9.    Risk of Loss.  All risk of loss shall be on Seller prior to Settlement.
Except as set forth in the next sentence, in the event that there is a casualty
or condemnation of all or any portion of the Property, Buyer may, at its sole
discretion, either (i) continue to Settlement without an abatement in Purchase
Price, in which event Seller shall and/or shall cause Manager to assign all
insurance proceeds and rights to insurance proceeds for such casualty or all
condemnation awards for such condemnation, as applicable, to Buyer or (ii)
terminate this Agreement, in which event the Deposit, plus all accrued interest,
shall be promptly delivered to Buyer and this Agreement shall be null and void
and of no force or effect and all copies shall be canceled. Notwithstanding the
foregoing, in the event that the Property is damaged by fire or other casualty
and the estimated cost to repair such damage is less than $500,000.00 and such
damage is fully insured, Buyer shall not have the right to terminate the
Agreement provided that Seller shall either (i) continue to Settlement without
an abatement in Purchase Price, and Seller shall assign and/or cause Manager to
assign all insurance proceeds and rights to insurance proceeds for such casualty
to Buyer, or (ii) repair such damaged portion of the Property to the condition
that existed prior to such damage, in which case Settlement shall be extended
for such reasonable period of time, not to exceed sixty (60) days, if such
repair or restoration cannot be reasonably completed prior to Settlement; and in
the event Seller has not fully completed restoration of the damaged Property
within such 60-day period, Buyer shall have the right to terminate this
Agreement and receive a full refund of the Deposit and interest thereon.
Notwithstanding anything herein to the contrary, in the event a casualty or
condemnation is uninsured or underinsured, Buyer shall have the right to
terminate this Agreement and receive a full refund of the Deposit and interest
thereon.

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10.    Confidentiality
 
(a)    Seller and Buyer shall keep confidential and not make any public
announcement or disclose any terms of this Agreement, any information disclosed
by Buyer’s due diligence inspections or in any due diligence materials delivered
to Buyer, and any other documents, materials, data or other information with
respect to the Hotel which is not generally known to the public (the
“Confidential Information”); provided, however, that Seller and Buyer shall be
permitted to (i) disclose any Confidential Information to the extent required by
court order or under applicable law, (ii) make a public announcement regarding
the transaction contemplated in this Agreement, provided that Seller and Buyer
shall approve the form and substance of any such public announcement, which
approval shall not be unreasonably withheld, conditioned or delayed, or (iii)
disclose any Confidential Information to any person on a “need-to-know” basis,
such as their respective directors, officers, partners, members, employees,
attorneys, accountants, consultants, engineers, surveyors, lenders, investors,
managers, franchisors and such other persons whose assistance is required to
consummate the transactions contemplated in this Agreement; provided, however,
that Seller or Buyer (as the case may be) shall (a) advise such person of the
confidential nature of such Confidential Information, and (b) use commercially
reasonable efforts to cause such person to maintain the confidentiality of such
information. This Section 10(a) shall survive the termination of this Agreement
and Settlement. Notwithstanding anything in this Section 10(a) to the contrary,
Buyer shall have the right to refer to this Agreement and the transactions
contemplated hereby in any filing pursuant to any state or federal securities
law or regulation and in the filing of a Form 8-K.

(b)    Buyer shall not, through its employees, agents, representatives or any
other person, directly or indirectly, initiate or pursue any communication with
any Employees or any person representing any Employees involving any matter
whatsoever, including with respect to the Hotel, the Real Property, the
Employees or this Agreement, without Seller’s prior written consent, which
consent may be withheld in Seller’s sole reasonable discretion, unless such
communication is arranged by Seller. Without limiting the generality of the
foregoing, the foregoing prohibition shall be applicable to Buyer and its
agents, employees and representatives while conducting all due diligence
investigations and if addressed by an Employee during the course of due
diligence investigations, Buyer and its agents, employees and representatives
shall not disclose the nature of their activities. All communications with
Seller regarding the Hotels, the Real Property or any other matter covered by
this Agreement shall be addressed to Seller either in writing as set forth in
Section 15 below or by cell phone or email at the phone number or email address
set forth on Schedule 10(b) attached hereto. Notwithstanding the foregoing,
Buyer shall have the right to interview the Senior Personnel (defined below)
during the Due Diligence Period and thereafter; provided, however, that Buyer
shall give Seller at least 2 business days prior notice to Seller, and Charlene
Schwartz shall have the right to be present for any such interview or shall have
consented in writing to such interview without her presence.

Seller shall cooperate with Buyer in good faith to permit Buyer to expeditiously
conduct due diligence on the Property in accordance with this Agreement.
Notwithstanding anything in this Agreement to the contrary, upon at least two
(2) business days notice to Seller, Buyer and its representatives may, during
the Due Diligence Period and thereafter, during normal business hours,
communicate with the general manager of the Hotels and the senior marketing
managers for the Hotels (collectively, the “Senior Personnel”) with Charlene
Schwartz present for such communication. Subject to Buyer’s compliance with its
obligations under this Section 10, Seller shall direct the Senior Personnel to
cooperate with Buyer and its representatives in conducting its due diligence.

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11.    Operations Pending Settlement.

(a)    Seller shall not sell, mortgage or voluntarily encumber the Real
Property.

(b)    Seller will promptly furnish Buyer with copies of all notices received by
Seller relating to the Real Property.

(c)    Seller agrees that until the Settlement Date, Seller will not, without
the prior written approval of Buyer, enter into any lease for space in nor grant
any other right of possession, use or occupancy of all or any portion of the
Real Property for a term extending beyond the date of Settlement.

(d)    Seller shall, at its expense, maintain the Property in its present order
and condition, make all necessary repairs and deliver the Property on the
Settlement Date in the same condition it is in on the date hereof, reasonable
wear and tear excepted.

(e)    Seller shall notify Buyer in writing, promptly after Seller acquires
knowledge thereof, of any facts or events that would cause any of Seller’s
representations and warranties to be untrue or incorrect in any material
respect.

(f)    Seller shall maintain in full force and effect all applicable Licenses,
Permits and Approvals and timely apply for renewals of all such Licenses,
Permits and Approvals which will expire before the Settlement Date.

(g)    From the date of this Agreement until the Settlement or termination of
this Agreement, Seller and Buyer shall use commercially reasonable efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable to consummate the transaction contemplated
in this Agreement, including, without limitation, (i) obtaining all necessary
consents, approvals and authorizations required to be obtained from any
governmental authority or other person under this Agreement or applicable law,
and (ii) effecting all registrations and filings required under this Agreement
or applicable law. After the Settlement, Seller and Buyer shall use commercially
reasonable efforts (at no cost or expense to such party, other than any de
minimus cost or expense or any cost or expense which the requesting party agrees
in writing to reimburse) to further effect the transaction contemplated in this
Agreement. This Section 11(g) shall survive the Settlement.

(h)    On or prior to the Settlement Date, Seller shall pay directly to its
Employees all Compensation due such Employees through the date immediately prior
to the Settlement Date, and Buyer shall not receive a credit for any
Compensation. In addition, on or prior to the Settlement Date, Seller shall pay
the 2005 year-end bonuses that are due to the managers of each of the three (3)
Hotels and to Patrick Brogan.

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(i)    Seller shall pay directly to the Employees all Accrued Vacation Pay due
to such Employees through the date immediately prior to the Settlement Date on
Seller’s first payroll date on or after the Settlement Date, and Buyer shall not
receive a credit for any Accrued Vacation Pay.

(j)    Buyer shall be responsible for obtaining any consents from (i) Marriott
in connection with Marriott Approval, (ii) any licensor, vendor or supplier of
any computer hardware or software which will remain at the Hotel and (iii) the
lessor under the Van Lease, provided that promptly after the execution of this
Agreement Seller contacts Marriott and informs Marriott of the transaction
contemplated herein and authorizes Marriott to communicate with Buyer, and
Seller uses reasonable efforts to cooperate with Buyer in obtaining Marriott
Approval and any and all of the aforementioned consents. Buyer shall pay any
fees or expenses charged by any of the foregoing parties in respect of such
assignments or transfer of new licenses (as the case may be). 

(k)    If and to the extent required by applicable law, Seller shall apply for a
tax clearance certificate from the New Jersey Department of Treasury concerning
the sale and transfer of the Property, but the receipt of such certificate shall
not be a condition to Settlement.

(l)             If and to the extent required by applicable law, Seller shall
apply for a bulk sales clearance certificate from the Pennsylvania Department of
Revenue concerning the sale and transfer of the Property, but the receipt of
such certificate shall not be a condition to Settlement.

(m)           During the Due Diligence Period, Buyer and Seller shall use their
diligent good faith efforts to negotiate an agreement of sale for the Langhorne
Residence Inn currently being developed by Seller at 15 Cabot Boulevard,
Langhorne, Pennsylvania.

(n)   During the Due Diligence Period, Buyer and Seller shall use their diligent
good faith efforts to negotiate an agreement relating to joint future
development of hotel deals by Buyer and Seller within a ten (10) mile radius of
each of the Bethlehem Fairfield Property, the New Jersey Property and the
Langhorne Residence Property.

12.           Operations/Obligations After Settlement

(a)    At Settlement, Buyer or one of its affiliates, and Seller or Solow, Inc.
or one or more other affiliates of Seller as determined by Seller, shall enter
into a management agreement pursuant to which Seller or Seller’s affiliate shall
manage the Hotels on behalf of Buyer for a period of one (1) year from the
Settlement Date (the “Management Agreement”). The Management Agreement shall
provide that Seller or its affiliate will be paid a management fee equal to
three and one half percent (3.5%) of all gross revenues derived from the
operations of the Hotels, such fee to be paid in arrears on a monthly basis
within fifteen (15) days following the end of each calendar month. Buyer and
Seller shall use their best efforts to agree on the form and substance of the
Management Agreement during the Due Diligence Period. Notwithstanding the one
(1) year term of the Management Agreement, Seller or its affiliate executing the
Management Agreement shall have the right to terminate the Management Agreement
and turn over management responsibilities to Buyer at any time upon at least
thirty (30) days advance written notice, provided that the actual early
termination of the Management Agreement shall not be effective until Buyer has
received consent for such termination from Marriott and Buyer’s mortgagee,
provided further that Buyer shall promptly request such consent and diligently
use its best efforts to obtain such consent within the thirty (30) day period
and Buyer shall request that its mortgagee include a provision in its loan
documents permitting the early termination of the Management Agreement so long
as an affiliate of Buyer is hired to perform the management of the Hotels. At
Settlement, Buyer or one of its affiliates and Hersha Hospitality Management, LP
(“Asset Manager”) shall enter into an asset management agreement (the “Asset
Management Agreement”), pursuant to which Asset Manager will provide accounting
and support services for the Hotels for a period of one (1) year from the
Settlement Date, and for such services Asset Manager shall earn an asset
management fee of 1% of all gross revenues derived from the operations of the
Hotels.

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(b)    Seller shall cause its affiliate executing the Management Agreement to
continue employing the Employees at their then-current job descriptions and
then-current rate of Compensation during the term of the Management Agreement,
as such rate of Compensation is scheduled to be increased in 2006 as set forth
on Schedule 5(a)(x). Seller or Employer shall not increase the salaries of the
salaried Employees beyond the 2006 levels without first obtaining Buyer’s prior
written consent, but Seller shall have the right to increase the wages of the
hourly Employees in accordance with Seller’s historic compensation practices.
Upon the expiration or sooner termination of the Management Agreement, Seller
shall terminate (or shall cause Employer to) terminate the employment of all
Employees effective as of the termination date of the Management Agreement
(other than Mary Seiferman, who shall continue to be employed by Solow, Inc.),
and Buyer shall offer employment to all of such Employees for such Employee’s
current job description and at such Employee’s rate of Compensation and level of
seniority enjoyed by such Employees prior to Settlement. In addition, upon the
expiration or sooner termination of the Management Agreement, Buyer shall offer
employment to Patrick Brogan for his then-current job description and at his
then-current rate of Compensation (i.e., the Compensation for 2006 as set forth
on Schedule 5(a)(x)), which shall not be materially increased by Seller during
the term of the Management Agreement without Buyer’s prior written consent. The
terminated Employees who accept such offers of employment are referred to
collectively herein as the “Rehired Employees”. Buyer shall indemnify and hold
harmless the Seller and the Employers under the WARN Act with respect to the
Employees as a result of the failure of Buyer to employ a sufficient number of
the individuals previously employed by Seller and offer such terms of employment
as required to comply with the provisions of the WARN Act; provided that Seller
has complied with its obligations to notify Buyer of the termination of any
Employees as set forth in this Section. Seller and Buyer shall agree on the
form, substance and manner of delivery of any announcement or communication to
the Employees regarding their employment or termination of employment at the
Hotel.

(c)    Buyer shall honor all Bookings made prior to the Settlement Date for any
period on or after the Settlement Date.

(d)    Seller and Buyer shall use commercially reasonable efforts to cooperate
with each other (at no cost or expense to the party whose cooperation is
requested, other than any de minimis cost or expense or any cost or expense
which the requesting party agreed in writing to reimburse) to provide written
notice to any person under any Contracts, Licenses, Permits and Approvals, and
to effect any registrations or filings with any governmental authority or other
person, regarding the change in ownership or operating of the Hotel.

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(e)    After the Settlement, Buyer shall provide reasonable access to Seller and
its officers, employees, agents and representatives to (i) the Books and Records
pertaining only to the operations of the Hotel for any purpose deemed reasonably
necessary or advisable by Seller, including, without limitation, to facilitate
the preparation of any documents required to be filed by Seller under applicable
law or the resolution of any audit, litigation or other proceeding, claim or
charge made by any person or insurance claim involving Seller or any of its
affiliates (the foregoing shall apply only to the Books and Records delivered by
Seller to Buyer under this Agreement and any books and records applicable to the
period covered by the Management Agreement and not to any books, records,
reports or other information of Buyer or regarding the Hotel regardless of the
source of such information); and (ii) the employees of Buyer whose assistance or
testimony is deemed necessary or advisable by Seller to assist Seller in
evaluating or defending any audit, litigation or other proceeding, claim or
charge made by any Person or insurance claim involving any Seller or any of its
affiliates; provided, however, that (A) Seller shall provide a written request
to Buyer for such access, which shall be scheduled at the convenience of Buyer,
and not less than two (2) business days after delivery of such request; (B)
Buyer shall not be required to provide such access during non-business hours;
(C) Buyer shall have the right to accompany the officer, employees, agents or
representatives of Seller or its affiliate in providing access to its books and
records, the Property or the employees of Buyer (or Buyer’s manager) as provided
in this Section; and (D) Buyer shall incur no cost or expense, other than any de
minimis cost or expense, or any cost or expense which Seller shall promptly
reimburse Buyer for, in connection with providing access to information pursuant
to this Section. Buyer, at its cost and expense, shall retain all Books and
Records with respect to the Hotel for period of three (3) years after the
Settlement. The provisions of this Section 12(e) shall survive Settlement for a
period of three (3) years.

(f)    Seller and Buyer agree that, in the event Seller or its affiliates
intends to complete closing under the existing agreement of sale with Civic
Center Corporation regarding a portion of Bucks County Parcel No. 22-57-12 (the
“Lot”), Seller shall give Buyer written notice thereof at least forty-five (45)
days prior to the scheduled closing date, and Buyer shall have the right to
acquire a non-controlling interest in the entity that will take title to Lot
(the “Lot Entity”). Seller shall have the sole right to determine the form of
entity used to acquire the Lot. Buyer shall exercise this right by giving Seller
written notice of its acceptance no later than fifteen (15) days following the
date on which Buyer received Seller’s notice. Seller and Buyer agree to
negotiate and agree to the specific terms of the organizational documents
governing the Lot Entity during the period between Buyer’s acceptance of
Seller’s offer and the closing under the agreement of sale for the Lot. The
provisions of this Section 12(f) shall survive Settlement for as long as the
agreement of sale for the Lot remains in full force and effect.

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(g)    Earn-Out: The Seller shall value the Bethlehem Fairfield, Langhorne
Courtyard and Mt. Laurel Fairfield (the “Stabilized Properties”) on June 30,
2007. The value of the Stabilized Properties shall be computed by applying a 9%
capitalization rate to the audited (by Buyer’s auditors) trailing 12 months’
(July 1, 2006 to June 30, 2007) NOI for the Stabilized Properties. If the then
current value of the Stabilized Properties exceeds $40,500,000.00, the Buyer
will pay Seller on or before September 30, 2007, lawful money of the United
States equal to the difference between the then current value of the Stabilized
Properties and $40,500,000.00, but in no event shall such earn-out payments
exceed $3,000,000.00 in aggregate for the Stabilized Properties. In the event
that prior to June 30, 2007, one or more of the Stabilized Properties is sold,
condemned, conveyed in lieu of condemnation or substantially destroyed by fire
or other casualty and is not reconstructed prior to June 30, 2007, the “value”
of such property for purposes of this Section 12(g) shall be computed by
applying a 9% capitalization rate to the trailing 12 months’ (i.e., the last 12
full calendar months preceding the closing date of such sale or transfer by
condemnation or deed in lieu thereof or the date of such casualty) NOI for the
applicable property (which NOI shall be based on Buyer’s audited financial
statements for any period following the Settlement Date and based on Seller’s
unaudited financial statements for any period prior to the Settlement Date), but
the earn-out payment for such property for purposes of this sentence only shall
not exceed $1,550,000.00 for the Langhorne Courtyard, $800,000 for the Mt.
Laurel Fairfield and $650,000.00 for the Bethlehem Fairfield, and the “value” of
the other property or properties shall be determined in accordance with the
formula set forth in the second sentence of this Section 12(g). Seller shall
have the right to audit Buyer’s Books and Records relating to the Stabilized
Properties in order to verify the amount of the earn-out payment. The provisions
of this Section 12(g) shall survive Settlement and the Termination Date. In the
event that Buyer fails to pay the foregoing earn-out when due, Seller shall have
the right to bring appropriate legal or equitable proceedings to enforce this
provision.

(h)    Seller shall cooperate with Buyer and Asset Manager to have the liquor
licenses for the Hotels, if any, transferred to their name; provided, however,
that (i) final Pennsylvania Liquor Control Board (“PLCB”) approval of the
transfer of the liquor license to Buyer and/or Asset Manager shall not be a
condition to Settlement, and (ii) if PLCB approval has not been granted prior to
the Settlement Date (A) Settlement will be held without transfer of the liquor
license or any withholding of any portion of the Purchase Price, (B) the parties
will continue to pursue PLCB approval after Settlement, (C) the liquor license
shall continue to be titled in the name of Seller’s Manager until PLCB approval
has been issued, and (D) no alcohol shall be sold at the applicable Hotel until
the license transfer has been approved by the PLCB but Manager may give alcohol
away if permitted by applicable law. If required by the PLCB, the parties shall
execute a separate agreement of sale for the liquor license.

(i)    The provisions of this Section 12 shall survive Settlement for the longer
of (i) the period specifically provided in the applicable subsection of this
Section 12 or (ii) the period set forth in Section 21.

13.           Indemnification.

(a)    Seller shall indemnify and hold harmless the Buyer Indemnified Parties
and their officers, directors, shareholders, trustees, agents, employees,
successors and assigns from and against any and all losses, claims, costs,
penalties, damages, liabilities and expenses incurred by any of the Buyer
Indemnified Parties after the Settlement to the extent resulting from (i)
subject to Section 21, the breach by Seller of any of its covenants,
obligations, representations and/or warranties under this Agreement which
expressly survive the Settlement, or (ii) any taxes owed by Seller to any taxing
authority for periods prior to the Cut-off Time, or (iii) the operations of the
Hotels by Seller and/or Manager prior to the Settlement Date, except to the
extent that any of the foregoing are caused by any of the Buyer Indemnified
Parties.

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(b)    Buyer shall indemnify and hold harmless Seller and its Manager and their
respective officers, directors, shareholders, trustees, agents, employees,
successors and assigns (“Seller Indemnified Parties”) from and against any and
all losses, claims, costs, penalties, damages, liabilities and expenses incurred
by the Seller Indemnified Parties after the Settlement to the extent resulting
from (i) subject to Section 21, the breach by Buyer of any of its covenants,
obligations, representations and/or warranties under this Agreement which
expressly survive the Settlement, or (ii) the operation of the Hotels by Buyer
after the Settlement Date, except to the extent that any of the foregoing are
caused by the Seller Indemnified Parties.

(c)    The provisions of this Section 13(a)(i) and 13(b)(i) shall survive
Settlement until the Termination Date, subject to the provisions of Section 21.
Notwithstanding anything to the contrary contained in this Agreement, the
remaining provisions of Section 13(a) and 13(b) shall survive both the
Settlement Date and the Termination Date.

14.          Default.

(a)    If Buyer’s representations and warranties contained herein are false or
misleading in any material respect or if Buyer defaults in performing any of its
material obligations hereunder and Buyer does not cure such default within five
(5) days of receipt of notice from Seller of such default, then Seller shall
have the right, as its sole and exclusive remedy, to terminate this Agreement
and to be paid the Deposit and all interest earned thereon as liquidated damages
for such breach. Notwithstanding the foregoing, if Seller elects to terminate
this Agreement as a result of Buyer’s material default and Buyer refuses to give
the Title Company authorization to release the Deposit to Seller and a court of
competent jurisdiction determines that Seller properly terminated the Agreement
of Sale, Seller shall be entitled to collect from Buyer, in addition to the
Deposit, Seller’s actual damages suffered or incurred directly as a result of
Buyer’s refusal to authorize the release of the Deposit, including, without
limitation, legal costs as set forth in Section 14(c) below.

(b)    If Seller’s representations and warranties contained herein are false or
misleading in any material respect or if Seller shall fail or refuse to complete
Settlement for reasons other than Buyer's default or a failure of a condition
precedent to Settlement or if Seller defaults in performing any of its material
obligations hereunder and Seller does not cure such default within five (5) days
of receipt of notice from Buyer of such default, Buyer shall have the right, as
its sole and exclusive remedy, to either seek specific performance of this
Agreement or to terminate this Agreement and recover the Deposit and interest
earned thereon.

(c)    In any litigation brought by the parties to enforce their respective
remedies under Sections 14(a) or 14(b) above, the prevailing party in such
litigation shall be entitled to recover its reasonable legal fees from the
non-prevailing party as part of the relief granted in such action.

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(d)    Tender at the time of Settlement of an executed Deed by Seller and the
balance of the Purchase Price by Buyer are hereby mutually waived, but nothing
herein contained shall be construed as to relieve Seller from the obligation to
deliver the Deeds or to relieve Buyer from the concurrent obligation to pay the
balance of the Purchase Price.

15.          Notices. In addition to the provisions of Section 10(b) above, all
notices to be given to Seller and/or to Buyer shall be mailed by registered or
certified mail, return receipt requested or an overnight service with receipt,
to the addresses set forth in the preamble to this Agreement. All notices to
Seller shall be copied to Seller’s counsel, John D. Benson, Esquire, Sirlin
Gallogly & Lesser, P.C., 1529 Walnut Street, Suite 600, Philadelphia,
Pennsylvania 19102; Telephone: 215-864-9700; Facsimile: 215-864-9669 and to
Buyer’s counsel, Lok Mohapatra, Esquire, Shah & Byler, LLP, Penn Mutual Towers,
510 Walnut Street, 9th Floor, Philadelphia, PA 19106; Telephone: 215-238-1045;
Facsimile: 267-238-1874. Any notice required hereunder may be given on behalf of
a party by that party’s legal counsel. Any notice shall be deemed received when
actually received or refused by the party to whom such notice was directed.

16.           Status of Escrow Holder. It is expressly understood, covenanted
and agreed that:

(a)    The duties of Escrow Holder are only as herein specifically provided, and
are purely ministerial in nature, and Escrow Holder shall incur no liability
whatever except for willful misconduct or gross negligence, as long as Escrow
Holder has acted in good faith.

(b)    Seller and Buyer each hereby release and indemnify Escrow Holder from and
against any act done or omitted to be done by Escrow Holder in good faith in the
performance of its duties hereunder, except to the extent such act constitutes
willful misconduct or gross negligence.

(c)    Escrow Holder is acting as a stakeholder only with respect to the
Deposit. If there is any dispute as to whether Escrow Holder is obligated to
deliver the Deposit or as to whom the Deposit is to be delivered, Escrow Holder
shall not be required to make any delivery, but in such event Escrow Holder may
hold the same until receipt by Escrow Holder of an authorization in writing,
signed by all of the parties having any interest in such dispute, directing the
disposition of the Deposit and any interest accrued thereon or until the final
determination of the rights of the parties in an appropriate proceeding. If such
written authorization is not given, or proceedings for such determination are
not begun within thirty (30) days after Settlement was to have occurred, Escrow
Holder may, but is not required to, bring an appropriate action or proceeding
for leave to deposit the Deposit in court pending such determination. Escrow
Holder shall be reimbursed for all costs and expenses of such action or
proceeding by Seller and Buyer including, without limitation, reasonable
attorneys' fees and disbursements. Upon making delivery of the Deposit in the
manner provided in this Agreement, Escrow Holder shall have no further liability
hereunder or to Buyer or Seller.

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17.    Broker. Buyer and Seller each represent to the other that they have not
dealt with any broker, agent or other finder in connection with the sale of the
Property and agree to indemnify the other against any claim for a commission
brought by any other broker, agent or other finder claiming to have worked for
the respective party.

18.    Entire Agreement. This Agreement sets forth all the agreements, promises,
warranties, representations, understandings and promises between the parties
hereto, and the parties are not bound by any agreements, undertakings or
conditions except as expressly set forth herein. All additions, variations or
modifications to this Agreement shall be void and ineffective unless in writing
and signed by the parties.

19.    Assignment; Successors and Assigns. Buyer shall have the right to assign
its right to take title to the Property to an entity in which Buyer is the
direct or indirect owner of a majority of the ownership interests. In the event
of any permitted assignment, Buyer and the assignee shall remain jointly and
severally liable for the performance of all of Buyer’s obligations under this
Agreement. This Agreement shall extend to, be binding upon, and inure to the
benefit of the heirs, executors, administrators and successors of the parties
hereto.

20.    Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the Commonwealth of Pennsylvania.

21.    Merger.  The representations and warranties set forth in this Agreement
shall survive Settlement until the one hundred eightieth (180th) day following
the expiration or sooner termination of the Management Agreement (the
“Termination Date”). All of the covenants and agreements of the Seller and the
Buyer made in, or pursuant to, this Agreement that expressly survive Settlement
shall survive until the Termination Date, except as otherwise expressly provided
in this Agreement. On the Termination Date, all representations, warranties,
covenants and agreements that are to terminate on that date shall terminate
unless either party shall have given the other party written notice that such
party has a claim for a breach of a specific representation, warranty, covenant
or agreement specified in such notice (the “Specified Claim”), in which case the
party claiming such Specified Claim shall have one (1) year to bring suit
against the other party on account of such Specified Claim. Except for the
representations, warranties, covenants and agreements that survive Settlement
pursuant to this Section 21, all other representations, warranties, covenants
and agreements shall merge into the Deeds or any other document or instrument
executed and delivered in connection herewith. 

22.    No Recording. This Agreement shall not be recorded in any governmental
recording office without the express written consent of Seller.

23.    Tax Deferred Exchange. Buyer understands that Seller may desire to
exchange the Real Property for other property of like kind and qualifying use
within the meaning of Section 1031 of the Internal Revenue Code. Towards that
end, Buyer hereby grants Seller the right to assign its rights, but not its
obligations, under this Agreement to a qualified intermediary as provided in
Treasury Regulation Section 1.1031(k)-1(g)(4) at any time prior to Settlement.
Buyer agrees to cooperate with Seller to facilitate the like kind exchange as
long as Buyer shall not incur any additional liabilities, costs, or expenses as
a result of such cooperation and, in addition, Buyer shall not be required to
adversely change any of the terms and conditions of this Agreement, nor to take
title to, nor enter into an acquisition agreement for any other property.

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

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

26.    Seller. Buyer acknowledges that the Property is not owned jointly by each
of the parties comprising Seller, but that certain portions of the Property are
owned by Charlene Schwartz, other portions by Langhorne Courtyard, Inc., other
portions by Mt. Laurel FFI, Inc. and other portions by Bethlehem FFI, Inc. Any
representation, warranty or covenant made by “Seller” with respect to the
“Property” or the “Real Property” shall be deemed to have been made, and shall
be required to be performed only, by the party owning such Property or Real
Property with respect to the individual portions of the Property that each
person or entity owns itself and not with respect to the individual portions of
the Property that the other person or entities owns. For example, and without
limiting the generality of the foregoing, Charlene Schwartz shall not be liable
for any breach of a representation, warranty or covenant made by Langhorne
Courtyard, Inc. with respect to the portion of the Property owned individually
by Langhorne Courtyard, Inc.

27.    Schedules. Buyer and Seller shall use their best efforts to agree on the
Schedules to be attached to this Agreement no later than October 28, 2005. If
the parties have not agreed to the Schedules by 5:00 p.m. on October 28, 2005,
either party may terminate this Agreement at any time until the parties have
agreed on the Schedules.

[Signature Page Follows]
 
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IN WITNESS WHEREOF, the parties hereto have caused these presents to be duly
executed and their corporate seal to be duly attached by their proper officials
thereunto duly authorized, the day and year first above written.

             
SELLER: 
                              
Witness
 
CHARLENE SCHWARTZ 
               
LANGHORNE COURTYARD, INC. 
                         
By:
   
Witness
 
 CHARLENE SCHWARTZ, President
               
MT. LAUREL FFI, INC. 
                         
By:
   
Witness
 
 CHARLENE SCHWARTZ, President
               
BETHLEHEM FFI, INC. 
                         
By:
   
Witness
 
 CHARLENE SCHWARTZ, President
                                   
BUYER: 
               
HERSHA HOSPITALITY TRUST 
                         
By:
   
Witness
   
Name:
       
Title:
 

 
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The undersigned is joining in this Agreement for the sole purpose of agreeing to
be bound by the provisions of this Agreement insofar as such provisions relate
to the duties of Escrow Holder and the holding and distribution of the Deposit.

 
[TITLE COMPANY] 
                           
By:
   

 
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