Exhibit 10.1


    Exhibit
      10.1

     

    
      

      

    

    
      CONTRIBUTION
        AGREEMENT

       

      dated
        as
        of January 19, 2006

       

      by
        and
        among

      


      SHANTI
        III ASSOCIATES

      


      KUNJ
        ASSOCIATES

      


      DEVI
        ASSOCIATES

      


      SHREE
        ASSOCIATES

      


      DAVID
        L. DESFOR 

      


      ASHISH
        R. PARIKH

      


      SAL
        SHAHRIAR

      


      THE
        HASU AND HERSHA SHAH 2004 TRUST FBO NEIL H. SHAH

      


      and

      


      THE
        HASU AND HERSHA SHAH 2004 TRUST FBO JAY H. SHAH

      


      


      as
        Contributor,

      


      METRO
        JFK ASSOCIATES, LLC

      


      and

      HERSHA
        HOSPITALITY LIMITED PARTNERSHIP

      


      as
        Acquiror

      


      


      IN
        CONNECTION WITH THE PURCHASE AND SALE OF MEMBERSHIP
        INTERESTS IN METRO JFK ASSOCIATES, LLC, OWNER OF THE HILTON GARDEN INN JFK,
        JAMAICA, NEW YORK

       

      
        

        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      CONTRIBUTION
        AGREEMENT

      


      THIS
        CONTRIBUTION AGREEMENT, dated as of January 19, 2006 (the “Agreement”), by and
        among Shanti III Associates, a Pennsylvania limited partnership (“Shanti”), Kunj
        Associates, a Pennsylvania limited partnership (“Kunj”), Devi Associates, a
        Pennsylvania limited partnership (“Devi”), Shree Associates, a Pennsylvania
        limited partnership (“Shree”), David L. Desfor (“Desfor”), Ashish R. Parikh
        (“Parikh”), Sal Shahriar (“Shahriar”), The Hasu and Hersha Shah 2004 Trust FBO
        Neil H. Shah (“FBO Neil”), and The Hasu and Hersha Shah 2004 Trust FBO Jay H.
        Shah (“FBO Jay”) (each and collectively, the “Contributor”), Metro JFK
        Associates LLC, a New York limited liability company (the “LLC”), and Hersha
        Hospitality Limited Partnership, a Virginia limited partnership (the
“Acquiror”), provides:

       

      ARTICLE
        I

      


      DEFINITIONS;
        RULES OF CONSTRUCTION

      


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

       

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

       

      “Articles
        of Organization”
shall
        mean the Articles of Organization of the LLC filed with the Secretary of
        State
        of the State of New York, a true and correct copy of which is attached hereto
        as
Exhibit F.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      “Assignment
        and Assumption Agreement”
shall
        mean, collectively, the Shanti Assignment, Kunj Assignment, Devi Assignment,
        Shree Assignment, Desfor Assignment, Parikh Assignment, Shahriar Assignment,
        FBO
        Neil Assignment and FBO Jay Assignment.

      


      “Desfor
        Assignment”
shall
        mean that certain Assignment and Assumption Agreement with respect to the
        Desfor
        Interests, dated as of the Closing Date, by and between Desfor and
        Acquiror.

      


      “Devi
        Assignment”
shall
        mean that certain Assignment and Assumption Agreement with respect to the
        Devi
        Interests, dated as of the Closing Date, by and between Devi and
        Acquiror.

      


      “FBO
        Neil Assignment”
shall
        mean that certain Assignment and Assumption Agreement with respect to the
        FBO
        Neil Interests, dated as of the Closing Date, by and between FBO Neil and
        Acquiror.

      


      “FBO
        Jay Assignment”
shall
        mean that certain Assignment and Assumption Agreement with respect to the
        FBO
        Jay Interests, dated as of the Closing Date, by and between FBO Jay and
        Acquiror.

      


      “Kunj
        Assignment”
shall
        mean that certain Assignment and Assumption Agreement with respect to the
        Kunj
        Interests, dated as of the Closing Date, by and between Kunj and
        Acquiror.

      


      “Parikh
        Assignment”
shall
        mean that certain Assignment and Assumption Agreement with respect to the
        Parikh
        Interests, dated as of the Closing Date, by and between Parikh and
        Acquiror.

      


      “Shahriar
        Assignment”
shall
        mean that certain Assignment and Assumption Agreement with respect to the
        Shahriar Interests, dated as of the Closing Date, by and between Shahriar
        and
        Acquiror.

      


      “Shanti
        Assignment”
shall
        mean that certain Assignment and Assumption Agreement with respect to the
        Shanti
        Interests, dated as of the Closing Date, by and between Shanti and
        Acquiror.

      


      “Shree
        Assignment”
shall
        mean that certain Assignment and Assumption Agreement with respect to the
        Shree
        Interests, dated as of the Closing Date, by and between Shree and
        Acquiror.

       

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

       

      “Closing”
shall
        mean the Closing of the contribution and acquisition of the Interests pursuant
        to this Agreement.


      
        
          
          

        

        
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      “Closing
        Balance”
shall
        have the meaning set forth in Section
        2.3(c).

      


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

       

      “Consideration”
shall
        mean $29,000,000.00 payable to the Contributor at Closing in the manner
        described in Section
        2.3.

       

      “Continuing
        Liabilities”
shall
        include liabilities arising under Operating Agreements, Leases, equipment
        leases, loan agreements, or proration credits at Closing, but shall exclude
        any
        liabilities arising from any other arrangement, agreement or pending
        litigation.

      


      “Deposit”
shall
        have the meaning set forth in Section
        2.3.
        

      


      “Employment
        Agreements”
shall
        mean any and all employment agreements, written or oral, between the Contributor
        or its managing agent and the persons employed with respect to the Property.
        A
        schedule indicating all pertinent information with respect to each Employment
        Agreement in effect as of the date hereof, name of employee, social security
        number, wage or salary, accrued vacation benefits, other fringe benefits,
        etc.,
        is attached hereto as Exhibit B.

       

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

      


      “Existing
        Financing”
shall
        mean the existing loan from GE Capital to the LLC in the original principal
        amount of $13,000,000.00 made in connection with the Hotel.

       

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

       

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

       

      “Hotel”
shall
        mean the hotel and related amenities located on the Land.

       

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

       

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

       

      “Intangible
        Personal Property”
shall
        mean all intangible personal property owned or possessed by the Contributor
        or
        the LLC and used in connection with the ownership, operation, leasing, occupancy
        or maintenance of the Property, including, without limitation, the right
        to use
        the trade name “Hilton Garden Inn” and all variations thereof, the
        Authorizations, escrow accounts, insurance policies, general intangibles,
        business records, plans and specifications, surveys and title insurance policies
        pertaining to the real property and the personal property, all licenses,
        permits
        and approvals with respect to the construction, ownership, operation, leasing,
        occupancy or maintenance of the Property, any unpaid award for taking by
        condemnation or any damage to the Land by reason of a change of grade or
        location of or access to any street or highway, and the share of the Tray
        Ledger
        as hereinafter defined, excluding (a) any of the aforesaid rights the
        Acquiror elects not to acquire, (b) the Contributor’s cash on hand, in bank
        accounts and invested with financial institutions and (c) accounts receivable
        except for the above described share of the Tray Ledger.


      
        
          
          

        

        
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      “Interests”
shall
        mean collectively, the Shanti Interests, Kunj Interests, Devi Interests,
        Shree
        Interests, Desfor Interests, Parikh Interests, Shahriar Interests, FBO Neil
        Interests and FBO Jay Interests, consisting of an aggregate 100% membership
        interest in the LLC. 

      


      “Desfor
        Interests”
shall
        mean all right title and interest of Desfor in the LLC, consisting of a 4.5%
        membership interest in the LLC.

      


      “Devi
        Interests”
shall
        mean all right title and interest of Devi in the LLC, consisting of a 3.5%
        membership interest in the LLC.

      


      “FBO
        Neil Interests”
shall
        mean all right title and interest of FBO Neil in the LLC, consisting of a
        25%
        membership interest in the LLC.

      


      “FBO
        Jay Interests”
shall
        mean all right title and interest of FBO Jay in the LLC, consisting of a
        23%
        membership interest in the LLC.

      


      “Kunj
        Interests”
shall
        mean all right title and interest of Kunj in the LLC, consisting of a 16%
        membership interest in the LLC.

      


      “Parikh
        Interests”
shall
        mean all right title and interest of Parikh in the LLC, consisting of a 1%
        membership interest in the LLC.

      


      “Shahriar
        Interests”
shall
        mean all right title and interest of Shahriar in the LLC, consisting of a
        0.5%
        membership interest in the LLC.

      


      “Shanti
        Interests”
shall
        mean all right title and interest of Shanti in the LLC, consisting of a 20%
        membership interest in the LLC.

      


      “Shree
        Interests”
shall
        mean all right title and interest of Shree in the LLC, consisting of a 6.5%
        membership interest in the LLC.

       

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

       

      “Joinder”
shall
        have the meaning set forth in Section
        2.3(d).


      
        
          
          

        

        
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      "Knowledge"
        shall
        mean the actual knowledge of the Contributor that he would have had after
        making
        reasonable investigation. 

      


      “LP
        Units”
shall
        mean units representing an ownership interest in the Acquiror.

       

      “Land”
shall
        mean that certain parcel of real estate lying and being in New York City,
        New
        York County, New York at 148-18 134 Street, Jamaica, New York 11430, as more
        particularly described on Exhibit A
        attached
        hereto, together with all easements, rights, privileges, remainders, reversions
        and appurtenances thereunto belonging or in any way appertaining, and all
        of the
        estate, right, title, interest, claim or demand whatsoever of the Contributor
        therein, in the streets and ways adjacent thereto and in the beds thereof,
        either at law or in equity, in possession or expectancy, now or hereafter
        acquired.

       

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

       

      “LLC”
shall
        mean Metro JFK Associates, LLC, a New York limited liability company that
        owns,
        as its only assets, the leasehold interest in the Land, and the Hotel and
        Improvements located on the Land.

       

      “LLC
        Operating Agreement”
shall
        mean the current operating agreement of the LLC, a true and correct copy
        of
        which is attached hereto as Exhibit G.

       

      “Manager”
shall
        mean Hersha Hospitality Management, LP, a Pennsylvania limited
        partnership.

       

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

       

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

       

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

       

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


      
        
          
          

        

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

       

      “Reservation
        System”
shall
        mean the Contributor’s Reservation Terminal and Reservation System equipment and
        software, if any.

      


      “Securities
        Act”
shall
        mean the Securities Act of 1933, as amended.

       

      “Study
        Period”
shall
        mean the period commencing at 9:00 a.m. on the date hereof, and continuing
        through the time of Closing.

       

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

       

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

       

      “Title
        Company”
shall
        mean Summit Associates, 100
        Lafayette Street, 3rd
        Floor,
        New
        York, NY 10013, Telephone: 212/608-5866, Fax: 212/227-8745.

       

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

       

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

      


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

       

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

       

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

       

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

       

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

       

      
        
          
          

        

        
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      ARTICLE
        II

      


      CONTRIBUTION
        AND ACQUISITION; STUDY PERIOD;

      PAYMENT
        OF CONSIDERATION

      


      2.1    Contribution
        and Acquisition.
        Each
        Contributor agrees to contribute, assign and transfer their respective Interests
        to the Acquiror and the Acquiror agrees to accept the Interests in exchange
        for
        the Consideration and in accordance with the other terms and conditions set
        forth herein.

      


      2.2    Study
        Period.   (a)  The
        Acquiror shall have the right, until the end of the Study Period, to enter
        upon
        the Real Property and to perform, at the Acquiror's expense, such economic,
        surveying, engineering, environmental, topographic and marketing tests, studies
        and investigations as the Acquiror may deem appropriate. If such tests, studies
        and investigations warrant, in the Acquiror's sole, absolute and unreviewable
        discretion, the purchase of the Interests for the purposes contemplated by
        the
        Acquiror, then the Acquiror may elect to proceed to Closing and shall so
        notify
        the Contributor prior to the expiration of the Study Period. If for any reason
        the Acquiror does not so notify the Contributor of its determination to proceed
        to Closing prior to the expiration of the Study Period, or if the Acquiror
        notifies the Contributor, in writing, prior to the expiration of the Study
        Period that it has determined not to proceed to Closing, this Agreement
        automatically shall terminate, and the Acquiror shall be released from any
        further liability or obligation under this Agreement.

       

       (b)    During
        the Study Period, the Contributor shall make available to the Acquiror, its
        agents, auditors, engineers, attorneys and other designees, for inspection
        copies of all existing architectural and engineering studies, surveys, title
        insurance policies, zoning and site plan materials, correspondence,
        environmental audits and other related materials or information if any, relating
        to the Property which are in, or come into, the Contributor’s possession or
        control.

       

       (c)    The
        Acquiror hereby indemnifies and defends the Contributor against any loss,
        damage
        or claim arising from entry upon the Real Property by the Acquiror or any
        agents, contractors or employees of the Acquiror. The Acquiror, at its own
        expense, shall restore any damage to the Real Property caused by any of the
        tests or studies made by the Acquiror.

       

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


      
        
          
          

        

        
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      2.3    Payment
        of the Consideration.
        The
        Consideration shall be paid to the Contributor in the following
        manner:

       

       (a)    The
        Acquiror shall receive a credit against the Consideration in an amount equal
        to
        the outstanding balance (principal, interest, fees and the like), as of the
        Closing Date, of the Existing Financing encumbering the Property as such
        balance
        is evidenced by a letter from the lender, which loan the Acquiror shall take
        subject to or, at Acquiror’s option, assume.

       

       (b)    Acquiror
        has made a deposit of $7,000,000.00 (the “Deposit”) into an interest-bearing
        escrow account, which account bears interest at a rate of 8% per annum. The
        Deposit shall be refundable to Acquiror until the Closing. In the event Closing
        occurs, Acquiror
        shall receive a credit against the Consideration in an amount equal to the
        Deposit.

      


       (c)    At
        Closing, the Acquiror shall pay the balance of the Consideration, as adjusted
        by
        the prorations pursuant to Section 6.5 hereof (the “Closing Balance”), in the
        form of lawful money of the United States and in
        LP
        Units of Acquiror. Approximately $6,000,000.00 of the Closing Balance plus
        an
        amount equal to the sum of all expenses incurred by the Contributors related
        to
        the transactions contemplated by this Agreement, shall be paid to Contributors
        in the form of LP Units, which, for the purposes of this Agreement, shall
        be
        deemed to have a per LP Unit value equal to $9.12 per share for the common
        shares of beneficial interest of Hersha Hospitality Trust, a Maryland real
        estate investment trust ("Hersha").

      


       (d)    Notwithstanding
        the foregoing, no LP Units shall be issued by the Acquiror, and following
        such
        issuance no LP Units shall be transferred by the Contributor to, any person
        or
        entity that is not an accredited investor within the meaning of Regulation
        D
        promulgated by the United States Securities and Exchange Commission (“SEC”)
        under the Securities Act of 1933, as amended (the “Securities
        Act”),
        and
        to the extent any such non-accredited person or entity is entitled to receive
        any portion of the Consideration, such portion shall be paid in cash rather
        than
        LP Units and the number of LP Units issuable in payment of the Consideration
        shall be reduced accordingly. The Contributor agrees to take such actions
        as
        Acquiror may reasonably request in order to assure that the issuance of any
        LP
        Units pursuant to this Agreement complies with the requirements of the
        Securities Act and Regulation D promulgated thereunder. Except as otherwise
        expressly set forth in this Agreement, the Contributor acknowledges and agrees
        that once the Closing occurs, the Contributor shall no longer hold any right,
        title or interest in the Property (except through its ownership of Acquiror).
        Contributor hereby directs Acquiror to pay, issue and distribute (as applicable)
        the Consideration on the Closing Date to the Contributors in such amounts
        set
        forth in an amendment to this Agreement mutually agreed on by the parties
        prior
        to Closing. 
        No
        fractional LP Units will be issued as Consideration hereunder, but in lieu
        of
        issuing fractional LP Units, the value thereof shall be paid in cash. The
        Contributors that acquire LP Units acknowledge that any certificates evidencing
        the LP Units will bear appropriate legends indicating (i) that the LP Units
        have
        not been registered under the Securities Act, and (ii) that Acquiror’s Limited
        Partnership Agreement (the “Acquiror’s
        Limited Partnership Agreement”)
        restricts the transfer of the LP Units. Each Contributor that receives LP
        Units
        shall upon receipt of the LP Units at Closing become a limited partner of
        Acquiror by executing the form of joinder (the “Joinder”)
        to the
        Acquiror’s Limited Partnership Agreement attached hereto as Exhibit
        J
        and
        deliver the executed Joinder at closing pursuant to the terms of Section
        6.2
        hereof;
provided,
        however,
        that
        any Contributor that is presently a limited partner of the Acquiror shall
        not be
        required to execute and deliver the Joinder. By executing and delivering
        the
        Joinder in accordance with the terms hereof each Contributor acknowledges
        that
        it will be bound by the terms and provisions of the Acquiror’s Limited
        Partnership Agreement.


      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      


      ARTICLE
        III

      


      CONTRIBUTOR’S
        REPRESENTATIONS, WARRANTIES AND COVENANTS

       

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

      


      3.1    Identity
        and Power.
        The
        Contributor is an individual, a limited partnership or a trust and has all
        requisite powers and all governmental licenses, authorizations, consents
        and
        approvals necessary to carry on its business as now conducted, to own, lease
        and
        operate his properties, to execute and deliver this Agreement and any document
        or instrument required to be executed and delivered on behalf of the Contributor
        hereunder, to perform his obligations under this Agreement and any such other
        documents or instruments and to consummate the transactions contemplated
        hereby.


      


      3.2    Authorization,
        No Violations and Notices.

       

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


      
        
          
          

        

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

       

       (i)    violate,
        conflict with, result in a breach of any provision of, constitute a default
        (or
        an event that, which, with or lapse of time or both, would constitute a default)
        under, result in the termination of, accelerate the performance required
        by, or
        result in a right of termination or acceleration, or the creation of any
        lien,
        security interest, charge, or encumbrance upon any of the Property or assets
        of
        the LLC, under any of the terms, conditions, or provisions of, the Articles
        of
        Organization, the LLC Operating Agreement, or any note, bond, mortgage,
        indenture, deed of trust, license (including without limitation, the License),
        lease, agreement, or other instrument, or obligation to which the LLC is
        a
        party, or by which the LLC may be bound, or to which the LLC or the Property
        or
        assets may be subject; or

       

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

      


      3.3    Litigation
        with respect to Contributor.
        There
        is no action, suit, claim or proceeding pending or, to the Contributor’s
        Knowledge, threatened against or affecting the Contributor or his assets
        in any
        court, before any arbitrator or before or by any governmental body or other
        regulatory authority (i) that would materially adversely affect the Contributor
        or the Interests, (ii) that seeks restraint, prohibition, damages or other
        relief in connection with this Agreement or the transactions contemplated
        hereby, or (iii) would delay the consummation of any of the transactions
        contemplated hereby. The Contributor is not subject to any judgment, decree,
        injunction, rule or order of any court relating to the Contributor’s
        participation in the transactions contemplated by this Agreement. 

      


      3.4    Interests
        and Property.
        

       

      (a)    The
        Interests are, on the date hereof, and will be on the Closing Date, free
        and
        clear of all liens and encumbrances and the Contributor has good, marketable
        title thereto and the right to convey same in accordance with the terms of
        this
        Agreement. Upon delivery of the Contributor’s Assignment and Assumption
        Agreement to the Acquiror at Closing, good valid and marketable title to
        the
        Contributor’s Interests, free and clear of all liens and encumbrances, will pass
        to the Acquiror. The Interests constitute the only outstanding securities
        and
        membership interests of the LLC.

       

       (b)    Except
        for the lien created in connection with the Existing Financing, the Property
        is,
        on the date hereof, and will be on the Closing Date, free and clear of all
        liens
        and encumbrances, and the LLC has good, marketable title thereto and the
        right
        to convey same. The LLC is the fee simple owner of the Real Property and
        the
        sole owner of the Property.


      
        
          
          

        

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

      


      3.6    Brokerage
        Commission.
        The
        Contributor has not engaged the services of, nor is it or will it or Acquiror
        become liable to, any real estate agent, broker, finder or any other person
        or
        entity for any brokerage or finder’s fee, commission or other amount with
        respect to the transactions described herein on account of any action by
        the
        Contributor.

      


      3.7    The
        LLC.

       

       (a)    The
        LLC
        is a limited liability company duly formed, validly existing and in good
        standing under the laws of the State of New York and has all requisite powers
        necessary to carry on its business as now conducted, to own, lease and operate
        its properties.

       

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

       

       
        (i)    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, accelerate the performance required
        by, or
        result in a right of termination or acceleration, or the creation of any
        lien,
        security interest, charge, or encumbrance upon any of the Property or other
        assets of the LLC, under any of the terms, conditions, or provisions of,
        the
        Articles of Organization or LLC Operating Agreement, or any note, bond,
        mortgage, indenture, deed of trust, license, lease, agreement, or other
        instrument or obligation to which the LLC is a party, or by which the LLC
        may be
        bound, or to which the LLC or its properties or assets may be subject;
        or

       

       
        (ii)    violate
        any judgment, ruling, order, writ, injunction, decree, statute, rule, or
        regulation applicable to the LLC or any of the LLC’s properties or
        assets.

       

       (c)    Except
        for the Contributor, no party has any interest in the LLC or the Property
        or any
        portion thereof, or the right or option to acquire any interest in the LLC
        or
        the Property or any portion thereof. The LLC has no subsidiaries and does
        not
        directly or indirectly own any securities of or interest in any other entity,
        including, without limitation, any LLC or joint venture.

       

      (d)    The
        LLC
        has conducted no business other that the ownership and operation of the
        Property.

      


      3.8    Liabilities,
        Debts and Obligations.
        Except
        for the Continuing Liabilities and the Existing Financing, the LLC has no
        liabilities, debts or obligations.

      


      3.9    Tax
        Matters.

       

       (a)    Notwithstanding
        anything to the contrary contained in this Agreement, including without
        limitation the use of words and phrases such as “sell,” “sale,” purchase,” and
“pay,” the parties hereto acknowledge and agree that it is their intent that the
        transaction contemplated hereby shall be treated for federal income tax purposes
        pursuant to Section 721 of the Internal Revenue Code of 1986, as amended,
        as the contribution of the Interests by the Contributor to the Acquiror in
        exchange for the Consideration, and not as a transaction in which any
        Contributor is acting other than in the capacity as a prospective partner
        in the
        Acquiror. 


      
        
          
          

        

        
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       (b)    Each
        Contributor represents and warrants that it has obtained from its own counsel
        advice regarding the tax consequences of (i) the transfer of the Interests
        to
        the Acquirer and the receipt of the Consideration therefor, (ii) the
        Contributor’s admission as a limited partner of the Acquiror, and (iii) any
        other transaction contemplated by this Agreement. Each Contributor further
        represents and warrants that it has not relied on the Acquiror or the Acquiror’s
        representatives or counsel for such tax advice.

      


       (c)    The
        Contributor has caused the LLC to file within the time and in the manner
        prescribed by law all federal, state, and local tax returns and reports,
        including but not limited to income, gross receipts, intangible, real property,
        excise, withholding, franchise, sales, use, employment, personal property,
        and
        other tax returns and reports, required to be filed by the LLC under the
        laws of
        the United States and of each state or other jurisdiction in which the LLC
        conducts business activities requiring the filing of tax returns or reports.
        All
        tax returns and reports filed by the LLC are true and correct in all material
        respects. The LLC has paid in full all taxes of whatever kind or nature for
        the
        periods covered by such returns. The LLC has not been delinquent in the payment
        of any tax, assessment, or governmental charge or deposit and has no tax
        deficiency or claim outstanding, assessed, threatened, or proposed against
        it.
        The charges, accruals, and reserves for unpaid taxes on the books and records
        of
        the LLC as of the Closing Date are sufficient in all respects for the payment
        of
        all unpaid federal, state, and local taxes of the LLC accrued for or applicable
        to all periods ended on or before the Closing Date. There are no tax liens,
        whether imposed by the United States, any state, local, or other taxing
        authority, outstanding against the LLC or any of its assets. The federal,
        state,
        and local tax returns of the LLC have not been audited, nor has the LLC or
        the
        Contributor received any notice of any federal, state, or local audit.
The
        LLC
        has not obtained or received any extension of time (beyond the Closing Date)
        for
        the assessment of deficiencies for any years or waived or extended the statute
        of limitations for the determination or collection of any tax. To the
        Contributor’s Knowledge, no unassessed tax deficiency is proposed or threatened
        against the LLC.

      


      (d)    All
        taxes, including real property taxes and rental taxes or the equivalent,
        and all
        interest and penalties due thereon, required to be paid or collected by the
        LLC
        in connection with the operation of the Property as of the Closing Date will
        have been collected and/or paid to the appropriate governmental authorities,
        as
        required or such amounts shall be pro-rated as of the Closing Date. The
        Contributor shall cause the LLC to file, all necessary returns and petitions
        required to be filed through the Closing Date. The Contributor shall cause
        the
        LLC to prepare and file all federal and state income tax returns for the
        tax
        period ending on the Closing Date, which shall reflect the termination for
        tax
        purposes of the LLC. 


      
        
          
          

        

        
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      3.10    Contracts
        and Agreements.
        There
        is no loan agreement, guarantee, note, bond, indenture and other debt
        instrument, lease and other contract to which the LLC is a party or by which
        its
        assets are bound other than Existing Financing, Permitted Title Exceptions,
        the
        Leases, and the Operating Agreements.

      


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

      


      3.12    Compliance
        with Existing Laws.
        The LLC
        possesses all Authorizations, each of which is valid and in full force and
        effect, and, to Contributor’s Knowledge, no provision, condition or limitation
        of any of the Authorizations has been breached or violated. The LLC has not
        misrepresented or failed to disclose any relevant fact in obtaining all
        Authorizations, and the Contributor has no Knowledge of any change in the
        circumstances under which those Authorizations were obtained that result
        in
        their termination, suspension, modification or limitation. The Contributor
        has
        no Knowledge, nor has he received written notice within the past three years,
        of
        any existing violation of any provision of any applicable building, zoning,
        subdivision, environmental or other governmental ordinance, resolution, statute,
        rule, order or regulation, including but not limited to those of environmental
        agencies or insurance boards of underwriters, with respect to the ownership,
        operation, use, maintenance or condition of the Property or any part thereof,
        or
        requiring any repairs or alterations other than those that have been made
        prior
        to the date hereof.

      


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

      


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

      


      3.15    Insurance.
        All of
        the LLC’s Insurance Policies are valid and in full force and effect, all
        premiums for such policies were paid when due and the Contributor shall cause
        the LLC to pay all future premiums for such policies (and any replacements
        thereof) on or before the due date therefor. The Contributor shall cause
        the LLC
        to pay all premiums on, and shall cause the LLC not to cancel or allow to
        expire, any of the LLC’s Insurance Policies prior to the Closing 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 Contributor shall cause the LLC to name the Acquiror
        as an
        additional insured on each of the LLC’s Insurance Policies.


      
        
          
          

        

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

      


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

      


      3.18    Labor
        Disputes and Agreements.
        There
        are not currently any labor disputes pending or, threatened as to the operation
        or maintenance of the Property or any part thereof. The LLC is not a party
        to
        any union or other collective bargaining agreement with employees employed
        in
        connection with the ownership, operation or maintenance of the Property.
        The
        Acquiror will not be obligated to give or pay any amount to any employee
        of the
        LLC, and the Acquiror shall not have any liability under any pension or profit
        sharing plan that the LLC may have established with respect to the Property
        or
        their or its employees.

      


      3.19    Financial
        Information.
        To the
        Contributor’s Knowledge, except as otherwise disclosed in writing to the
        Acquiror prior to the end of the Study Period, for each of the LLC’s accounting
        years, when a given year is taken as a whole, all of the LLC’s financial
        information previously delivered or to be delivered to the Acquiror is and
        shall
        be correct and complete in all material respects and presents accurately
        the
        financial condition of the LLC and results of the operations of the Property
        for
        the periods indicated, except that such statements do not have footnotes
        or
        schedules that may otherwise be required by GAAP. If requested by the Acquiror,
        the Contributor shall cause the LLC to deliver promptly all four-week period
        ending financial information available to the LLC. The LLC’s financial
        information is prepared based on books and records maintained by the LLC
        in
        accordance with the LLC’s accounting system. The LLC’s financial information has
        been provided to the Acquiror without any changes or alteration thereto.
        To the
        best of Contributor's Knowledge, since the date of the last financial statement
        included in the LLC's financial information, there has been no material adverse
        change in the financial condition or in the operations of the
        Property.


      
        
          
          

        

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

      


      3.21    Operation
        of Property.
        The
        Contributor covenants that between the date hereof and the Closing Date,
        Contributor shall cause the LLC to (a) operate the Property only in the usual,
        regular and ordinary manner consistent with the LLC’s prior practice, (b)
        maintain the books of account and records in the usual, regular and ordinary
        manner, in accordance with sound accounting principles applied on a basis
        consistent with the basis used in keeping its books in prior years, and (c)
        use
        all reasonable efforts to preserve intact the present business organization,
        keep available the services of the present officers and employees and preserve
        their relationships with suppliers and others having business dealings with
        them. The Contributor shall cause the LLC to continue to make good faith
        efforts
        to take guest room reservations and to book functions and meetings and otherwise
        to promote the business of the Property in generally the same manner as the
        LLC
        did prior to the execution of this Agreement. Except as otherwise permitted
        hereby, from the date hereof until Closing, the Contributor shall use its
        good
        faith efforts to ensure that the LLC shall not take any action or fail to
        take
        action the result of which (i) would have a material adverse effect on the
        Property or the Acquiror’s ability to continue the operation thereof after the
        Closing Date in substantially the same manner as presently conducted, (ii)
        reduce or cause to be reduced any room rents or any other charges over which
        Contributor has operational control, or (iii) would cause any of the
        representations and warranties contained in this Article
        III
        to be
        untrue as of Closing.

      


      3.22    Bankruptcy
        with respect to LLC.
        No Act
        of Bankruptcy has occurred with respect to the LLC.

      


      3.23    Hazardous
        Substances.
        Except
        for matters in LLC’s or Acquiror's audits, Contributor has no Knowledge:
        (a) of the presence of any “Hazardous Substances” (as defined below) 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, or any portion thereof, or (c)
        of
        the presence of any PCB transformers serving, or stored on, the Property,
        or any
        portion thereof, and Contributor 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 (as used herein, “Hazardous Substances” shall mean any
        substance or material whose presence, nature, quantity or intensity of
        existence, use, manufacture, disposal, transportation, spill, release or
        effect,
        either by itself or in combination with other materials is either:
        (1) potentially injurious to the public health, safety or welfare, the
        environment or the Property, (2) regulated, monitored or defined as a
        hazardous or toxic substance or waste by any Governmental Body, or (3) a
        basis for liability of the owner of the Property to any Governmental Body
        or
        third party, and Hazardous Substances shall include, but not be limited to,
        hydrocarbons, petroleum, gasoline, crude oil, or any products, by-products
        or
        components thereof, and asbestos). Notwithstanding anything to the contrary
        contained herein Contributor shall have no liability to Acquiror for any
        Hazardous Substances of which Contributor has no Knowledge.


      
        
          
          

        

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

      


      3.25    License.
        

       

      (a)      
        The
        license from Hilton Inns, Inc., or its affiliate (the “Licensor”), with respect
        to the Hotel (the “License”) is, and at Closing will be, valid and in full force
        and effect, and on the Closing Date neither the Manager nor the LLC will
        be in
        default with respect thereto (with or without the giving of any required
        notice
        and/or lapse of time).

       

      (b)      
        The
        Manager and the LLC shall receive written approval from the Licensor consenting
        to the contribution of the Interests and the Hotel to Acquiror as contemplated
        hereunder.

       

      (c)      
        Neither
        the execution, delivery, or performance by the Contributor of this Agreement,
        nor the consummation of the transactions contemplated hereby, nor compliance
        by
        the Contributor or the LLC 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, accelerate the performance required
        by, or
        result in a right of termination under any of the terms, conditions, or
        provisions of, the License.

      


      3.26    Independent
        Audit.
        Contributor shall provide access by Acquiror's representatives, to all financial
        and other information relating to the Property and the LLC.

      


      3.27    Bulk
        Sale Compliance.
        Contributor shall indemnify Acquiror against any claim, loss or liability
        arising under the bulk sales law in connection with the transaction contemplated
        herein.

      


      3.28    Sufficiency
        of Certain Items.
        The
        Property contains not less than:

       

      (a)    a
        sufficient amount of furniture, furnishings, color television sets, carpets,
        drapes, rugs, floor coverings, mattresses, pillows, bedspreads and the like,
        to
        furnish each guest room, so that each such guest room is, in fact, fully
        furnished; and

       

      (b)    a
        sufficient amount of towels, washcloths and bed linens, so that there are
        three
        sets of towels, washcloths and linens for each guest room (one on the beds,
        one
        on the shelves, and one in the laundry), together with a sufficient supply
        of
        paper goods, soaps, cleaning supplies and other such supplies and materials,
        as
        are reasonably adequate for the current operation of the Hotel.

      


      3.29    Intentionally
        Omitted.

      


      3.30    Leases.
        True,
        complete copies of the Leases, are attached as Exhibit
        D
        hereto.
        The Leases are, and will at Closing be, in full force and effect and neither
        Contributor nor the LLC, is in default and the Contributor shall make good
        faith
        efforts for himself and the LLC not to be in default with respect thereto
        (with
        or without the giving of any notice and/or lapse of time). The Leases are,
        or
        will be at Closing, freely assignable by Contributor and Contributor will
        have
        obtained all consents of any third party necessary to assign the Leases to
        Acquiror.


      
        
          
          

        

        
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      3.31    Noncontravention.
        The
        execution and delivery of, and the performance by the Contributor of his
        obligations under this Agreement do not and will not contravene, or constitute
        a
        default under, any provision of applicable law or regulation, or any agreement,
        judgment, injunction, order, decree or other instrument binding upon the
        Contributor, or result in the creation of any lien or other encumbrance on
        any
        asset of the Contributor. There are no outstanding agreements (written or
        oral)
        pursuant to which the Contributor (or any predecessor to or representative
        of
        the Contributor) has agreed to contribute or has granted an option or right
        of
        first refusal to acquire the Interests or the Property or any part
        thereof.

      


      3.32    Securities
        Law Matters.

      


      (a)    Each
        Contributor is knowledgeable, sophisticated and experienced in business and
        financial matters; each Contributor has previously invested in securities
        similar to the LP Units and fully understands the limitations on transfer
        imposed by the federal securities laws and as described in this Agreement.
        Each
        Contributor is able to bear the economic risk of holding the LP Units for
        an
        indefinite period and is able to afford the complete loss of its investment
        in
        the LP Units; each Contributor has received and reviewed all information
        and
        documents about or pertaining to Acquiror and Hersha, the business and prospects
        of Acquiror and Hersha and the issuance of the LP Units as each Contributor
        deems necessary or desirable; and each Contributor has had the opportunity
        to
        review public filings made with the SEC pursuant to the Exchange Act related
        to
        Acquiror and Hersha; and each Contributor has been given the opportunity
        to
        obtain any additional information or documents and to ask questions and receive
        answers about such information and documents, Acquiror, Hersha, the business
        and
        prospects of Acquiror and Hersha and the LP Units which each Contributor
        deems
        necessary or desirable to evaluate the merits and risks related to its
        investment in the LP Units and to conduct its own independent valuation of
        the
        LP Units; and each Contributor understands and has taken cognizance of all
        risk
        factors related to the purchase of the LP Units. Each Contributor was at
        no time
        presented with or solicited by any form of general solicitation or general
        advertising, including, but not limited to, any advertisement, article, notice
        or other communication published in any newspaper, magazine, or similar media
        or
        broadcast over television or radio, or any seminar or meeting whose attendees
        have been invited by any general solicitation or general advertising in
        connection with the acquisition of the LP Units contemplated hereby. Each
        Contributor is a sophisticated real estate investor. In acquiring the LP
        Units
        and engaging in this transaction, each Contributor is not relying upon any
        representations made to it by Acquiror or Hersha, or any of the officers,
        employees, or agents of Acquiror or Hersha not contained herein. Each
        Contributor is relying upon its own independent analysis and assessment
        (including with respect to taxes), and the advice of such Contributor's advisors
        (including tax advisors), and not upon that of Acquiror or Hersha or any
        of
        Acquiror’s or Hersha’s advisors or affiliates, for purposes of evaluating,
        entering into, and consummating the transactions contemplated by this Agreement.
        Each Contributor represents and warrants that it has reviewed and approved
        the
        form of the Acquiror's Limited Partnership Agreement attached hereto as
Exhibit
        K.


      
        
          
          

        

        
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       (b)    Each
        Contributor understands that the LP Units have not been registered under
        the
        Securities Act or any state securities acts and are instead being offered
        and
        sold in reliance on an exemption from such registration requirements. The
        LP
        Units issuable to each Contributor are being acquired solely for each
        Contributor’s own account, for investment, and are not being acquired with a
        view to, or for resale in connection with, any distribution, subdivision,
        or
        fractionalization thereof, in violation of such laws, and each Contributor
        has
        no present intention to enter into any contract, undertaking, agreement,
        or
        arrangement with respect to any such resale. Each Contributor understands
        that
        any certificates evidencing the LP Units will contain appropriate legends
        as
        required by the Acquiror’s Limited Partnership Agreement that reflect the
        non-negotiability of the certificate and that the LP Units represented by
        the
        certificate are governed by and are transferable only in accordance with
        the
        provisions of the Acquiror’s Limited Partnership Agreement.

      


       (c)    Each
        Contributor is an "accredited investor" as that term is defined in Rule 501
        of
        Regulation D under the Securities Act. In order to be an “accredited investor”,
        as such term is defined in Rule 501 of Regulation D promulgated under the
        Securities Act, you must be one of the following:

      


       
        (i)    a
        bank as
        defined in Section 3(a)(2) of the Securities Act, or a savings and loan
        association or other institution as defined in Section 3(a)(5)(A) of the
        Securities Act, whether acting in its individual or fiduciary
        capacity;

      


       
        (ii)    a
        broker
        or dealer registered pursuant to Section 15 of the Securities Exchange Act
        of
        1934, as amended (the “Exchange
        Act”);

      


       
        (iii)   an
        insurance company as defined in Section 2(13) of the Securities
        Act;

      


       
        (iv)           an
        investment company registered under the Investment Company Act of 1940, as
        amended;

      


       
        (v)    a
        business development company as defined in Section 2(a)(48) of the Investment
        Company Act of 1940, as amended;

      


       
        (vi)   a
        Small
        Business Investment Company licensed by the U.S. Small Business Administration
        under Section 301(c) or (d) of the Small Business Investment Act of 1958,
        as
        amended;

      


       
        (vii)          a
        plan
        established and maintained by a state, its political subdivisions, or any
        agency
        or instrumentality of a state or its political subdivisions, for the benefit
        of
        its employees, if such plan has total assets in excess of
        $5,000,000;

      


        (viii)       
        an
        employee benefit plan within the meaning of the Employee Retirement Income
        Security Act of 1974, as amended if the investment decision is made by a
        plan
        fiduciary, as defined in Section 3(21) of such Act, which is either a bank,
        savings and loan association, insurance company or registered investment
        adviser, or if the employee benefit plan has total assets in excess of
        $5,000,000, or, if a self-directed plan, with investment decisions made sole
        by
        persons that are accredited investors;


      
        
          
          

        

        
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        (ix)   a
        private
        business development company as defined in Section 202(a)(22) of the Investment
        Advisors Act of 1940, as amended;

      


       
        (x)    an
        (a)
        organization described in Section 501(c)(3) of the Internal Revenue Code
        of
        1986, as amended, (b) corporation, (c) Massachusetts or similar business
        trust,
        (d) partnership, or (e) limited liability company, in each case not formed
        for
        the specific purpose of acquiring LP Units of the Acquiror or shares of Hersha’s
        common stock, with total assets in excess of $5,000,000;

      


       
        (xi)    a
        director or executive officer of Acquiror or Hersha;

      


       
        (xii)   a
        natural
        person whose individual net worth, or joint net worth with his or her spouse,
        at
        the time of his or her acquisition of the LP Units exceeds
        $1,000,000;

      


        (xiii)         
        a
        natural
        person who has an individual income in excess of $200,000 in each of the
        two
        most recent years or joint income with that person’s spouse in excess of
        $300,000 in each of those years and has a reasonable expectation of reaching
        the
        same income level in the current year;

      


        (xiv)        
        a
        trust,
        with total assets in excess of $5,000,000, not formed for the specific purpose
        of acquiring LP Units of the Acquiror or shares of Hersha’s common stock whose
        acquisition of LP Units of the Acquiror or shares of Hersha’s common stock is
        directed by a sophisticated person as described in Rule 506(b)(2)(ii) of
        Regulation D under the Securities Act; or

      


       
        (xv)          an
        entity
        in which all of the equity owners are accredited investors. 

       

      3.33    Patriot
        Act Representations.
        Each
        Contributor and, to the actual knowledge of such Contributor, any direct
        or
        indirect owner of the LLC or such Contributor, (i) are not included on any
        Government List (as defined below), (ii) are not persons who have been
        determined by competent authority to be subject to the prohibitions contained
        in
        the Presidential Executive Order No. 13224 or any other similar prohibitions
        contained in the rules and regulations of the OFAC or in any enabling
        legislation or other Presidential Executive Orders in respect thereof, (iii)
        have not been indicted or convicted of any Patriot Act Offenses, or (iv)
        are not
        currently under investigation by any governmental authority for alleged criminal
        activity. For purposes of this Agreement, (i) “Government List” means (A) the
        Specially Designated Nationals and Blocked Persons List maintained by OFAC,
        (B)
        any other list of terrorists, terrorist organizations or narcotics traffickers
        maintained pursuant to any of the Rules and Regulations of OFAC, or (C) any
        similar list maintained by the United States Department of State, the United
        States Department of Commerce or any other governmental authority or pursuant
        to
        any Executive Order of the President of the United States of America; (ii)
        “OFAC” means the Office of Foreign Asset Control, U.S. Department of the
        Treasury, (iii) “Patriot Act” means the Uniting and Strengthening America by
        Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
        (USA
        PATRIOT ACT) Act of 2001, as the same may be amended from time to time, and
        corresponding provisions of future laws, and (iv) “Patriot Act Offense” means
        any violation of the criminal laws of the United States of America or of
        any of
        the several states, or that would be a criminal violation if committed within
        the jurisdiction of the United States of America or any of the several states,
        relating to terrorism or the laundering of monetary instruments, including
        any
        offense under (A) the criminal laws against terrorism, (B) the criminal laws
        against money laundering, (C) the Bank Secrecy Act, as amended, (D) the Money
        Laundering Control Act of 1986, as amended, or (E) the Patriot Act and also
        includes the crimes of conspiracy to commit, or aiding and abetting another
        to
        commit, any of the foregoing.


      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      


      Each
        of
        the representations, warranties and covenants contained in this Article
        III
        and its
        various subparagraphs are intended for the benefit of the Acquiror and may
        be
        waived in whole or in part, by the Acquiror, but only by an instrument in
        writing signed by the Acquiror. Each of said representations, warranties
        and
        covenants shall survive the closing of the transaction contemplated hereby
        for
        twenty-four (24) months, and no investigation, audit, inspection, review
        or the
        like conducted by or on behalf of the Acquiror shall be deemed to terminate
        the
        effect of any such representations, warranties and covenants, it being
        understood that the Acquiror has the right to rely thereon and that each
        such
        representation, warranty and covenant constitutes a material inducement to
        the
        Acquiror to execute this Agreement and to close the transaction contemplated
        hereby and to pay the Consideration to the Contributor. Acquiror
        acknowledges and agrees that, except for the representations and warranties
        expressly set forth herein, Acquiror is acquiring the LLC and Property “AS-IS,
        WHERE-IS” with no representations or warranties by or from Contributor, express
        or implied, or any nature whatsoever. 

       

      ARTICLE
        IV

      


      ACQUIROR'S
        REPRESENTATIONS, WARRANTIES AND COVENANTS

       

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

      


      4.1    Organization
        and Power.
        The
        Acquiror is a limited partnership duly organized, validly existing and in
        good
        standing under the laws of the Commonwealth of Virginia, and has all partnership
        powers and all governmental licenses, authorizations, consents and approvals
        to
        carry on its business as now conducted and to enter into and perform its
        obligations under this Agreement and any document or instrument required
        to be
        executed and delivered on behalf of the Acquiror hereunder.

      


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


      
        
          
          

        

        
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      4.3    Litigation.
        There
        is no action, suit or proceeding, pending or known to be threatened, against
        or
        affecting the Acquiror in any court or before any arbitrator or before any
        Governmental Body which (a) in any manner raises any question affecting the
        validity or enforceability of this Agreement or any other agreement or
        instrument to which the Acquiror is a party or by which it is bound and that
        is
        to be used in connection with, or is contemplated by, this Agreement,
        (b) could materially and adversely affect the ability of the Acquiror to
        perform its obligations hereunder, or under any document to be delivered
        pursuant hereto. 

      


      4.4    Bankruptcy.
        No Act
        of Bankruptcy has occurred with respect to the Acquiror.

      


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

       

      ARTICLE
        V

      


      CONDITIONS
        AND ADDITIONAL COVENANTS

       

      The
        Acquiror's obligations hereunder are subject to the satisfaction of the
        following conditions precedent and the compliance by the Contributor with
        the
        following covenants:

      


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

      


      5.2    Representations,
        Warranties and Covenants; Obligations of Contributor;
        Certificate.
        All of
        the Contributor’s representations and warranties made in this Agreement shall be
        true and correct as of the date hereof and as of the Closing Date as if then
        made, there shall have occurred no material adverse change in the financial
        condition of the Property or the LLC since the date hereof, the Contributor
        shall have performed all of its material covenants and other obligations
        under
        this Agreement and the Contributor shall have executed and delivered to the
        Acquiror at Closing a certificate to the foregoing effect.

      


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

      


      5.4    Condition
        of Improvements.
        The
        Improvements and the Tangible Personal Property (including but not limited
        to
        the mechanical systems, plumbing, electrical, wiring, appliances, fixtures,
        heating, air conditioning and ventilating equipment, elevators, boilers,
        equipment, roofs, structural members and furnaces) shall be in the same
        condition at Closing as they are as of the date hereof, reasonable wear and
        tear
        excepted. Prior to Closing, the Contributor shall not have diminished the
        quality or quantity of maintenance and upkeep services heretofore provided
        to
        the Real Property and the Tangible Personal Property and the Contributor
        shall
        not have diminished the Inventory. The Contributor shall not have removed
        or
        caused or permitted to be removed any part or portion of the Real Property
        or
        the Tangible Personal Property unless the same is replaced, prior to Closing,
        with similar items of at least equal quality and acceptable to the
        Acquiror.


      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      


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

      


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

      


      5.7    Interests.
        From
        the date hereof to and including the Closing Date, Contributor shall not
        sell,
        assign, pledge, hypothecate or otherwise transfer the Interests, except as
        contemplated by this Agreement, nor shall the Contributor cause or permit
        the
        LLC to issue any securities or membership interests to any person or to sell,
        pledge, transfer or otherwise dispose of the Property or any interest
        therein.

       

      5.8    Existing
        Financing.
        Acquiror acknowledges that the Property and the LLC are subject to the Existing
        Financing, a loan in the sum of $13.0 million from GE Capital, and the Existing
        Financing shall continue to be an obligation of the LLC as of the Closing
        Date.


      


      5.9    Third
        Party Consents.
        As a
        condition to Closing, the LLC shall receive written approval from the Licensor
        and GE Capital (i) to the contribution of the Interests to Acquiror as
        contemplated hereunder and (ii) to the percentage lease structure whereby,
        on
        the Closing Date, the LLC shall lease the Property to 44 New England Management
        Company (“Lessee”) pursuant to a percentage lease, and Lessee shall enter into a
        new management agreement with Manager.

       

      ARTICLE
        VI

      


      CLOSING

      


      6.1    Closing.
        Closing
        shall be held at a location that is mutually acceptable to the parties, on
        or
        before February 28, 2006. 

      


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

       

       (a)    Certificates
        representing the Interests.

       

       (b)    The
        certificate required by Section 5.2.

       

       (c)    The
        Assignment and Assumption Agreement.


      
        
          
          

        

        
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       (d)    Certificate(s)/Registration
        of Title for any vehicle owned by the Contributor and used in connection
        with
        the Property.

       

       (e)    Such
        agreements, affidavits or other documents as may be required by the Title
        Company to issue the Owner's Title Policy with affirmative coverage over
        mechanics' and materialmen's liens.

       

       (f)    The
        FIRPTA Certificate.

       

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

       

       (h)    Copies
        of
        the LLC’s Organizational Documents.

       

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

       

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

       

       (k)    Such
        proof as the Acquiror may reasonably require with respect to Contributor’s
        compliance with the bulk sales laws or similar statutes.

       

       (l)    
A
        written
        instrument executed by the Contributor, conveying and transferring to the
        Acquiror all of the Contributor’s right, title and interest in any telephone
        numbers and facsimile numbers relating to the Property, and, if the Contributor
        maintains a post office box, conveying to the Acquiror all of its interest
        in
        and to such post office box and the number associated therewith, so as to
        assure
        a continuity in operation and communication.

       

      (m)   All
        current real estate and personal property tax bills in the Contributor’s
        possession or under its control.

       

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

       

       (o)    An
        updated schedule of employees, showing salaries and duties with a statement
        of
        the length of service of each such employee, brought current to a date not
        more
        than 48 hours prior to the Closing.

       

      (p)    A
        complete list of all advance room reservations, functions and the like, in
        reasonable detail so as to enable the Acquiror to honor the Contributor’s
        commitments in that regard.


      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

      


       (q)    A
        list of
        the Contributor’s outstanding accounts receivable as of midnight on the date
        prior to the Closing, specifying the name of each account and the amount
        due the
        Contributor.

       

       (r)    
Possession
        of the Property and all keys for the Property.

       

       (s)    All
        books, records, operating reports, appraisal reports, files and other materials
        in the Contributor’s possession or control which are necessary in the Acquiror’s
        discretion to maintain continuity of operation of the Property.

       

       (t)    
To
        the
        extent permitted under applicable law, documents of transfer necessary to
        transfer to the Acquiror the Contributor’s employment rating for workmens'
        compensation and state unemployment tax purposes.

       

       (u)    An
        assignment of all warranties and guarantees from all contractors and
        subcontractors, manufacturers, and suppliers in effect with respect to the
        Improvements.

       

       (v)    Complete
        set of “as-built” drawings for the Improvements as available in Contributor’s
        possession.

       

       (w)    Such
        proof, reasonably acceptable to the Acquiror evidencing the payment by
        Contributor of all transfer taxes incurred in connection with the transactions
        contemplated by this Agreement.

       

       (x)    
The
        Joinder.

      


       (y)    Any
        other
        document or instrument reasonably requested by the Acquiror or required
        hereby.

      


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

       

      (a)    The
        Consideration described in Section 2.3.

       

      (b)    The
        Assignment and Assumption Agreement.

       

      (c)    The
        Joinder.

      


      (d)    Any
        other
        document or instrument reasonably requested by the Contributor or required
        hereby.

      


      6.4    Closing
        Costs.
        Each
        party shall pay its own legal fees and expenses. All filing fees, and recording
        or other similar taxes, and all charges for title insurance premiums shall
        be
        paid by Acquiror. Acquiror shall pay all franchise license transfer fees,
        if
        any, in carrying out the transactions contemplated hereunder. Acquiror shall
        pay
        all fees and costs incurred in connection with the assumption of the Existing
        Financing.


      
        
          
          

        

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

       

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

       

       (b)    Real
        estate and personal property taxes.

       

       (c)    Amounts
        under the Operating Agreements. 

       

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

       

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

       

       (f)    Value
        of
        fuel stored on the Property at the price paid for such fuel by the Contributor,
        including any taxes.

       

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

       

      The
        Tray
        Ledger shall be retained by the Contributor. The Contributor shall be required
        to pay all sales taxes and similar impositions currently up to the Closing
        Date.

       

      Acquiror
        shall not be obligated to collect any accounts receivable or revenues accrued
        prior to the Closing Date for Contributor, but if Acquiror collects same,
        such
        amounts will be promptly remitted to Contributor in the form
        received.

       

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

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

      The
        certificates evidencing the Contributor’s ownership of the Interests will be
        dated as of the Closing Date.

       

      ARTICLE
        VII

      


      CONDEMNATION;
        RISK OF LOSS

      


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

      


      7.2    Risk
        of Loss.
        The
        risk of any loss or damage to the Property prior to the recordation of the
        Deed
        shall remain upon Contributor. If any such loss or damage to more than ten
        percent (10%) of the value of the Improvements occurs prior to Closing or
        any
        such loss or damage is uninsured or underinsured, the Acquiror shall have
        the
        right to terminate this Agreement pursuant to Section 8.3.
        If the
        Acquiror elects not to terminate this Agreement, all insurance proceeds and
        rights to proceeds arising out of such loss or damage shall be paid or assigned,
        as applicable, to the Acquiror at Closing.

       

      ARTICLE
        VIII

      


      LIABILITY
        OF ACQUIROR; INDEMNIFICATION BY CONTRIBUTOR;

      TERMINATION
        RIGHTS

      


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

      


      8.2    Indemnification
        by Contributor.
        The
        Contributor hereby indemnifies and holds the Acquiror harmless from and against
        any and all suits, actions, claims, costs, penalties, damages, losses,
        liabilities and expenses, subject to Section
        9.11
        that may
        at any time be incurred by the Acquiror, whether before or after Closing,
        (i) as
        a result of any breach by the Contributor of any of his representations,
        warranties, covenants or obligations set forth herein or in any other document
        delivered by the Contributor pursuant hereto, (ii) relating to any suits,
        litigation or actions brought against any Contributor or the LLC prior to
        the
        Closing Date, (iii) in connection with any and all liabilities and obligations
        of the LLC occurring, accruing or arising prior to the Closing Date, and/or
        (iv)
        as a result of or in connection with the use or operation of the Property
        prior
        to the Closing Date.


      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

      


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

      


      8.4     Termination
        by Contributor.
        If,
        prior to Closing, the Acquiror defaults in performing any of its obligations
        under this Agreement, and the Acquiror fails to cure any such default within
        five (5) business days after notice thereof from the Contributor, then the
        Contributor’s sole remedy for such default shall be to terminate this Agreement.


       

      ARTICLE
        IX

      


      MISCELLANEOUS
        PROVISIONS

      


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

      


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

      


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

      


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

      


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


      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

      


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

      


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

      


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

      


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

       

      If
        to
        the Contributor: c/o
        Hersha Group

      148
        Sheraton Drive, Box A

      New
        Cumberland, PA 17070

      Phone:
        (717) 770-2405

      Fax:
        (717) 774-7383

      


      
        	 	
                With
                  a copy to:

              	
                Mayur
                  Patel, Esquire

              


      

      c/o
        Hersha Group

      148
        Sheraton Drive, Box A

      New
        Cumberland, PA 17070

      Phone:
        (717) 770-2405

      Fax:
        (717) 774-7383


      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

      


      
        	 	
                If
                  to the Acquiror:

              	
                Hersha
                  Hospitality Limited Partnership

              


      

      148
        Sheraton Drive, Box A

      New
        Cumberland, PA 17070

      Phone:
        (717) 770-2405

      Fax:
        (717) 774-7383

      Attn:
        Ashish R. Parikh

      


      
        	 	
                With
                  a copy to:

              	
                Lok
                  Mohapatra, Esquire

              


      

      Shah
        & Byler, LLP

      Penn
        Mutual Towers

      510
        Walnut Street, 9th
        floor

      Philadelphia,
        PA 19106

      Phone:
        (215) 238-1045

      Fax:
        (267) 238-1874

       

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

      


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

      


      9.11    Survival.
        All of
        the representations, warranties, covenants and agreements of the Contributor
        and
        the Acquiror made in, or pursuant to, this Agreement shall survive for a
        period
        of twenty-four (24) months following Closing and shall not merge into the
        Deed
        or any other document or instrument executed and delivered in connection
        herewith, except for the representations and warranties set forth in Sections
        3.4, 3.7 and 3.9, which shall survive for periods coterminous with applicable
        statutes of limitations.

      


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

      


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

      


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


      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

      


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

       

      [Signature
        Pages Follow]


      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      


      


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

      


      
        	 	
                CONTRIBUTOR:

              	 
	 	 	 	 
	 	
                Shanti
                  III Associates,
                  a
                  Pennsylvania limited partnership 

              	 
	 	 	 	 
	 	 	 	 
	 	
                By:   
                  

              	
                 

              	 
	
                 

              	 	
                KD
                  Patel, Manager

              	 
	 	 	 	 
	 	
                Kunj
                  Associates,
                  a
                  Pennsylvania limited partnership 

              	 
	 	 	 	 
	 	 	 	 
	 	
                By:

              	
                 

              	 
	
                 

              	 	
                Kiran
                  P. Patel, Manager

              	 
	 	 	 	 
	 	
                Devi
                  Associates,
                  a
                  Pennsylvania limited partnership 

              	 
	 	 	 	 
	 	 	 	 
	 	
                By:

              	
                 

              	 
	
                 

              	 	
                Bharat
                  C. Mehta, Manager

              	 
	 	 	 	 
	 	
                Shree
                  Associates,
                  a
                  Pennsylvania limited partnership

              	 
	 	 	 	 
	 	 	 	 
	 	
                By:

              	
                 

              	 
	
                 

              	 	
                Hasu
                  P. Shah, Manager

              	 
	 	 	 	 
	 	 	 	 
	 	
                 

              	 
	 	
                David
                  L. Desfor 

              	 
	 	 	 	 
	 	 	 	 
	 	
                 

              	 
	 	
                Ashish
                  R. Parikh 

              	 
	 	 	 	 
	 	 	 	 
	 	
                 

              	 
	 	
                Sal
                  Shahriar 

              	 


      

       

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

       

      
        	 	
                The
                  Hasu and Hersha Shah 2004 Trust FBO Neil H. Shah 

              	 
	 	 	 	 
	 	 	 	 
	 	
                By:   
                  

              	
                 

              	 
	
                 

              	 	
                Neil
                  H. Shah, Trustee

              	 
	 	 	 	 
	 	 	 	 
	 	
                By:

              	
                 

              	 
	
                 

              	 	
                Jatin
                  Desai, Trustee

              	 
	 	 	 	 
	 	
                The
                  Hasu and Hersha Shah 2004 Trust FBO Jay H. Shah

              	 
	 	 	 	 
	 	 	 	 
	 	
                By:

              	
                 

              	 
	
                 

              	 	
                Jay
                  H. Shah, Trustee

              	 
	 	 	 	 
	 	 	 	 
	 	
                By:

              	
                 

              	 
	
                 

              	 	
                Jatin
                  Desai, Trustee

              	 


      

       

      
        	 	
                ACQUIROR:

              	 
	 	 	 	 	 
	 	
                Hersha
                  Hospitality Limited Partnership,
                  a
                  Virginia limited partnership

              	 
	 	 	 	 	 
	 	
                By:   
                  

              	
                Hersha
                  Hospitality Trust, a Maryland business trust, its sole general
                  partner

              	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
                By:   
                  

              	 	 
	 	 	 	
                Ashish
                  R. Parikh, CFO

              	 
	 	 	 	 	 
	 	
                LLC:

              	 
	 	 	 	 	 
	 	
                Metro
                  JFK Associates, LLC,
                  a
                  New York limited liability company

              	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	
                By:

              	
                 

              	 
	
                 

              	 	
                Hasu
                  P. Shah, Manager

              	 


      


      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      


      EXHIBIT
        A

      


      Legal
        Description of Land

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      EXHIBIT
        B

      


      Employment
        Agreements

      


      NONE


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      EXHIBIT
        C

      


      Insurance
        Policies



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      EXHIBIT
        D

      


      Leases

      


      Ground
        Lease with Star Canyon LLC



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      EXHIBIT
        E

      


      Operating
        Agreements



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      EXHIBIT
        F

       

      Articles
        of Organization of LLC


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      EXHIBIT
        G

       

      LLC
        Operating Agreement



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      EXHIBIT
        H

      


      Warranties
        and Guaranties



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      EXHIBIT
        I

      


      Litigation
        Schedule

       

      NONE


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      EXHIBIT
        J

       

      Form
        of Joinder



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      JOINDER
        AGREEMENT

      


      THIS
        JOINDER AGREEMENT (the “Agreement”), is dated as of January __, 2006, by and
        among __________ ( “Limited Partner”) and Hersha Hospitality Limited
        Partnership, a Virginia limited partnership (“HHLP”) and Hersha Hospitality
        Trust, a Maryland real estate investment trust (“Hersha”). Capitalized terms
        used but not otherwise defined herein shall have the meanings assigned to
        them
        in the Partnership Agreement (as defined below).

      


      WHEREAS,
        the affairs of HHLP are governed by the terms of that certain Amended and
        Restated Agreement of Limited Partnership of Hersha Hospitality Limited
        Partnership, dated January 26, 1999, as amended, by and between Hersha and
        the
        limited partners set forth on Exhibit
        A
        attached
        thereto (the “Partnership Agreement”);
        and

      


      WHEREAS,
        pursuant to that certain Contribution Agreement (the “Contribution Agreement”),
        dated January __, 2006, by and among Shanti III Associates, a Pennsylvania
        limited partnership, Kunj Associates, a Pennsylvania limited partnership,
        Devi
        Associates, a Pennsylvania limited partnership, Shree Associates, a Pennsylvania
        limited partnership, David L. Desfor , Ashish R. Parikh , Sal Shahriar, The
        Hasu
        and Hersha Shah 2004 Trust FBO Neil H. Shah,The Hasu and Hersha Shah 2004
        Trust
        FBO Jay H. Shah and HHLP, Limited Partner is acquiring units representing
        ownership of HHLP (the “Units”) and wishes to be admitted as a limited partner
        of HHLP.

      


      NOW
        THEREFORE, in consideration of the foregoing and of the representations,
        warranties and agreements set forth herein, the parties agree as
        follows:

      


      1.    Limited
        Partner by its signature below becomes a party under the Partnership Agreement
        with the same force and effect as if originally named therein as a limited
        partner, and Limited Partner hereby (a) agrees to be bound by all of the
        terms
        and provisions of the Partnership Agreement applicable to it as a limited
        partner of HHLP and (b) represents and warrants that the representations
        and
        warranties made by a limited partner thereunder are true and correct with
        respect to Limited Partner on as of the date hereof. Limited Partner agrees
        to
        execute any other documents or instruments as Hersha may require in order
        to
        effect the admission of Limited Partner as a limited partner to
        HHLP.

      


      2.    To
        the
        extent required, Limited Partner agrees to sign an amended Certificate
        evidencing the admission of Limited Partner as a limited partner and filed
        for
        record in accordance with the Act.

      


      3.    Limited
        Partner agrees that it will not sell, assign or otherwise transfer the Units
        or
        any fraction thereof, whether voluntarily or by operation of law or at a
        judicial sale or otherwise, to any Person who does not make the representations
        and warranties to Hersha set forth in Section 9.01(a) in the Partnership
        Agreement and similarly agrees not to sell, assign or transfer the Units
        to any
        Person who does not similarly represent, warrant and agree.

      


      4.    Limited
        Partner hereby irrevocably appoints Hersha its true and lawful attorney-in-fact,
        who may act for each limited partner of HHLP and in its name, place and stead,
        and for its use and benefit, to sign, acknowledge, swear to, deliver, file
        or
        record, at the appropriate public offices, any and all documents, certificates
        and instruments as may be deemed necessary or desirable by the Hersha to
        carry
        out fully the provisions of the Partnership Agreement and the Virginia Revised
        Uniform Limited Partnership Act in accordance with their terms, which power
        of
        attorney is coupled with an interest and shall survive the death, dissolution
        or
        legal incapacity of Limited Partner, or the transfer by Limited Partner of
        any
        part or all of its interest in HHLP.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      5.    At
        the
        request of Hersha, Limited Partner agrees to pay all reasonable legal fees
        and
        other expenses of HHLP and Hersha and filing and publication costs in connection
        with Limited Partner’s admission as a limited Partner.

      


      6.    Hersha,
        as general partner to HHLP, hereby consents to the admission of Limited Partner
        as a limited partner of HHLP.

      


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

       

      
        	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	
                By:

              	
                 

              	 
	 	 	
                Name:

              	 
	 	 	
                Title:

              	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	
                HERSHA
                  HOSPITALITY LIMITED PARTNERSHIP

              	 
	 	
                By:
                  

              	
                Hersha
                  Hospitality Trust, its General Partner

              	 
	 	 	 	 
	 	
                By:   
                  

              	
                 

              	 
	 	 	
                Name:
                  

              	 
	 	 	
                Title:
                  

              	 
	 	 	 	 
	 	
                HERSHA
                  HOSPITALITY TRUST

              	 
	 	 	 	 
	 	 	 	 
	 	
                By:
                  

              	
                 

              	 
	 	 	 	 
	 	
                Name:
                  

              	 	 
	 	
                Title:

              	 	 


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      EXHIBIT
        K

       

      Acquiror's
        Limited Partnership Agreement