Exhibit 10.1


    
      
        

      

    

    Exhibit
      10.1

     

    PURCHASE
      AND SALE AGREEMENT

    


    BETWEEN

    


    CLAREMONT
      DC HOTEL LLC

    CLAREMONT
      DC HOTEL II LLC

    (individually
      a “Claremont Entity” and collectively the “Claremont
      Entities”)

    APPLE
      HOTEL, LLC

    APPLE
      HOTEL HOLDINGS, LLC 

    APPLE
      HOTEL INVESTMENTS, LLC

    (collectively
      the “Apple Entities”)

    


    THE
      CLAREMONT ENTITIES AND THE APPLE ENTITIES

    ARE
      COLLECTIVELY REFERRED TO AS

    AS
      SELLERS, AND INDIVIDUALLY AS SELLER

    


    AND

    


    HERSHA
      HOSPITALITY TRUST

    


    AS
      PURCHASER

    


    


    


    


    August
      11, 2005

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    PURCHASE
      AND SALE
      AGREEMENT


     

    THIS
      PURCHASE AND SALE AGREEMENT (this “Agreement”)
      is
      executed this 11th
      day of
August,
      2005 by
CLAREMONT
      DC HOTEL LLC, CLAREMONT DC HOTEL II LLC, APPLE HOTEL, LLC, APPLE HOTEL HOLDINGS,
      LLC AND APPLE HOTEL INVESTMENTS, LLC,
      (collectively the “Sellers”
and
      individually a “Seller”),
      and
HERSHA
      HOSPITALITY TRUST
      (“Purchaser”).

    


    ARTICLE
      I

    Sale

    


    Subject
      to the terms and conditions set forth in this Agreement, Sellers agree to sell
      and convey to Purchaser, and Purchaser agrees to buy and take from
      Sellers:

    


    1.1 
        Property.
      All of
      Sellers’ right, title and interest in and to that certain parcel of land more
      particularly described in Exhibit
      A
      attached
      hereto (collectively, the “Land”),
      located at 815 14th
      Street,
      N.W., Washington, DC, including all right, title and interest of Sellers, if
      any, in and to the land lying in the bed of any street or highway in front
      of or
      adjoining the Land to the center line thereof, all water and mineral rights,
      development rights and all easements, rights and other interests appurtenant
      thereto, and all buildings, structures, facilities and improvements located
      on
      the Land (the “Improvements”).
      The
      Land and the Improvements are sometimes referred to hereinafter together as
      the
“Hotel.”
      

     

    1.2 
        Personal
      Property.
      The
      following personalty to the extent owned by Sellers (collectively the
“Personal
      Property”)
      and
      used or located at the Hotel, including: (a) all furniture, furnishings,
      fixtures, vehicles, rugs, mats, carpeting, appliances, devices, engines,
      telephone and other communications equipment, televisions and other video
      equipment, plumbing fixtures and other equipment located in the Hotel (the
      “FF&E”),
      (b)
      all items included within the definition of “Property and Equipment” under the
      Uniform System of Accounts for the Lodging Industry, Ninth Revised Edition,
      as
      published by the Hotel Association of New York City, Inc. (the “Uniform
      System of Accounts”)
      and
      used in the operation of the Hotel, including, without limitation, linen, china,
      glassware, tableware, uniforms and similar items, subject to such depletion
      prior to the Closing Date as shall occur in the ordinary course of business
      (the
“Fixed
      Asset Supplies”);
      (c)
      all “Inventories” as defined in the Uniform System of Accounts and used in the
      operation of the Hotel, such as provisions in storerooms, refrigerators,
      pantries, and kitchens, other merchandise intended for sale or resale, fuel,
      mechanical supplies, stationery, guest supplies, maintenance and housekeeping
      supplies and other expensed supplies and similar items (the “Inventories”),
      provided,
      however,
      that to
      the extent that any applicable law prohibits the transfer of alcoholic beverages
      from the Sellers to Purchaser, such beverages shall not be considered a part
      of
      Inventories and if same can be included in Inventories, Purchaser shall pay
      to
      Sellers at Closing an amount equal to Sellers’ cost of such alcoholic beverages;
      (d) to the extent in Sellers’ possession or control, all surveys, architectural,
      consulting and engineering blueprints, plans and specifications and reports,
      if
      any, related to the Hotel; (e) to the extent in Sellers’ possession or control,
      all intangible personal property rights constituting the goodwill of Sellers
      related to the Hotel; (f) all transferrable licenses and permits related to
      the
      operation of the Hotel; (g) all advance reservations and bookings and advance
      deposits made in respect thereof; (h) all rights to the name “Hilton Garden Inn”
subject to the rights of the Franchisor, defined below, all other trade names,
      trademarks, service marks, logos and other forms of identification of the Hotel;
      and (i) to the extent in Sellers’ possession or control, all written guaranties
      and warranties with respect to the Improvements and FF&E. 

     

    
      
        
        

      

      
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      1.3  
         Contracts
        and Leases.
        All
        rights of Sellers under all written service, maintenance, licensing, concession,
        and other contracts or agreements related to the maintenance, ownership,
        use,
        possession or operation of the Personal Property or the Hotel, other than
        the
        Management Agreement and Franchise Agreement (the “Contracts”),
        all
        written leases of personal property located at, or used in the operation
        of, the
        Hotel (the
        “Equipment
        Leases”)
        to
        which Sellers or Manager is a party and, if any, all leases, subleases and
        other
        occupancy agreements, which provide for the use or occupancy of space or
        facilities on or relating to the Hotel (the “Space
        Leases”)
        (the
        Hotel, Personal Property, Contracts, Equipment Leases and any such Space
        Leases
        are collectively, the “Property”).

       

    

    ARTICLE
      II

    Purchase
      Price

    


    2.1  
       Purchase
      Price.
      The
      purchase price for the Property is Eighty Five Million One Hundred
      and
      00/100 ($85,100,000.00)
      Dollars
      (the “Purchase
      Price”),
      subject to adjustments as described in this Agreement, plus
      the
      Earnout Price (defined below). The
      Purchase
      Price
      shall be
      paid on the Closing Date by Purchaser by delivery by Purchaser to the Escrow
      Agent on the Closing Date of the Closing Date Payment by wire transfer of
      immediately available funds, of which the Deposit shall be deemed a part, for
      disbursement to Sellers upon delivery to Purchaser of the Deed and the Title
      Company’s irrevocable commitment to issue to Purchaser a title policy in the
      form attached hereto as Exhibit
      B.
      In the
      event Closing is consummated, the Deposit shall be credited against the Purchase
      Price. 

    


    2.2  
       Promissory
      Note.
      In
      addition to the Purchase Price, the
      Purchaser shall deliver to the
      Sellers at Closing a promissory note (the “Note”)
      made
      by the Purchaser payable to the Sellers in the principal amount of Two Million
      and 00/100 ($2,000,000.00) Dollars. Notwithstanding the principal balance of
      the
      Note, the amount due under the Note shall be the Earnout Price (defined below),
      plus interest, which Earnout Price, exclusive of interest, shall not exceed
      Two
      Million and 00/100 ($2,000,000.00) Dollars. The “Earnout
      Price”
shall
      be that amount equal to the Hotel’s most recent actual Trailing Twelve Months
      NOI (defined below), divided by a capitalization rate of eight (8%) percent,
      less the Purchase Price. In no event will the Earnout Price be less than Zero
      ($0.00) Dollars. The Note shall be due on the date of demand by the Sellers
      (“Demand”)
      and
      payment of the Note shall be made in full from the Sellers to the Buyer within
      five (5) days of the determination of the Trailing Twelve Months NOI (the
“Due
      Date”).
      Demand shall be made by notice from a Claremont entity to Purchaser; provided,
      however, if no Demand is made by Seller prior to the Second Anniversary of
      the
      Closing Date (The “Maturity
      Date”),
      Demand
      shall be deemed to have been made on the Maturity Date. The “Trailing
      Twelve Months NOI”
is
      defined as the NOI for the last twelve (12) complete calendar months immediately
      preceding Demand. For purposes of this Section 2.2, “NOI”
is
      defined as all Revenue (defined below) collected from the Hotel less Expenses
      (defined below). “Revenue”
shall
      mean an amount equal to all amounts collected from the Hotel, including accounts
      receivable from credit card companies. “Expenses”
shall
      mean actual and customary operating expenses of the Hotel paid for in the
      previous twelve (12) month period prior to Demand. For purposes of determining
      Expenses, replacement reserves shall be the lesser of: (i) the replacement
      reserves required by the first mortgage holder on the Hotel; (ii) the actual
      replacement reserves for the trailing twelve months preceding Demand or (iii)
      four (4.0%) percent, and management fees shall be the lesser of: (i) the actual
      management fees charged; (ii) the management fees permitted to be charged by
      the
      first mortgage holder on the Hotel; or (iii) three (3.0%) percent. The Note
      shall be non-interest bearing unless payment is not made on the Due Date, in
      which event interest shall be due and payable on the Earnout Price at the annual
      rate of twelve (12%) percent calculated from the Closing Date to the date of
      payment. The
      Note
      shall contain the Purchaser’s obligation to deliver to the Sellers, on a monthly
      basis, copies of the monthly reports for the Hotel provided to Hilton Inns,
      Inc.
      or any replacement franchisor.

     

    
      
        
        

      

      
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    2.3  
       Allocation
      of Purchase Price.
      The
      Purchase Price shall be allocated among the Hotel and various items of Personal
      Property in accordance with the schedule of allocations attached hereto as
      Exhibit
      D,
      and
      each party agrees to file federal, state and local tax returns consistent with
      such allocations.

     

    2.4    Purchaser’s
      Deposit.
      On the
      Contract Date, Purchaser shall deliver to Sellers One
      Million
      and 00/100 ($1,000,000.00)
      Dollars
      which shall be credited to the Purchase Price at Closing.
      On or
      before the last day of the Feasibiity Period, Purchaser shall (unless the
      Agreement is terminated by Purchaser on or before that date), deliver to
First
      American Title Insurance Company, as escrow agent (the “Escrow
      Agent”)
      Four
      Million and 00/100 ($4,000,000.00) Dollars (which, along with any interest
      earned thereon, is hereinafter referred to as the “Purchaser’s
      Deposit”).
      If
      Purchaser does not deliver the Purchaser’s
      Deposit to the Escrow Agent prior
      to
      the last
      day of the Feasibility Period, Seller
      shall
      have the right to terminate this Agreement by giving written notice to
      Purchaser, and neither party shall then have any further liability to the other
      under this Agreement except as otherwise specifically provided herein. The
      Escrow Agent shall hold the Purchaser’s Deposit in accordance with escrow
      instructions executed by Sellers, Purchaser and the Escrow Agent (the
“Escrow
      Instructions”)
      substantially in the form attached hereto as Exhibit
      E.

     

    2.5    Seller’s
      Deposit. On
      the
      Contract Date, Sellers shall deliver to the Escrow Agent Five Hundred Thousand
      and 00/100 ($500,000.00) Dollars (“Seller’s
      Deposit).”
The
      Seller’s Deposit shall be used to secure the obligation of the Sellers under
      this Agreement to deliver the documents described in Article VII. The Escrow
      Agent shall hold the Seller’s Deposit in accordance with the Escrow
      Instructions.

     

    
      
        
        

      

      
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    ARTICLE
      III


    Sellers’
      Representations, Warranties and Covenants

    


    In
      order
      to induce Purchaser to enter into this Agreement and to consummate the
      transactions contemplated hereby, each Seller represents and warrants to, and
      covenants with, Purchaser as follows:

    


    3.1    Good
      Standing.
      Each
      Seller is a limited liability company duly organized, validly existing and
      in
      good standing under the laws of the applicable jurisdiction referenced above,
      is
      authorized to conduct the business in which it is now engaged, and is duly
      qualified and in good standing in all states where the ownership of its assets
      or the conduct of its business makes such qualification necessary. 

     

    3.2    Title.
      Each
      Seller has good and marketable fee simple title to its respective fee interest
      in the Hotel, subject only to Permitted Exceptions. 

     

    3.3    Due
      Authorization.
      The
      execution, delivery and performance of this Agreement and the consummation
      of
      the transactions contemplated hereby have been duly and validly authorized
      by
      all requisite action of each Seller, none of which actions have been modified
      or
      rescinded, and all of which actions are in full force and effect. This Agreement
      constitutes a valid and binding obligation of Sellers, enforceable against
      Sellers in accordance with its terms.

     

    3.4    No
      Violations or Defaults.
      The
      execution, delivery and performance of this Agreement and the consummation
      by
      Sellers of the transactions contemplated hereby will not (a) violate any law
      or
      any order of any court or governmental authority with proper jurisdiction
      binding against Sellers; (b) result in a breach or default under any contract
      or
      other binding commitment of Sellers or any provision of the organizational
      documents of Sellers; or (c) except for approvals of governmental authorities,
      require any consent or approval or vote that has not been taken or given, or
      as
      of the Closing Date shall not have been taken or given.

     

    3.5    Litigation.
      As
      of the
      date hereof, except as set forth on Exhibit
      F,
      there
      are no actions, suits, arbitrations, governmental investigations or other
      proceedings pending or to any Seller’s knowledge threatened against Sellers or
      affecting the Property before any court or governmental authority. 

     

    3.6    Condemnation
      Actions.
      There
      are
      no pending condemnation actions or special assessments of any nature or to
      Sellers’ knowledge threatened with respect to the Property or any part thereof.


     

    3.7    Contracts.
      All
      Contracts, other than the Management Agreement, the Franchise Agreement, the
      Equipment Leases and the Space Leases (if any), are listed on Exhibit
      G
      attached
      hereto. The Sellers have made or will make available to Purchaser true and
      complete copies of all such Contracts and all such Contracts are in full force
      and effect. To Sellers’ knowledge, there are no material defaults by any party
      to the Contracts.

     

    
      
        
        

      

      
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    3.8    Equipment
      Leases.
      All
      Equipment Leases to which Sellers or Manager is a party, and all amendments
      thereto, are listed on Exhibit
      H
      attached
      hereto. To Sellers’ knowledge, there are no material defaults by any party to
      the Equipment Leases. The Sellers have made or will make available to Purchaser
      true and complete copies of all such Equipment Leases and all such Equipment
      Leases are in full force and effect.

     

    3.9    Management
      and Franchise Agreements.
      There
      are
      no existing management contracts or franchise agreements relating to the
      Property other than (i) that certain Management Agreement dated April 30, 2002
      (the “Management
      Agreement”)
      with
      Urgo Hotels, L.P. (the “Manager”),
      and
      (ii) that certain Franchise Agreement dated September 16, 1998 (the
“Franchise
      Agreement”)
      with
      Hilton Inns, Inc. (the “Franchisor”).
      Sellers have made or will make available to Purchaser true and complete copies
      of the Management Agreement and Franchise Agreement. The Management Agreement
      and Franchise Agreement are in full force and effect and to Sellers’ knowledge
      there are no material defaults by any of the respective parties to the Franchise
      Agreement other than a technical default regarding signage at the Property
      which
      has been disclosed to Purchaser (the “Existing
      Sign Default”).
      

     

    
      
        3.10    Space
          Leases.
          There
          are no Space Leases to which the Property is subject. 

      

    

     

    3.11    Permits.
      To
      Sellers’ best knowledge all licenses, certificates of occupancy, permits and
      approvals required to be issued by any governmental authority or any third
      party
      and used in or necessary to the operation of the Hotel (the “Permits”)
      have
      been obtained and are in full force and effect. Each such Permit is listed
      on
Exhibit
      I
      attached
      hereto, and Sellers have made or will make available to Purchaser true and
      complete copies of each such Permit. The Sellers have no knowledge of any
      written notice regarding any violation of the Permits or of any law, regulation
      or ordinance applicable to the Permits which has not been cured. 

     

    3.12    Environmental
      Matters.
      Except
      as disclosed on Exhibit
      J
      or in
      the environmental reports (and all modifications thereto) listed on Exhibit
      J (the
      “Environmental Reports”),
      the
      Sellers have not received any written notice from any governmental or regulatory
      authority, and the Sellers otherwise have no knowledge of the presence or
      release of any substance that is regulated under any Environmental Laws as
      a
      pollutant, contaminant or toxic, radioactive or otherwise hazardous substance,
      including petroleum, its derivatives or by-products and other hydrocarbons
      (collectively and individually, “Hazardous
      Substances”)
      that
      would cause the Hotel to be in violation of any applicable Environmental Laws
      and that remains uncured. For the purposes of this Section, “Environmental
      Laws”
means
      any and all federal, state, county and local statutes, laws, regulations and
      rules in effect on the Contract Date relating to the protection of the
      environment or to the use, transportation and disposal of Hazardous Substances.
      

     

    3.13    Financial
      Information.
      Attached
      as Exhibit
      K
      are
      operating statements, including revenue and expenses and budgeted and actual
      capital expenditures for the Hotel for the fiscal periods beginning January
      1,
      2002 and ending December 31, 2004, and the period beginning January 1, 2005
      and
      ending June 30, 2005 (the “Statements”).
      The
      Statements are true and correct in all material respects.

     

    
      
        
        

      

      
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    3.14    Labor
      and Employment Matters.
      All
      employees at the Hotel are employees of the Manager and not Sellers. There
      are
      no agreements to which the Sellers are a party to relating to any pension plan,
      employee benefit plan, labor or collective bargaining agreement affecting the
      Hotel. The Sellers have not received any written notice from any labor union
      or
      group of employees that such union or group represents or believes or claims
      it
      represents or intends to represent any of the employees of Sellers nor have
      they
      received any notice of any claim of unfair labor practices. 

     

    3.15    Insurance.
      The
      Sellers have and shall maintain through the Closing Date insurance policies
      equivalent in all material respects to those currently maintained by
      Sellers.

     

    3.16    Purchase
      Rights.
      There
      are no purchase contracts, options or other agreements of any kind, whereby
      any
      person or entity other than Purchaser has or will have acquired or has or will
      have any right to acquire title to all or any portion of the Hotel.

     

    3.17    Bankruptcy.
      The
      Sellers have not filed or taken any action to file a voluntary petition, case
      or
      proceeding under any section or chapter of the Title 11 of the United States
      Code, as amended (the "Bankruptcy
      Code"),
      or
      under any similar law or statute of the United States or any state thereof,
      relating to bankruptcy, insolvency, reorganization, winding up or composition
      or
      adjustment of its debts; and no such petition, case or proceeding has been
      filed
      against it which has not been dismissed, vacated or stayed on appeal; and they
      have not been adjudicated as a bankrupt or insolvent or consented to, nor filed
      an answer admitting or failing reasonably to contest an allegation of bankruptcy
      or insolvency. 

     

    3.18    Knowledge.
      All
      references herein to the knowledge of either Seller are qualified to the extent
      of the actual knowledge of John Rish, the general manager of the Hotel, and
      Richard Riccio, the Regional Manager for the Manager. The Sellers disclaim
      any
      obligation whatsoever to make any further inquiry and shall not be imputed
      to
      have knowledge of any other person other than Messrs. Rish and
      Riccio.

     

    3.19    Effect.
      The
      representations and warranties with respect to the Claremont Entities relate
      only to those entities
      and
      recourse for a breach of those warranties shall
      be
      to the Claremont Entities only. Likewise, the representations and warranties
      with respect to the Apple Entities relate only to those entities and recourse
      for a breach of those warranties shall be to the Apple Entities only.
      Representations related to the Property shall be deemed made by all of the
      Sellers.

     

    ARTICLE
      IV

    Purchaser’s
      Representations, Warranties and Covenants

    


    In
      order
      to induce the Sellers to enter into this Agreement and to consummate the
      transactions contemplated hereby, Purchaser represents and warrants to, and
      covenants with, Seller as follows:

    


    4.1    Good
      Standing.
      Purchaser is a business trust established under the laws of the State of
      Maryland. 

     

    
      
        
        

      

      
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    4.2    Due
      Authorization.
      The
      execution, delivery and performance of this Agreement and the consummation
      of
      the transactions contemplated hereby have been duly and validly authorized
      by
      all requisite actions of Purchaser (none of which actions have been modified
      or
      rescinded, and all of which actions are in full force and effect). This
      Agreement constitutes a valid and binding obligation of Purchaser, enforceable
      against Purchaser in accordance with its terms. 

     

    4.3    No
      Violations or Defaults.
      The
      execution, delivery and performance of this Agreement and the consummation
      by
      Purchaser of the transactions contemplated hereby will not (a) violate any
      law
      or any order of any court or governmental authority with proper jurisdiction;
      (b) result in a breach or default under any contract or other binding commitment
      of Purchaser or any provision of the organizational documents of Purchaser;
      or
      (c) require any consent or approval or vote that has not been taken or given,
      or
      as of the Closing Date shall not have been taken or given. 

     

    4.4    Litigation. As
      of the
      date hereof, there are no actions, suits, arbitrations, governmental
      investigations or other proceedings pending or, to the knowledge of Purchaser,
      threatened in writing against Purchaser before any court or governmental
      authority, an adverse determination of which might adversely affect (a) the
      financial condition or operations of Purchaser or (b) Purchaser’s ability to
      enter into or perform this Agreement.

     

    ARTICLE
      V

    Closing

    


    5.1    Closing.
      The
      consummation of the purchase and sale of the Property as contemplated by this
      Agreement (the “Closing”)
      shall
      take place on the first to occur of (i) September 16, 2005 or (ii) one business
      day after receipt of the Assignment of Franchise Agreement, but no earlier
      than
September
      2, 2005 (the “Closing
      Date”),
      at
      the offices of Purchaser’s attorney or through the Escrow Agent, or at such
      alternative location as may be mutually agreed upon by Sellers and Purchaser.
      All of Sellers’ and Purchaser’s deliveries, the cash payment of the Closing Date
      Payment and sufficient additional cash necessary for the parties to pay the
      costs contemplated by Section 5.2 shall be delivered in escrow to the Escrow
      Agent. 

     

    5.2    Costs.
      The
      Sellers shall: (i) pay fifty (50%) percent of all fees of the Escrow Agent
      in
      connection with the Escrow Instructions; (ii) one hundred (100%) percent of
      the
      premium for the owner’s and lender’s title insurance policies (without
      endorsements other than any endorsements requested by Sellers); and (iii) fifty
      (50%) percent of all costs
      in
      connection with updating the existing survey of the Hotel..
      Purchaser shall pay: (i) all costs associated with the transfer of the Franchise
      Agreement, including any so called “property improvement plan” or increase or
      change in franchise fees required by Hilton; (ii) all
      state
      and county
      transfer
      and recordation taxes, excise taxes or document stamps imposed on the Deed
      of
      conveyance or otherwise connected with the transfer of the Property
      (collectively “Transfer
      Fees”);
      (iii)
      all mortgage recordation taxes; (iv) fifty (50%) percent of all
      fees
      of the Escrow Agent in connection with the Escrow Instructions; (v) costs and
      premiums of all endorsements to the owners and lenders title insurance policies;
      (vi) fifty
      (50%) percent of
      all
      costs in connection with updating the existing survey for the Hotel; and (vii)
      all fees due the Manager as a result of the termination of the Management
      Agreement. Each
      party shall pay its own accountants and attorneys’ fees incurred in connection
      with the preparation, negotiation and execution of this Agreement and the
      consummation of the transactions contemplated hereby.

     

    
      
        
        

      

      
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    ARTICLE
      VI

    Actions
      Pending Closing; Feasibility Period

    


    
      
        6.1   
          Conduct
          of Business; Maintenance and Operation of Property.
          

      

    

     

    Between
      the Contract Date and the Closing Date, the Sellers shall continue to carry
      on
      the business of the Hotel as currently conducted; however, Sellers shall have
      no
      obligation to cure or correct the Existing Sign Default. 

     

    6.2    Title
      Insurance.
      (a)
      Attached hereto as Exhibit
      B are
      a
      title commitment and a pro forma (specimen) owner’s policy and lender’s policy
      of title insurance (the “Title
      Commitment”)
      relating to the Hotel from First American Title Insurance Company (the
“Title
      Company”),
      committing to insure Purchaser's good and marketable fee simple title to the
      Hotel at Closing in the amount of the Purchase Price. The policy issued at
      Closing shall show no liens, mortgages, deeds of trust, security interests,
      pledges, charges, options, encroachments, easements, covenants, leases,
      reservations or restrictions of any kind (the “Encumbrances”)
      other
      than (i) applicable zoning regulations and ordinances, (ii) liens for taxes,
      assessments and governmental charges not yet due and payable, (iii) liens for
      water and sewer service not yet due and payable (iv) other Permitted Exceptions.
      The Title Commitment and Survey, defined below, are hereafter referred to as
      the
      (“Title
      Documents”).
      

     

    In
      addition to the Equipment Leases, matters reported in or shown by the Title
      Documents (or any updates thereof) shall be deemed to be “Permitted Exceptions”.
      Sellers agree to cause to be deleted all mortgages (except to the extent any
      such mortgages will be assigned to Purchaser’s lender) and other monetary
      encumbrances, including mechanics liens. 

     

    6.3    Survey.
      Sellers
      have delivered to Purchaser its existing ALTA as-built survey of the Hotel.
      Sellers shall cause such survey to be certified to Purchaser, its lender and
      the
      Title Company (the "Survey").
      Purchaser acknowledges and agrees that no new survey of the Hotel shall be
      performed as a condition of this Agreement.

     

    6.4    Inspection;
      Feasibility Period.
      For the
      period prior to and including 6:00 p.m. EST of the close of business on August
      20, 2005 (the "Feasibility
      Period"):

    


    (a) Purchaser
      shall have the right, at its own risk, cost and expense to enter, or cause
      its
      agents or representatives to enter, upon the Hotel, accompanied by a Claremont
      Entity representative, with forty-eight hours prior notice to a Claremont
      Entity, for the purpose of making surveys or other tests, inspections,
      investigations and/or studies of all or any part of the Property. In addition,
      Purchaser may, at its own risk, cost and expense, conduct such architectural,
      environmental, economic and other studies of the Property as Purchaser may,
      in
      its sole discretion, deem desirable. Purchaser shall not make any physical
      alterations to the Property or any invasive tests. Purchaser shall conduct,
      and
      ensure that each of its agents, employees, contractors or representatives
      conducts, each such entry in a manner that does not unreasonably interfere
      with
      the guests or employees of the Hotel; and Purchaser shall indemnify and
      hold Sellers harmless from any and all claims, damages, demands, penalties,
      causes of action, liabilities, losses, costs or expenses (including reasonable
      attorneys’ fees and other charges) arising out of or in any way related to
      personal injury (including death), property damage, material disruptions of
      operations, nuisance or other claims asserted by any person or entity relating
      to the acts or omissions of Purchaser, or its agents, employees, contractors
      or
      representatives in the course of any such entry or inspection of the Hotel.
      The
      foregoing indemnity shall survive Closing or any termination of this Agreement.
      Purchaser shall have reasonable access to all documentation, agreements and
      other information in the possession of Sellers or Sellers’ agents related to the
      Property and shall have the right to make copies of same. If Purchaser elects
      to
      terminate this Agreement pursuant to Section 6.4(b), Purchaser agrees to supply
      Sellers with all copies of the results of any tests, studies or inspections
      of
      the Property performed by third parties for Purchaser hereunder (without
      representation or warranty by Purchaser) and to return to Sellers the copies
      of
      documentation, agreements, and other information which Sellers have given or
      made available to Purchaser. 

     

    
      
        
        

      

      
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    (b) If,
      at
      any time during the Feasibility Period, Purchaser gives a Claremont Entity
      written notification (the “Termination
      Notice”)
      that
      Purchaser elects not to consummate the purchase of the Property in accordance
      with the terms of this Agreement for any reason or no reason, this Agreement
      shall terminate, Purchaser shall return the copies of all documentation,
      agreements, and other information Sellers have given or made available to
      Purchaser and copies of all third-party reports Purchaser has obtained,
      whereupon the Deposit shall be returned to Purchaser and neither party shall
      have any further liability to the other under this Agreement except as otherwise
      specifically provided herein. In the event that the Termination Notice is not
      received by a Claremont Entity by the end of the Feasibility Period, Purchaser
      shall have been deemed to have elected to proceed hereunder, and this Agreement
      shall remain in full force and effect. 

    


    (c) Purchaser
      acknowledges and agrees that it has, prior to the date hereof, been afforded
      the
      opportunity to make such tests, inspections, investigations and/or studies
      of
      all or any part of the Property as Purchaser deemed necessary, including review
      of title to and survey of the Property, as well as architectural, environmental,
      and economic studies of the Property and is being given an additional period
      in
      accordance with subsection (a) above to conduct such additional inspections
      as
      it desires. Accordingly, the Sellers shall not be obligated to take any action
      or expend any money in respect to the Property for any purposes whatsoever
      whether before, during or after final closing. The Purchaser agrees to accept
      the Property in its existing "as is” condition.

     

    
      
        
        

      

      
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    ARTICLE
      VII

    Conditions
      Precedent to Purchaser’s Obligations at Closing

    


    It
      shall
      be a condition to Purchaser’s obligation to purchase the Property that each and
      every one of the following conditions shall have been satisfied as of the
      Closing Date (or waived by Purchaser).

    


    7.1    Representations
      and Warranties.
      The
      representations and warranties of each Seller shall be true and complete in
      all
      material respects.

     

    7.2    Covenants
      of Sellers.
      Sellers
      shall have performed and complied in all material respects with all material
      covenants and material conditions required by this Agreement to be performed
      or
      complied with at or prior to the Closing Date.

     

    7.3    Title.
      Purchaser shall be able to obtain a policy of title insurance in conformance
      with the Title Commitment, subject only to the Permitted Exceptions, upon
      payment of the premiums therefor and delivery of the documents specified in
      Article IX below.

     

    7.4    Failure
      of Condition.
      In the
      event of the failure of any condition precedent set forth in this Article 7,
      except a failure that results from the actions, inactions or change in the
      financial condition of the Purchaser or the failure of any of Purchaser's
      representations and warranties set forth herein to be true and complete in
      all
      material respects, Purchaser, at its sole election, may (i) terminate this
      Agreement (and receive a return of the Deposit), or (ii) waive the condition
      and
      proceed to Closing. In the event that any such condition is not satisfied and
      the transactions contemplated hereby are not consummated primarily as a result
      of the actions, inactions or change in the financial condition of the Purchaser
      or the failure of any of Purchaser's representations and warranties set forth
      herein to be true and complete in all material respects, then the Deposit shall
      be forfeited to the Sellers as full and complete liquidated damages. Upon any
      termination of this Agreement by Purchaser, Purchaser shall return the copies
      of
      all documentation, agreements, and other information Sellers have given or
      made
      available to Purchaser and copies of all third-party reports Purchaser has
      obtained, whereupon the Deposit shall be returned to Purchaser and neither
      party
      shall have any further liability to the other under this Agreement except as
      otherwise specifically provided herein. 

    


    7.5    Sellers’
      Deliveries.
      Sellers
      shall have delivered all of the other documents required from it pursuant to
      Article IX hereof.

     

    ARTICLE
      VIII

    Conditions
      Precedent to Sellers’ Obligations at Closing 

    


    It
      shall
      be a condition to Sellers’ obligations to sell the Property that each and every
      one of the following conditions shall have been satisfied as of the Closing
      Date
      (or waived by Sellers).

     

    8.1    Representations
      and Warranties.
      Each of
      Purchaser's representations and warranties shall be true and complete in all
      material respects and there shall be no material litigation affecting Purchaser
      that, if existing as of the date hereof, would have had to be disclosed under
      Section 4.4.

     

    
      
        
        

      

      
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    8.2    Purchaser
      Deliveries.
      Purchaser shall have delivered all of the other documents required from it
      pursuant to Article IX hereof with the exception of delivery of the Assignment
      of Franchise Agreement.

     

    8.3    Failure
      of Condition.
      In the
      event of the failure of any condition precedent set forth in this Article VIII,
      Sellers, at their sole election, may (i) terminate this Agreement and receive
      the Deposit hereunder or (ii) waive the condition and proceed to
      Closing.

    


    ARTICLE
      IX

    Closing
      Deliveries

    


    At
      Closing, the parties shall make the following deliveries:

    


    9.1    Deed.
      Each of
      the Sellers shall deliver warranty deeds substantially in the form set forth
      on
Exhibit
      L
      attached
      hereto (each a “Deed”
and
      collectively, the “Deeds”)),
      dated as of the Closing Date, conveying to Purchaser the respective fee simple
      interest of each Seller in the Hotel.

    


    9.2    Bill
      of Sale.
      Sellers
      and Purchaser shall each deliver two (2) duly executed counterparts (one for
      Sellers and for Purchaser) a bills of sale from each Seller and assignment
      and
      assumption of documents substantially in the form set forth on Exhibit
      M
      attached
      hereto (collectively, the “Bills
      of Sale”),
      dated
      as of the Closing Date, conveying to Purchaser (or an Affiliate of Purchaser)
      the Personal Property and assigning all of the applicable Permits, Contracts
      and
      Equipment Leases.

     

    9.3    FIRPTA
      Certificate.
      Sellers
      shall deliver a certificate, dated as of the Closing Date, to establish that
      no
      Seller is a foreign person for the purposes of the Foreign Investment in Real
      Property Tax Act. 

     

    9.4    Assignment
      of Franchise Agreement.
      Purchaser shall have received an assignment of the Franchise Agreement, or
      a new
      franchise agreement with Franchisor (the “Assignment
      of Franchise Agreement”).

     

    9.6    Possession;
      Books and Records, Keys. Sellers
      shall deliver possession of the Property to Purchaser, together with all books
      and records in Sellers’ possession, in accordance with and subject to any
      privacy laws or regulations, necessary or desirable for the operation of the
      Hotel and all keys, including, without limitation, keys for all security
      systems, rooms and offices. 

     

    9.7    Other
      Documents.
      Sellers
      and Purchaser shall deliver such other documents and instruments as may be
      reasonably requested by Sellers, Purchaser or the Title Company, including
      normal and customary affidavits and tax clearance certificates, to effectuate
      the transactions contemplated by this Agreement and to induce the Title Company
      to insure title to the Hotel as described herein.

     

    
      
        
        

      

      
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    ARTICLE
      X

    Default

    


    10.1    Default
      by Purchaser.
      IN THE
      EVENT THAT THE ESCROW AND THIS TRANSACTION FAIL TO CLOSE SOLELY AS A RESULT
      OF
      THE DEFAULT OF PURCHASER IN THE PERFORMANCE OF ITS OBLIGATIONS UNDER THIS
      AGREEMENT, PURCHASER AND SELLERS AGREE THAT SELLERS’ ACTUAL DAMAGES WOULD BE
      IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX THE PARTIES THEREFORE AGREE THAT
      IN
      THE EVENT THAT THE ESCROW AND THIS TRANSACTION FAIL TO CLOSE SOLELY AS A RESULT
      OF THE DEFAULT OF PURCHASER IN THE PERFORMANCE OF ITS OBLIGATIONS HEREUNDER,
      SELLERS, AS SELLERS’ SOLE AND EXCLUSIVE REMEDY, ARE ENTITLED TO LIQUIDATED
      DAMAGES IN THE AMOUNT OF THE PURCHASER’S DEPOSIT. IN THE EVENT THAT THE ESCROW
      FAILS TO CLOSE AS A RESULT OF PURCHASER’S DEFAULT, THEN: (A) THIS AGREEMENT AND
      THE RIGHTS AND OBLIGATIONS OF PURCHASER AND SELLERS HEREUNDER AND THE ESCROW
      CREATED HEREBY SHALL TERMINATE; (B) ESCROW AGENT SHALL, AND IS HEREBY AUTHORIZED
      AND INSTRUCTED TO, RETURN PROMPTLY TO PURCHASER AND SELLERS ALL DOCUMENTS AND
      INSTRUMENTS TO THE PARTIES WHO DEPOSITED THE SAME; (C) SELLERS SHALL RETAIN
      THE
      PURCHASER’S DEPOSIT (INCLUDING INTEREST AND DIVIDENDS EARNED THEREON), AND THE
      SAME SHALL BE LIQUIDATED DAMAGES; AND (D) ALL TITLE AND ESCROW CANCELLATION
      CHARGES, IF ANY, SHALL BE CHARGED TO PURCHASER.

    


    10.2    Default
      By Sellers.
      IN THE
      EVENT THAT THE ESCROW AND THIS TRANSACTION FAIL TO CLOSE SOLELY AS A RESULT
      OF
      THE DEFAULT OF SELLERS IN THE PERFORMANCE OF THEIR OBLIGATIONS UNDER THIS
      AGREEMENT. PURCHASER AND SELLERS AGREE THAT PURCHASER’S ACTUAL DAMAGES WOULD BE
      IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX.. THE PARTIES THEREFORE AGREE THAT
      IN THE EVENT THAT THE ESCROW AND THIS TRANSACTION FAIL TO CLOSE SOLELY AS A
      RESULT OF THE DEFAULT OF THE SELLERS IN THE PERFORMANCE OF THEIR OBLIGATIONS
      HEREUNDER, PURCHASER, AS PURCHASER’S SOLE AND EXCLUSIVE REMEDY, IS ENTITLED TO
      LIQUIDATED DAMAGES IN THE AMOUNT OF SELLERS’ DEPOSIT, IN THE EVENT THAT THE
      ESCROW FAILS TO CLOSE AS A RESULT OF SELLERS’ DEFAULT, THEN: (A) ESCROW AGENT
      SHALL, AND IS HEREBY AUTHORIZED AND INSTRUCTED TO, RETURN PROMPTLY TO PURCHASER
      AND SELLERS ALL DOCUMENTS AND INSTRUMENTS TO THE PARTIES WHO DEPOSITED THE
      SAME;
      (B) ESCROW AGENT SHALL RETURN THE DEPOSIT TO PURCHASER PURSUANT TO PURCHASER’S
      INSTRUCTIONS UNLESS SAME HAS BEEN RELEASED TO SELLERS IN WHICH EVENT SELLERS
      SHALL RETURN THE DEPOSIT TO PURCHASER; (C) ALL TITLE AND ESCROW CANCELLATION
      CHARGES, IF ANY, SHALL BE CHARGED TO SELLERS; AND (D) THIS AGREEMENT SHALL
      TERMINATE PURCHASER EXPRESSLY WAIVES THE RIGHT TO CLAIM RECOVERY OF ANY DAMAGES
      SUFFERED BY PURCHASER AS A RESULT OF SELLERS’ DEFAULT (INCLUDING, BUT NOT
      LIMITED TO, DAMAGES IN THE NATURE OF LOSS OF PROFITS DERIVED FROM ANTICIPATED
      REVENUES GENERATED BY THE PROPERTY. ALL TITLE AND ESCROW CANCELLATION CHARGES,
      IF ANY, SHALL BE CHARGED TO SELLERS.

    


    
      
        
        

      

      
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    SELLERS
      AND PURCHASER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE PROVISIONS
      OF
      SECTION 10.1 AND SECTION 10.2, AND BY THEIR INITIALS IMMEDIATELY BELOW AGREE
      TO
      BE BOUND BY THEIR TERMS.

     

    
      	
               

            	 	 
	
               

            	 	 
	
               

            	 	 
	
               

            	 	 
	
               

            	 	
               

            
	
              Sellers’
                Initials

               

            	 	
              Purchaser’s
                Initials

               

            


    

     

    ARTICLE
      XI

    Survival;
      Indemnification Obligations; Post-Closing Obligations

    


    11.1    Generally.
      Except
      as otherwise expressly provided herein, the respective representations,
      warranties, obligations, covenants and agreements of Sellers contained in
      Section 3 shall survive the Closing for a period of three (3) months after
      the
      date hereof except that those contained in Section 3.13 shall survive the
      Closing for a period of six (6) months after the date hereof, and those of
      Purchaser shall survive the Closing for three (3) months after the date
      hereof.

     

    11.2    Survival.
      Any
      claims for breach of the representations, warranties and covenants of Sellers
      or
      Purchaser contained in Section 3 herein shall be made within three (3) months
      following the Closing Date (the “Survival
      Term”),
      otherwise they shall irrevocably be deemed to have been waived. 

     

    11.3    Notice
      and Cooperation on Indemnification.
      Whenever
      either party shall learn through the filing of a claim or the commencement
      of a
      proceeding or otherwise of the existence of any liability for which the other
      party is or may be responsible under this Agreement, the party learning of
      such
      liability shall notify the other party promptly and furnish such copies of
      documents (and make originals thereof available) and such other information
      as
      such party may have that may be used or useful in the defense of such claims
      and
      shall afford said other party full opportunity to defend the same in the name
      of
      the notifying party and generally shall cooperate with said other party in
      the
      defense of any such claim. Upon receipt of such notice of possible liability,
      the party obligated to provide indemnity shall have the right to provide a
      written notice to the party entitled to indemnity that the indemnifying party
      elects to assume the defense of such matter, including, without limitation,
      the
      employment of counsel reasonably satisfactory to the indemnified party;
      whereupon the indemnifying party shall have the right to prosecute such defense
      and shall be responsible for the payment of the fees and disbursements of such
      counsel; provided,
      however,
      if in
      the reasonable judgment of the indemnified party, (i) such litigation, action,
      suit, demand, claim or the resolution thereof, would have a material adverse
      effect on the indemnified party or (ii) the indemnifying party shall have a
      conflict of interest in defending such action on the indemnified party’s behalf,
      then at the indemnified party’s election, the indemnified party may defend
      itself, and in either of such instances it shall be at the indemnifying party’s
      expense;
      provided,
      however,
      that
      the indemnifying party shall be responsible for the reasonable fees of no more
      than one counsel in each jurisdiction in each proceeding. No indemnifying party
      shall be responsible for any obligation, loss, cost, expense or other liability
      to the extent that (a) the party entitled to indemnification failed to provide
      prompt notice thereof to the indemnifying party and (b) such obligation, loss,
      cost, expense or other liability could have been avoided if prompt notice had
      been given.

     


    
      
        
        

      

      
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    ARTICLE
      XII

    Casualty
      or Condemnation

    


    12.1    Condemnation.
      If,
      prior to the Closing, all or any “Material Portion” of the Property (as
      hereinafter defined) is taken by condemnation or eminent domain (or is the
      subject of a pending or contemplated taking which has not been consummated),
      Sellers shall notify Purchaser of such fact. In such event, Purchaser shall
      have
      the option to terminate this Agreement upon written notice to Sellers given
      not
      later than thirty (30) days after Purchaser’s receipt of such notice from
      Sellers. Upon such termination, Escrow Agent shall return the Deposit to
      Purchaser, the parties shall equally share the cancellation charges, if any,
      of
      Escrow Agent and Title Company, and neither party shall have any further rights
      or obligations hereunder, other than pursuant to any provision hereof which
      expressly survives the termination of this Agreement. Purchaser shall have
      no
      right to terminate this Agreement as a result of any taking of any portion
      of
      the Property that is not a Material Portion. If Purchaser does not elect or
      has
      no right to terminate this Agreement, Sellers shall assign and turn over to
      Purchaser, and Purchaser shall be entitled to receive and keep, all awards
      for
      the taking by condemnation and Purchaser shall be deemed to have accepted the
      Property subject to the taking without reduction in the Purchase Price. As
      used
      herein, the term “Material Portion” shall mean any portion having a value in
      excess of Three Million and 00/100 ($3,000,000.00) Dollars.

    


    12.2    Casualty.
      Prior
      to the Closing and notwithstanding the pendency of this Agreement, the entire
      risk of loss or damage by earthquake, hurricane, tornado, flood, landslide,
      fire
      or other casualty shall be borne and assumed by Sellers. If prior to the Closing
      any Material Damage (as hereinafter defined) occurs to any portion of the
      Property as a result of earthquake, hurricane, tornado, flood, landslide, fire
      or other casualty, Sellers shall immediately notify Purchaser of such fact.
      In
      such event, Purchaser shall have the option to terminate this Agreement upon
      written notice to Sellers given not later than thirty (30) days after
      Purchaser’s receipt of such notice from Sellers. Upon such termination, Escrow
      Agent shall return the Deposit to Purchaser, the parties shall equally share
      the
      cancellation charges, if any, of Escrow Agent and Title Company, and neither
      party shall have any further rights or obligations hereunder, other than
      pursuant to any provision hereof which expressly survives the termination of
      this Agreement. Purchaser shall have no right to terminate this Agreement as
      a
      result of any damage or destruction of any portion of the Property that does
      not
      constitute Material Damage. If Purchaser does not elect or has no right to
      terminate this Agreement, Sellers shall assign and turn over, and Purchaser
      shall be entitled to receive and keep, all insurance proceeds payable with
      respect to such damage or destruction (which shall then be repaired or not
      at
      Purchaser’s option and cost) and Purchaser shall receive, as a credit against
      the Purchase Price, an amount equal to the deductible amount with respect to
      the
      insurance and the parties shall proceed to the Closing pursuant to the terms
      hereof without modification of the terms of this Agreement. If Purchaser does
      not elect or has no right to terminate this Agreement by reason of any casualty,
      Purchaser shall have the right to participate in any adjustment of any insurance
      claim. As used herein, the term “Material Damage” shall mean damage or
      destruction, the cost of repair of which exceeds Three Million and 00/100
      ($3,000,000.00) Dollars.

     

    
      
        
        

      

      
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    ARTICLE
      XIII

    Apportionments

    


    13.1    Apportionments.
      The
      following apportionments shall be made between the parties at the Closing as
      of
      11:59 PM on the day immediately prior to the Closing Date (the “Apportionment
      Date”).

     

     (a) real
      estate taxes, personal property taxes, special assessments and vault charges,
      if
      any, on the basis of the fiscal period for which assessed;

     

     (b) water
      and
      sewer service charges and charges for gas, electricity, telephone and all other
      public utilities. If there are meters measuring the consumption of water, gas
      or
      electric current, Sellers shall, prior to the Apportionment Date, if possible,
      cause such meters to be read, and shall pay all utility bills for which Sellers
      are liable upon receipt of statements therefor. Purchaser shall be responsible
      for causing such utilities and services to be changed to its name and shall
      be
      liable for and shall pay all utility bills for services rendered after the
      Apportionment Date. If Purchaser elects to transfer utility deposits into its
      name, then the Sellers shall receive an adjustment in the full amount of those
      deposits; 

     

     (c) amounts
      which have been paid or are payable under the Contracts, Equipment Leases and
      Permits assigned to and assumed by Purchaser at Closing; 

     

     (d) prepaid
      advertising expenses; 

     

     (e) commissions
      of credit and referral organizations, including travel agreements;

     

     (f) all
      other
      charges and fees customarily prorated and adjusted in similar
      transactions.

     

    13.2    Room
      Revenue; Receivables and Payables.
      All
      revenues received or to be received for the period prior to and including the
      Apportionment Date shall belong to Sellers (with Purchaser to remit such
      revenues to Sellers to the extent any such revenues are paid to Purchaser
      following Closing), and for the period beginning on the day immediately
      following the Apportionment Date such revenues shall belong to Purchaser. The
      accounts receivable of registered guests at the Property who have not checked
      out and were occupying rooms as of 11:59 p.m. on the Apportionment Date are
      collectively called the “Guest
      Ledger”,
      and
      Purchaser shall pay over to Sellers, at Closing, the Guest Ledger, it being
      the
      intent of the parties that all room revenues for the night preceding Closing
      will belong to Sellers.

     

    
      
        
        

      

      
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    13.3    Food
      and Beverage Revenue; Vending Machine Revenue.
      All
      monies received in connection with bar and restaurant services at the Hotel
      during the Apportionment Date shall be divided evenly between Purchaser and
      Sellers. Vending machine proceeds shall be counted as close to 11:59 p.m. on
      the
      Apportionment Date as is possible and the net amount thereof shall be credited
      to Sellers at Closing.

     

    13.4    Guests’
      Property.
      All
      baggage or other property of patrons of the Hotel checked or left in care of
      Sellers shall be listed in an inventory to be prepared in duplicate and signed
      by Sellers’ and Purchaser’s representatives on the Closing Date. Purchaser shall
      be responsible from and after the Closing Date and will indemnify and hold
      Sellers harmless from and against all claims for all baggage and property listed
      in such inventory. 

     

    13.5    Gift
      Shop Operations.
      Gift
      shop operations shall be adjusted as of 11:59 p.m. on the Apportionment Date.
      Income before such time shall be for the account of Sellers, and income after
      such time shall be for the account of Purchaser, with Sellers being credited
      for
      the amount of the House Bank on the morning of the Closing Date.

     

    13.6    Accounting.
      Except
      as otherwise expressly provided in this Agreement, all apportionments and
      adjustments shall be made in accordance with the Uniform System of Accounts,
      and
      to the extent not inconsistent therewith, generally accepted accounting
      principles. The computation of the adjustments shall be jointly prepared by
      Sellers and Purchaser, and, upon the request of either Purchaser or Sellers,
      shall be reviewed by a mutually acceptable reputable accounting firm (the
“Accountants”)
      and
      reviewed by representatives of both Purchaser and Seller. To the extent the
      exact amount of any adjustment item provided for in this Article XIII cannot
      be
      precisely determined on the Closing Date, the Accountants shall estimate the
      amount thereof, for purposes of computing the net amount due Sellers or
      Purchaser pursuant to this Article XIII and shall determine the exact amount
      thereof not later than sixty (60) days after the Closing Date. All
      determinations made by the Accountants shall be binding on both Sellers and
      Purchaser. The fees and expenses of the Accountants shall be borne one-half
      each
      by Sellers and Purchaser.

     

    ARTICLE
      XIV

    Miscellaneous

    


    14.1    Assignment.
      (a)
      Neither party shall assign or transfer or permit the assignment or transfer
      of
      its rights or obligations under this Agreement without the prior written consent
      of the other, any such assignment or transfer without such prior consent being
      hereby declared to be null and void; provided,
      however,
      that
      Purchaser shall have the right to either nominate one or more Affiliates (as
      defined below) to take title to the Property or assign this Agreement to an
      Affiliate in its entirety without Sellers’ consent, upon written notice to
      Sellers no later than five (5) days prior to the Closing Date, but Purchaser
      shall remain liable following any such assignment for all obligations of
“Purchaser” hereunder. “Affiliate” shall mean an entity in which Purchaser or
      its affiliate is the general partner or managing member. 

     

    
      
        
        

      

      
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     (b) In
      the
      event either party consents to an assignment of this Agreement by the other
      for
      which consent is required, no further assignment shall be made without another
      written consent from the consenting party, unless the assignment may otherwise
      be made without consent under this Agreement. An assignment by either Sellers
      or
      Purchaser of its interest in this Agreement shall not relieve Sellers or
      Purchaser, as the case may be, from its obligations, but this Agreement shall
      then inure to the benefit of, and be binding on, the assignee’s successors,
      heirs, legal representatives and assigns.

     

     (c) The
      Purchaser agrees to cooperate with any Seller if any Seller attempts to effect
      a
      Section 1031 exchange in connection with any Seller’s sale of the Property,
      provided the following conditions are satisfied: (i) the exchange shall cause
      no
      delay in Closing; (ii) the Seller shall pay all costs and expenses (including
      reasonable attorneys’ fees and related expenses) incurred by the Seller solely
      because of the Seller’s attempts to effect a Section 1031 exchange; (iii) the
      exchange shall not affect the Purchase Price or any other amount payable
      hereunder by the Purchaser, nor shall it change the manner or timing of payment
      of such sums; and (iv) Purchaser’s obligations hereunder to close the
      acquisition of the Property shall not be conditioned or contingent upon Seller
      successfully effecting a 1031 exchange. Anything contained herein to the
      contrary notwithstanding, any Seller may assign its rights under this Agreement
      to a qualified intermediary for the purpose of effecting a Section 1031
      exchange. This Section 14.1(c) shall survive Closing and delivery of the Deed
      hereunder.

     

    14.2    Consents.
      If,
      under this Agreement, the consent of a party is required, the consent shall
      be
      in writing and shall be executed by a duly authorized officer or
      agent.

     

    14.3    Applicable
      Law.
      This
      Agreement shall be governed by the laws of the District of Columbia, without
      resort to the choice of law rules thereof.

     

    14.4    Headings;
      Exhibits.
      The
      headings of articles and sections of this Agreement are inserted only for
      convenience; they are not to be construed as a limitation of the scope of the
      particular provision to which they refer. All exhibits attached or to be
      attached to this Agreement are incorporated herein by this
      reference.

     

    14.5    Notices.
      Notices
      and other communications required by this Agreement shall be in writing and
      delivered by hand against receipt or sent by recognized overnight delivery
      service or by certified or registered mail, postage prepaid, with return receipt
      requested. All notices shall be addressed as follows:

     

    If
      to
      Sellers:

    Claremont
      DC Hotel LLC

    One
      Lakeshore Center

    Bridgewater,
      Massachusetts 02324

    Attention:
      Michael Cahill

    Facsimile:
      508 279-3495

    


    
      
        
        

      

      
        -
          18
          -

        
          

        

      

      
        
        

      

    

     

    Claremont
      DC Hotel II LLC

    One
      Lakeshore Center

    Bridgewater,
      Massachusetts 02324

    Attention:
      Michael Cahill

    Facsimile:
      508 279-3495

     

    with
      a
      copy to:

    


    Martin
      C.
      Pomeroy, Esquire

    Bernkopf
      Goodman LLP

    125
      Summer Street, 13th
      Floor

    Boston,
      MA 02110

    Telephone:
      617-790-3370

    Facsimile:
      617-790-3300

    


    If
      to
      Sellers:

    


    Apple
      Hotel, LLC

    905
      Silver Spring Avenue

    Silver
      Spring, MD 20910

    Attention:
       Eliezer
      H. Benbassat

    


    Apple
      Hotel Holdings, LLC

    905
      Silver Spring Avenue

    Silver
      Spring, MD 20910

    Attention:
       Eliezer
      H. Benbassat

    


    Apple
      Hotel Investments, LLC

    905
      Silver Spring Avenue

    Silver
      Spring, MD 20910

    Attention:
       Eliezer
      H. Benbassat

     

    with
      a
      copy to:

    


    Justine
      Fitzgerald, Esquire

    Arnold
      & Porter

    555
      Twelfth Street, NW

    Suite
      831

    Washington,
      DC 20004

    (202)
      942-5522

    (202)
      942-5999

     

    
      
        
        

      

      
        -
          19
          -

        
          

        

      

      
        
        

      

    

    


    If
      to
      Purchaser:

    


    Hersha
      Hospitality Trust

    Penn
      Mutual Towers

    510
      Walnut Street, 10th
      Floor

    Philadelphia,
      PA 19106

    Attention:
      Neil H. Shah, Executive Vice President

    Telephone:
      215-238-1046

    Facsimile:
      215-238-0157

    


    with
      a
      copy to:

    


    James
      L.
      Ray, Esquire

    Wolf,
      Block, Schorr & Solis-Cohen LLP 

    1650
      Arch
      Street

    Philadelphia,
      PA 19103 

    Telephone:
      215-977-2218

    Facsimile:
      215-405-3818

    


    or
      to
      such other address as may be designated by a proper notice. Notices shall be
      deemed to be effective upon receipt or refusal of the addressee to accept
      delivery. 

    


    14.6  
       Waiver.
      The
      failure of either party to insist on strict performance of any of the provisions
      of this Agreement or to exercise any right granted to it shall not be construed
      as a relinquishment or future waiver; rather, the provision or right shall
      continue in full force. No waiver of any provision or right shall be valid
      unless it is in writing and signed by the party giving it.

     

    14.7    Partial
      Invalidity.
      If any
      part of this Agreement is declared invalid by a court of competent jurisdiction,
      this Agreement shall be construed as if such portion had never existed, unless
      this construction would operate as an undue hardship on Sellers or Purchaser
      or
      would constitute a substantial deviation from the general intent of the parties
      as reflected in this Agreement. 

     

    14.8    Entire
      Agreement.
      This
      Agreement, together with the other writings signed by the parties and
      incorporated herein by reference and together with any instruments to be
      executed and delivered under this Agreement, constitutes the entire agreement
      between the parties with respect to the purchase and sale of the Property and
      supersedes all prior oral and written understandings. Any amendments to this
      Agreement shall not be effective unless in writing and signed by the parties
      hereto.

     

    14.9    Time
      is of the Essence.
      Time is
      of the essence with respect to performance of all obligations under this
      Agreement.

     

    14.10    Waiver
      of Jury Trial.
      Sellers
      and Purchaser each hereby waives any right to jury trial in the event any party
      files an action relating to this Agreement or to the transactions or obligations
      contemplated hereunder.  

     

    
      
        
        

      

      
        -
          20
          -

        
          

        

      

      
        
        

      

    

     

    14.11    Counterparts.
      This
      Agreement may be executed in separate counterparts, none of which need contain
      the signatures of all parties, each of which shall be deemed to be an original,
      and all of which taken together constitute one and the same instrument. It
      shall
      not be necessary in making proof of this Agreement to produce or account for
      more than the number of counterparts containing the respective signatures of,
      or
      on behalf of, all of the parties hereto. 

     

    14.12    Brokerage.
      Except
      for Molinaro Koger, whose commission shall be paid by Seller,
      Purchaser and Sellers each represents and warrants to the other that no broker
      or agent is entitled to the payment of a commission for services rendered in
      connection with the transactions contemplated herein. Each of the parties hereto
      agrees to indemnify and hold the other harmless from claims made by any broker,
      attorney or finder claiming through such party for a commission, fee or
      compensation in connection with this Agreement or the sale of the Property
      hereunder.
      Sellers
      agree to indemnify and hold the Purchaser harmless from claims made by Eastdil
      Realty for commissions in connection with this Agreement.
      The
      provisions of this Section 14.12 shall survive Closing.

     

    14.13    Revenue
      Contracts and Reservations.
      Purchaser hereby agrees that from and after the Closing Date, Purchaser shall
      honor all revenue contracts and transient reservations relating to the Hotel
      which were entered into or accepted by Sellers or Manager in the ordinary course
      of business prior to the Closing Date, at the quoted rates, so long as disclosed
      to Purchaser prior to the Closing Date.

     

    14.14    Attorneys’
      Fees.
      If
      either party hereto fails to materially perform any of its obligations under
      this Agreement or if any dispute arises between the parties hereto concerning
      the meaning or interpretation of any provision of this Agreement, then the
      defaulting party or the party not prevailing in such dispute, as the case may
      be, shall pay any and all reasonable costs and expenses incurred by the other
      party on account of such default and/or in enforcing or establishing its rights
      hereunder, including, without limitation, court costs and reasonable attorneys’
fees and disbursements. Any such attorneys’ fees and other expenses incurred by
      either party in enforcing a judgment in its favor under this Agreement shall
      be
      recoverable separately from and in addition to any other amount included in
      such
      judgment, and such attorneys’ fees obligation is intended to be severable from
      the other provisions of this Agreement and to survive and not be merged into
      any
      such judgment.

     

    14.15    Public
      Announcements.
      Neither
      Sellers nor Purchaser shall make any public statement or issue any press release
      prior to the Closing with respect to this Agreement or the transactions
      contemplated hereby without the prior written consent of the other party.


     

    14.16    Time
      for Performance.
      If the
      date for the performance of any obligation, or the giving of any notice, by
      Sellers or Purchaser hereunder falls upon a Saturday, Sunday or legal holiday
      recognized by the United States government, then the time for such performance
      or notice shall be extended until the next business day.

     

    14.17    Further
      Assurances.
      Each
      party agrees to execute and deliver, after the Closing, such forms of corrective
      deeds, bills of sale or other documentation as the other party may reasonably
      request to carry out the intent of this Agreement.

     

    
      
        
        

      

      
        -
          21
          -

        
          

        

      

      
        
        

      

    

     

    14.18    Contract
      Date.
      The
      “Contract Date” shall be the date upon which each Seller shall have executed at
      least three copies of this Agreement and shall have delivered one copy to
      Purchaser and one copy to Escrow Agent, provided however that such date may
      not
      occur later than 6:00 p.m. on August
      10,
      2005. In the event the Contract Date has not occurred by August
      10,
      2005, the offer created by this Agreement shall become null and void and of
      no
      further force or effect whatsoever.

     

    
      
        
        

      

      
        -
          22
          -

        
          

        

      

      
        
        

      

    

    
       

      IN
        WITNESS WHEREOF, Sellers and Purchaser have caused this Agreement to be executed
        as of the Contract Date indicated above.

       

    

    
      
        
          	
                  ATTEST/WITNESS:

                	
                  PURCHASER 

                	 
	 	 	 	 
	 	
                  HERSHA
                    HOSPITALITY TRUST, 

                	 
	 	
                  a

                	
                   

                	
                  Trust

                	
                   

                
	 	 	 	 
	 	
                  By:

                	
                   

                	 
	 	
                  Name:

                	
                   

                	 
	 	
                  Its:

                	 
	 
	 	 	 	 


        

         

        
          
            	 	
                    SELLERS 

                  	 
	 	 	 	 
	 	
                    CLAREMONT
                      DC HOTEL LLC 

                  	 
	 	
                    a
                      Delaware limited liability company 

                  	 
	 	 	 	 
	 	
                    By:

                  	
                    Claremont
                      Summer, Inc., 

                    its
                      Manager

                  	 
	 	 	 	 
	 	
                     

                  	
                    By:

                  	  
	
                     

                  
	 	 	
                    Name:

                  	 Michael
                    Cahill	 
	 	 	Its:	 Vice
                    President and Secretary	 


          

           

          
            	 	
                    CLAREMONT
                      DC HOTEL LLC 

                  	 
	 	
                    a
                      Delaware limited liability company 

                  	 
	 	 	 	 
	 	
                    By:

                  	
                    Claremont
                      Summer, Inc., 

                    its
                      Manager

                  	 
	 	 	 	 
	 	
                     

                  	
                    By:

                  	  
	
                     

                  
	 	 	
                    Name:

                  	 Michael
                    Cahill	 
	 	 	Its:	 Vice
                    President and Secretary	 


          

           

          
            
              	 	
                      APPLE
                        HOTEL, LLC 

                    	 
	 	 	 	 
	 	
                      By:

                    	 	 
	 	
                      Name:

                    	
                      Eliezer
                        H. Benbassat

                    	 
	 	
                      Title:

                    	
                      Manager

                    	 
	 	 	 	 


            

             

            
              	 	
                      APPLE
                        HOTEL HOLDINGS, LLC 

                    	 
	 	 	 	 
	 	
                      By:

                    	
                        


                    	 
	 	
                      Name:

                    	
                      Eliezer
                        H. Benbassat

                    	 
	 	
                      Title:

                    	
                      Manager

                    	 


            

             

            
              
                	
                        [signatures
                          are continued on the next
                          page]   

                      


              

               

              
                
                  
                  

                

                
                  -
                    23
                    -

                  
                    

                  

                

                
                  
                  

                

              

               

              
                	 	
                        APPLE
                          HOTEL INVESTMENTS, LLC 

                      	 
	 	 	 	 
	 	
                        By:

                      	
                         

                      	 
	 	
                        Name:

                      	
                        Eliezer
                          H. Benbassat

                      	 
	 	
                        Title:

                      	
                        Manager

                      	 


              

            

          

        

      

    

     

    
      
        
        

      

      
        -
          24
          -

        
          

        

      

      
        
        

      

    

     

    EXHIBITS

    


    


    
      	
              A

            	
              Legal
                Description of Land

            


    

    
      	
              B

            	
              Form
                of Title Commitment

            


    

    
      	
              C

            	
              Intentionally
                Deleted

            


    

    
      	
              D

            	
              Purchase
                Price Allocation

            


    

    
      	
              E

            	
              Form
                of Escrow Instructions

            


    

    
      	
              F

            	
              List
                of Proceedings

            


    

    
      	
              G

            	
              List
                of Contracts

            


    

    
      	
              H

            	
              List
                of Equipment Leases

            


    

    
      	
              I

            	
              List
                of Permits

            


    

    
      	
              J

            	
              List
                of Environmental Reports

            


    

    
      	
              K

            	
              Statements
                of Revenue

            


    

    
      	
              L

            	
              Form
                of Deed

            


    

    
      
        	
                M

              	
                Form
                  of Bill of Sale

              


      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    EXHIBIT
      A

     

    Legal
      Description of Land

    


    


    The
      Land
      is more fully described as follows:

    


    All
      of
      those lots or parcels of land located in the District of Colombia and more
      particularly described as follows:

    


    Part
      of
      Lot 52 in Square 250 in a subdivision made by 817 Fourteenth Street Associates
      Limited Partnership, and others per plat recorded in Liber No. 183 at folio
      117
      among the Records of the Office of the Surveyor of the District of Colombia,
      and
      being more particularly described as follows:

    


    BEGINNING
      for the same at a point on the East right of way line of 14th
      Street,
      N.W., (110 feet wide), said point lying distant due North, 181.50 feet from
      the
      intersection with the North right of way line of H Street, N.W., (90 feet wide),
      said point being also the common front corner of former Lot 50 and 847 in said
      Square; thence, departing 14th
      Street,
      N.W., and running through, over and across Lot 52 so as to include a portion
      thereof, the following courses and distances:

    


    
      	 	
              1.

            	
              Due
                East, 110.50 feet to a point;
                thence

            


    

     

    
      	 	
              2.

            	
              Due
                South, 7.50 feet to a point, thence

            


    

     

    
      	 	
              3.

            	
              Due
                East, 14.50 feet to the Northwest corner of a 30-foot wide public
                alley in
                said Square, as shown on plat recorded in subdivision book 183 at
                page
                117, aforesaid; and thence, running with the East end of said public
                alley
                for the first 30 feet of length; thence


            


    

     

    
      	 	
              4.

            	
              Due
                South, 94.5 feet to a point; thence

            


    

     

    
      	 	
              5.

            	
              Due
                West, 29.00 feet to a point; thence

            


    

     

    
      	 	
              6.

            	
              Due
                South 18.00 feet to a point; thence

            


    

     

    
      	 	
              7.

            	
              Due
                West, 21.00 feet to a point; thence

            


    

     

    
      	 	
              8.

            	
              Due
                South 15.50 feet to a point; thence

            


    

     

    
      	 	
              9.

            	
              Due
                West, 75.00 feet to a point on the aforementioned East right of way
                line
                of 14th
                Street, N.W.; and thence running with said
                line

            


    

     

    
      	 	
              10.

            	
              Due
                North, 13.50 feet to the place of
                beginning.

            


    

     

    NOTE:
      At
      the date hereof the above described land is designated on the Records of the
      Assessor of the District of Colombia for assessment and taxation purposes as
      Lot
      858 in Square 250.

     

    Part
      of
      Record Lot 52 in Square 250, District of Colombia, as per Plat of Subdivision
      made by 817 Fourteenth Street Associates Limited Partnership, recorded July
      31,
      1990, in Subdivision Book 183 at page 117 among the Records of the Office of
      the
      Surveyor of the District of Colombia; said part of Record Lot 52 being also
      shown, for purposes of assessment and taxation purposes as Lot 858 in Square
      250
      as shown on Assessment and Taxation Plat 3779-G dated October 3, 1995 on file
      among said Records; said part of Record Lot 52 taxed as Lot 858, being more
      particularly described as follows: 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    BEGINNING
      for the same at a “P.K.” nail set on the East line of 14th
      Street,
      N.W., (110 feet wide) said point lying DISTANT South 00 degrees 00’ 00” West,
      136.50 (per record) from South line of I Street, N.W., (90 feet wide) said
      point
      being also the common West corner of Lots 857 and 858 in Square 250 as shown
      among the aforesaid Records; and thence departing 14th
      Street,
      N.W., and running with the common dividing lines between said Lots 857 and
      858

     

    1. North
      90
      degrees 00’ 00” East, 110.50 feet (per record); thence

     

    2. South
      00
      degrees 00’ 00” West, 7.50 feet (per record); thence

     

    3. North
      90
      degrees 00’ 00” East 14.50 feet (per survey) to the Northwest corner of a 30
      feet wide Public Alley in said Square; thence departing Lot 857 and running
      with
      the West end of said Public Alley for the first 30 feet of distance and
      thereafter with the common dividing lines between Lots 858 and 46 in said
      Square.

     

    4. South
      00
      degrees 00’ 00” West, 95.125 feet (per Assessor’s Plat), 94.93 feet (per
      survey); thence

     

    5. South
      90
      degrees 00’ 00” West, 29.00 feet (per record), South 89 degrees 35’ 52” West,
      29.16 feet (per survey); thence

     

    6. South
      00
      degrees 00’ 00” West, 18.00 feet (per record), South 00 degrees 08’ 00’ West,
      18.00 feet (per survey); thence

     

    7. North
      90
      degrees 00’ 00” West, 21.00 feet (per record), North 89 degrees 52’ 00” West,
      21.02 feet (per survey); thence

     

    8. South
      00
      degrees 00’ 00” West, 15.50 feet (per record), South 00 degrees 08’ 00” West,
      15.22 feet (per survey); thence

     

    9. South
      90
      degrees 00’ 00” West, 75.00 feet (per record), 75.11 feet (per D.C. measurement
      to “P.K.” nail set on the aforementioned East line of 14th
      Street,
      N.W., at the common West corner of Lots 858 and 46 in said Square; thence
      departing Lot 46 and running with said East line of 14th
      Street,
      N.W.

     

    10. North
      00
      degrees 00’ 00” East, 136.12 feet (per Assessor’s Plat), 135.82 feet (per
      survey) to the place of the beginning.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

     

    Form
      of Title Commitment 

    


    See
      attached.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C

     

    Intentionally
      Deleted


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      D

    


    Purchase
      Price Allocation

    


    


    


    
      	
              Land:

            	 	
              $6,450,000.00

            
	 	 	 
	 	 	 
	
              Improvements:

            	 	
              $74,500,000.00

            
	 	 	 
	 	 	 
	
              FF&E:

            	 	
              $1,150,000.00

            
	 	 	 
	 	 	 
	
              Good
                Will:

            	 	
              $3,000,000.00

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      E

     

    Form
      of Escrow Instructions

    


    FORM
      OF ESCROW INSTRUCTIONS FOR DEPOSIT

    


    August
      __,
      2005

    


    
      	
               

            	 
	
               

            	 
	 
	 
	
               

            	 


    

    


    
      	 	
              Re:

            	
              Deposit
                under Purchase and Sale Agreement (the “Agreement”) dated August
                __, 2005, by and between Claremont DC Hotel LLC, Claremont DC Hotel
                II
                LLC, Apple Hotel, LLC, Apple Hotel Holdings, LLC and Apple Hotel
                Investments, LLC (collectively “Sellers”) and Hersha Hospitality Trust
                (“Purchaser”) 

            


    

    


    Gentlemen
      and Ladies:

    


    Purchaser
      and Sellers have entered into the Agreement pursuant to which Purchaser agrees
      to purchase the Hotel described in the Agreement. In accordance with the
      Agreement, Purchaser shall
      (unless the Agreement is terminated by Purchaser on or before that date),
      deliver to you cash in the additional amount of Four Million and 00/100
      ($4,000,00.00) Dollars (which, along with any interest earned thereon, is
      hereinafter referred to as the “Purchaser’s Deposit”).
      You are
      to place the Purchaser’s Deposit in an interest bearing account (for this
      purpose, Purchaser's Federal Employer I.D. number is __________________) and
      hold the Purchaser’s Deposit in escrow and deliver it to Sellers or Purchaser in
      accordance with these instructions. 

    


    In
      addition, Sellers shall (unless the Agreement is terminated by Sellers on or
      before that date), deliver to you cash in the amount of Five Hundred Thousand
      and 00/100 Dollars (which, along with any interest earned thereon, is
      hereinafter referred to as the “Sellers’ Deposit.” You are to place the Sellers’
Deposit in an interest bearing account (for this purpose the I.D. number of
      a
      Claremont Entity is ______________) and hold the Sellers’ Deposit in escrow and
      in accordance with these instructions.

    


    In
      the
      event that,
      prior
      to ten (10) days after the date you receive the Purchaser’s Deposit (or any
      later date through which Sellers and Purchaser agree to extend the Feasiblity
      Period under the Agreement), you receive written notice from Purchaser
      (“Purchaser’s Notice”) stating that it is terminating the Agreement, you shall,
      not later than the first (1st)
      business day following receipt of such notice, return the Purchaser’s Deposit
      held by you to Purchaser, notwithstanding any contrary instructions you may
      receive from Sellers or any other party. In the event that, at any time after
      such date,
      you
      receive notice from Sellers (“Sellers’ Notice”) stating that (i) Purchaser is in
      default under the Agreement, and (ii) a copy of Sellers’ Notice has been
      delivered to Purchaser, you shall, on the fifth (5th) business day after receipt
      of Sellers’ Notice, deliver the Sellers’ Deposit (by delivering cash, certified
      check or some other form of immediately available funds, to Sellers,
      _______________________________________________________________, or such other
      address as Sellers may request) to Sellers, except that if you receive written
      notice from Purchaser or Purchaser’s counsel within three (3) business days
      after receipt of Sellers’ Notice that Purchaser disputes Sellers’ right to
      receive the Sellers’ Deposit and directs you not to make the foregoing delivery,
      you shall not deliver the Deposit to Sellers but shall instead retain it or,
      if
      appropriate, interplead the Deposit in a court of competent
      jurisdiction.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    You
      are
      not to disclose to any person (other than the parties hereto, their employees,
      agents or independent contractors) any information about the Agreement or its
      existence or this letter of instructions (except if requested by either party
      or
      as may be required by court in any litigation or by law).

    


    You
      are
      to maintain each Deposit in a federally-insured interest-bearing account in
      a
      national banking association or such other institution as Purchaser and Sellers
      may approve, and all interest accruing thereon shall be paid to the party
      entitled to the Deposit under the terms of the Agreement. We understand that
      you
      assume no responsibility for, nor will we hold you liable for, any loss accruing
      due to bank failure and/or takeover by a federal regulatory agency, or which
      arises solely from the fact that the escrow amount exceeds One Hundred Thousand
      Dollars ($100,000) and that the excess amount is not insured by the Federal
      Deposit Insurance Corporation. Nor shall you be required to institute legal
      proceedings of any kind pursuant to these instructions, nor be required to
      defend any legal proceedings which may be instituted against you with respect
      to
      the subject matter of these instructions unless you are requested to do so
      by
      Purchaser or Sellers and arrangements reasonably satisfactory to you have been
      made to indemnify you against the cost and expense of such defense by the party
      making such request. If any dispute shall arise with respect to these
      instructions, whether such dispute arises between the parties hereto or between
      the parties hereto and other persons, you may interplead such disputants. You
      shall be responsible only for the performance of such duties as are strictly
      set
      forth herein and in no event shall you be liable for any act or failure to
      act
      under the provisions of this letter except where such action or inaction is
      the
      result of your willful misconduct or gross negligence.

    


    Sellers
      and Purchaser each hereby agrees to indemnify you and hold you harmless against
      any loss, liability or damage (including the cost of litigation and reasonable
      counsel fees) incurred in connection with the performance of your duties
      hereunder except as a result of your willful misconduct or gross
      negligence.

    


    Please
      indicate your agreement to comply with the foregoing instructions by executing
      at least three copies of this letter and returning one to James
      L
      Ray, Esquire, Wolf, Block, Schorr & Solis-Cohen, 1650 Arch Street,
      Philadelphia, Pennsylvania 19102, telephone (215) 977-2218,
      counsel
      for Purchaser, and one to Martin C. Pomeroy, Esquire, Bernkopf Goodman LLP,
      125
      Summer Street, 13th
      Floor,
      Boston, Massachusetts
      02110,
      counsel
      for the Claremont Entities.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        
           

          
            
              	 	
                      SELLERS 

                    	 
	 	 	 	 
	 	
                      CLAREMONT
                        DC HOTEL LLC 

                    	 
	 	
                       

                    	 
	 	
                      By:

                    	
                      Claremont
                        Summer, Inc., its
                        Manager

                    	 
	 	 	 	 
	 	
                       

                    	
                      By:

                    	 
	
                       

                    
	 	 	
                       

                    	Michael
                      Cahill, President and Secretary	 


            

             

            
              	 	
                      CLAREMONT
                        DC HOTEL LLC 

                    	 
	 	
                       

                    	 
	 	
                      By:

                    	
                      Claremont
                        Summer, Inc., its
                        Manager

                    	 
	 	 	 	 
	 	
                       

                    	
                      By:

                    	 
	
                       

                    
	 	 	
                       

                    	Michael
                      Cahill, President and Secretary	 


            

            
               

              
                
                  	 	
                          APPLE
                            HOTEL, LLC 

                        	 
	 	 	 	 
	 	
                          By:

                        	 	 
	 	
                          Name:

                        	
                          Eliezer
                            H. Benbassat

                        	 
	 	
                          Title:

                        	
                          Manager

                        	 
	 	 	 	 


                

                 

                
                  	 	
                          APPLE
                            HOTEL HOLDINGS, LLC 

                        	 
	 	 	 	 
	 	
                          By:

                        	
                          
                          

                        	 
	 	
                          Name:

                        	
                          Eliezer
                            H. Benbassat

                        	 
	 	
                          Title:

                        	
                          Manager

                        	 


                

                
                   

                  
                    	 	
                            PURCHASER

                          	 
	 	 	 
	 	Hersha
                            Hospitality Trust	 
	 	 	 	 
	 	
                            By:

                          	
                             

                          	 
	 	
                            Name:

                          	
                            Neil
                              H. Shah

                          	 
	 	
                            Its:

                          	
                            Executive
                              Vice President

                          	 


                  

                  


                  
                    
                      
                        
                        

                      

                      
                        
                        

                        
                          

                        

                      

                      
                        
                        

                      

                    

                  

                   

                  
                    
                      	
                              ACKNOWLEDGED
                                AND AGREED: 

                            	 
	 	 	 
	 	 	 
	 	 	 
	
                              By:

                            	 	 
	
                              Name:

                            	 	 
	
                              Its:

                            	 	 
	 	 	 
	
                              Date:

                            	 	 


                    

                     

                  

                  
                    
                      
                      

                    

                    
                      
                      

                      
                        

                      

                    

                    
                      
                      

                    

                  

                   

                  EXHIBIT
                    F

                

              

            

          

        

      

    

    


    List
      of Proceedings

    


    None.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      G

     

    List
      of Contracts

     

    
      
        	
                Compcierge

              
	 
	
                Tyco/
                  Simplex Grinnell Contract

              
	 
	
                Reliant
                  Energy Agreement

              
	 
	
                BFI
                  Service Agreement

              
	 
	
                Micros
                  Contract

              
	 
	
                Galileo
                  Contract

              
	 
	
                KABA
                  Ilco Agreement

              
	 
	
                Dunbar
                  Service Contract

              
	 
	
                Commdec
                  Maintenance Agreement

              
	 
	
                Otis
                  Elevator Maintenance Agreement

              
	 
	
                Steritech
                  Agreement

              
	 
	
                Data
                  Valet Agreement

              
	 
	
                Townepark

              
	 
	
                Central
                  Parking Agreement

              


      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      



    EXHIBIT
      H

    


    List
      of Equipment Leases

     

    
      
        	
                Lanier
                  Copier Lease

              
	 
	
                Macke
                  Water Systems Equipment Lease 

              
	 
	
                Pitney
                  Bowes Equipment Lease 

              
	 
	
                OnCommand
                  Video Service Agreement

              
	 
	
                Sky
                  Television Inc.

              


      

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      I

     

    List
      of Permits

    


    


    
      


      
        	
                Special
                  Tax Stamp # 2004196-005-010

              
	 
	
                Certificate
                  of Occupancy # 15639

              
	 
	
                Certificate
                  of Occupancy # 84590

              
	 
	
                Basic
                  Business License - Swimming Pool # 38364xxxx-50006515

              
	 
	
                Basic
                  Business License - Food Establishment #
                  38364xxxx-50006519

              
	 
	
                Basic
                  Business License - Food Products # 38364xxxx-50006519

              
	 
	
                Basic
                  Business License - Hotel # 38364xxxx-50005467

              
	 
	
                Commercial
                  Elevator License # 40000255

              
	 
	
                Commercial
                  Elevator License # 40000262

              
	 
	
                Commercial
                  Elevator License # 40000264

              
	 
	
                Commercial
                  Elevator License # 40000265

              
	 
	
                In
                  House Agency Retailer License - Alcohol
                  #60463

              


      

       

      EXHIBIT
        J

    

    


    List
      of Environmental Reports

     

     

    Phase
      I
      Environmental Site Assessment Update 

    -
      Prepared by Schnabel Engineering North, LLC Dated July 6,2004


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      K

    


    Statements
      of Revenue

    


    
      
        	
                OPERATING
                  STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2002

              
	 
	
                OPERATING
                  STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2003

              
	 
	
                OPERATING
                  STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2004

              
	 
	
                YTD
                  OPERATING STATEMENT FOR THE PERIOD ENDING JUNE 30,
                  2005

              


      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    EXHIBIT
      L

    


    Form
      of Deed

    


     

    WARRANTY
      DEED

     

    This
      Warranty Deed, made this ___ day of September, in the year 2005, by


     

    
      
        

      

       

    

    
      
        

      

    

    (hereinafter,
      collectively, “Sellers”), 

    


    Witnesseth,
      that for and in consideration of the sum of Eighty-Five Million One Hundred
      Thousand and 00/100 ($85,100,000.00) Dollars and other good and valuable
      consideration paid to it, Sellers, as tenants in common, hereby grant to Hersha
      Hospitality Trust, a business trust organized in the State of Maryland, a fee
      simple interest in that piece or parcel of land, together with the improvements,
      rights, privileges and appurtenances to the same belonging, situate in the
      District of Columbia, known as Lot 858 in Square 20, being more fully described
      as follows, to wit:

    


    Part
      of
      Record Lot 52 in Square 250 in a subdivision made by 817 Fourteenth Street
      Associates Limited Partnership, and others per plat recorded in Liber No. 183
      at
      folio 117 among the Records of the Office of the Surveyor of the District of
      Colombia, and being more particularly described as follows:

    


    BEGINNING
      for the same at a point on the East right of way line of 14th
      Street,
      N.W., (110 feet wide), said point lying distant due North, 181.50 feet from
      the
      intersection with the North right of way line of H Street, N.W., (90 feet wide),
      said point being also the common front corner of former Lot 50 and 847 in said
      Square; thence, departing 14th
      Street,
      N.W., and running through, over and across Lot 52 so as to include a portion
      thereof, the following courses and distances:

    


    
      	 	
              11.

            	
              Due
                East, 110.50 feet to a point;
                thence

            


    

     

    
      	 	
              12.

            	
              Due
                South, 7.50 feet to a point, thence

            


    

     

    
      	 	
              13.

            	
              Due
                East, 14.50 feet to the Northwest corner of a 30-foot wide public
                alley in
                said Square, as shown on plat recorded in subdivision book 183 at
                page
                117, aforesaid; and thence, running with the East end of said public
                alley
                for the first 30 feet of length; thence


            


    

     

    
      	 	
              14.

            	
              Due
                South, 94.5 feet to a point; thence

            


    

     

    
      	 	
              15.

            	
              Due
                West, 29.00 feet to a point; thence

            


    

     

    
      	 	
              16.

            	
              Due
                South 18.00 feet to a point; thence

            


    

     

    
      	 	
              17.

            	
              Due
                West, 21.00 feet to a point; thence

            


    

     

    
      	 	
              18.

            	
              Due
                South 15.50 feet to a point; thence

            


    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      
        	 	
                19.

              	
                Due
                  West, 75.00 feet to a point on the aforementioned East right of
                  way line
                  of 14th
                  Street, N.W.; and thence running with said
                  line

              


      

       

      
        	 	
                20.

              	
                Due
                  North, 13.50 feet to the place of
                  beginning.

              


      

       

    

    NOTE:
      At
      the date hereof the above described land is designated on the Records of the
      Assessor of the District of Colombia for assessment and taxation purposes as
      Lot
      858 in Square 250.

     

    Part
      of
      Record Lot 52 in Square 250, District of Colombia, as per Plat of Subdivision
      made by 817 Fourteenth Street Associates Limited Partnership, recorded July
      31,
      1990, in Subdivision Book 183 at page 117 among the Records of the Office of
      the
      Surveyor of the District of Colombia; said part of Record Lot 52 being also
      shown, for purposes of assessment and taxation purposes as Lot 858 in Square
      250
      as shown on Assessment and Taxation Plat 3779-G dated October 3, 1995 on file
      among said Records; said part of Record Lot 52 taxed as Lot 858, being more
      particularly described as follows: 

     

    BEGINNING
      for the same at a “P.K.” nail set on the East line of 14th
      Street,
      N.W., (110 feet wide) said point lying DISTANT South 00 degrees 00’ 00” West,
      136.50 (per record) from South line of I Street, N.W., (90 feet wide) said
      point
      being also the common West corner of Lots 857 and 858 in Square 250 as shown
      among the aforesaid Records; and thence departing 14th
      Street,
      N.W., and running with the common dividing lines between said Lots 857 and
      858

     

    11. North
      90
      degrees 00’ 00” East, 110.50 feet (per record); thence

     

    12. South
      00
      degrees 00’ 00” West, 7.50 feet (per record); thence

     

    13. North
      90
      degrees 00’ 00” East 14.50 feet (per survey) to the Northwest corner of a 30
      feet wide Public Alley in said Square; thence departing Lot 857 and running
      with
      the West end of said Public Alley for the first 30 feet of distance and
      thereafter with the common dividing lines between Lots 858 and 46 in said
      Square.

     

    14. South
      00
      degrees 00’ 00” West, 95.125 feet (per Assessor’s Plat), 94.93 feet (per
      survey); thence

     

    15. South
      90
      degrees 00’ 00” West, 29.00 feet (per record), South 89 degrees 35’ 52” West,
      29.16 feet (per survey); thence

     

    16. South
      00
      degrees 00’ 00” West, 18.00 feet (per record), South 00 degrees 08’ 00’ West,
      18.00 feet (per survey); thence

     

    17. North
      90
      degrees 00’ 00” West, 21.00 feet (per record), North 89 degrees 52’ 00” West,
      21.02 feet (per survey); thence

     

    18. South
      00
      degrees 00’ 00” West, 15.50 feet (per record), South 00 degrees 08’ 00” West,
      15.22 feet (per survey); thence

     

    19. South
      90
      degrees 00’ 00” West, 75.00 feet (per record), 75.11 feet (per D.C. measurement
      to “P.K.” nail set on the aforementioned East line of 14th
      Street,
      N.W., at the common West corner of Lots 858 and 46 in said Square; thence
      departing Lot 46 and running with said East line of 14th
      Street,
      N.W.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    20. North
      00
      degrees 00’ 00” East, 136.12 feet (per Assessor’s Plat), 135.82 feet (per
      survey) to the place of the beginning.

     

    


    [signatures
      are continued on the next page]


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                Executed
                  as a sealed instrument this ____ day of _______,
                  2005. 

              


      

       

      
        	 	 	 	 
	 	 	
                 

              	 
	 	 	  
	 	 	 	 
	
                 

              	 	
                By:

              	
                 

              
	
                Witness

              	 	
                Name:
                  

              	
                 

              
	 	 	
                Title:
                  

              	
                 

              
	 	 	 	 


      

    

    


    


    


    


    COMMONWEALTH
      OF MASSACHUSETTS

    


    


    ______________,
      ss.

    


    


    On
      this
      _____ day of September, 2005, before me, the undersigned notary public,
      personally appeared ____________________, proved to me through satisfactory
      evidence of identification, which was ____________________________________,
      to
      be the person whose name is signed on the preceding or attached document, and
      acknowledged to me that he/she signed it voluntarily for its stated purpose
      as
___________________
      of _____________________________________, Trustee
      of ______________________________ Trust. 

     

    
      
        	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	
                 

              	NOTARY
                PUBLIC  
	 	
                [Affix
                  Notarial Seal]

              	 	 	 	 
	 	 	
                 

              	Printed
                Name: 	 
	 	 	
                 

              	My
                Commission Expires: 	 


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      M

    


    Form
      of Bill of Sale

    


    BILL
      OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT

    


    


    THIS
      BILL
      OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Bill of Sale”) is entered
      into as of ________ __, 2005 by and between Claremont DC Hotel LLC, Claremont
      DC
      Hotel II LLC, Apple Hotel, LLC, Apple Hotel Holdings, LLC and Apple Hotel
      Investments, LLC (collectively “Assignor”), and
      ____________________________________, a _________________________ with its
      principal offices at ________________________________________________
      (“Assignee”).

    


    FOR
      GOOD
      AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby
      acknowledged, the parties hereto agree as follows:

    


    1. All
      capitalized terms used herein without definition shall have the meanings given
      them in that certain Purchase and Sale Agreement between Assignor and Assignee
      dated as of August
      ___,
      2005 (the “Purchase Agreement”) for the sale by the Assignor to the Assignee of
      the ____________________________________________________________in
      ______________ County, _____________ (the “Hotel”).

    


    2. Assignor
      hereby unconditionally gives, grants, bargains, sells, assigns, contributes,
      transfers, conveys, and delivers to Assignee, and Assignee accepts and assumes,
      all of Assignor’s right, title, and interest, whether now existing or hereafter
      acquired in, to, and under the following:

    


    (a) all
      personal property owned, leased, or used by Assignor in connection with the
      operation or maintenance of, located on or about, or otherwise related to the
      Hotel, including all FF&E, all Fixed Asset Supplies and all
      Inventories;

    


    (b) all
      Contracts; 

    


    (c) all
      Equipment Leases; 

    


    (d) all
      Space
      Leases (collectively, items (a) through (d), the “Property”);

    


    (e) all
      Permits;

    


    (f) the
      balances on deposit on the date hereof of all FF&E and other similar
      reserves required under the Management Agreement

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (g) all
      records, files, documents, plans, specifications, permits, certificates of
      title, guest lists and other instruments and records of whatsoever kind or
      nature related to any of the foregoing and in Assignor’s possession or control;
      and

    


    (h) all
      rights, claims, choses in action or other interests of Assignor in, related
      to,
      or arising out of any of the foregoing with respect to the period on or after
      the date hereof.

    


    PROVIDED,
      HOWEVER, that any alcoholic beverages that under the law of the state in which
      the Hotel are located may not legally be transferred from Assignor to Assignee
      are excepted and excluded from the conveyance by Assignor to Assignee and from
      this Bill of Sale;

    


    Assignee,
      by its execution hereof, does hereby (i) assume and agree to perform and
      discharge all obligations of the Assignor under the Contracts and Equipment
      Leases from and after the date hereof and (ii) agree to hold Assignor harmless
      and indemnify and defend Assignor from all liabilities, obligations, duties,
      claims, causes of action, losses, damages, suits, judgments and expenses
      (including, without limitation, attorneys’ fees and costs of litigation) arising
      or accruing under the Contracts, Equipment Leases on or after the date hereof;
      provided,
      however,
      that by
      the execution and delivery of this instrument, Assignor agrees to hold Assignee
      harmless and indemnify and defend Assignee from all liabilities, obligations,
      duties, claims, causes of action, losses, damages, suits, judgments and expenses
      (including, without limitation, attorneys’ fees and costs of litigation) arising
      or accruing under the Contracts and Equipment Leases prior to the date hereof
      and with respect to any contracts that were not assumed by Purchaser, regardless
      of when such claim arose.

    


    This
      Bill
      of Sale is subject in its entirety to the terms and conditions of the Purchase
      Agreement. To the extent the terms and conditions hereof and thereof are
      inconsistent, the terms and conditions of the Purchase Agreement shall
      control.

    


    This
      Bill
      of Sale shall be governed by the laws of the District of Columbia (except for
      the choice of law provisions thereof).

    


    This
      Bill
      of Sale may be executed in separate counterparts, none of which need contain
      the
      signatures of all parties, each of which shall be deemed to be an original,
      and
      all of which taken together constitute one and the same instrument. It shall
      not
      be necessary in making proof of this Bill of Sale to produce or account for
      more
      than the number of counterparts containing the respective signatures of, or
      on
      behalf of, all of the parties hereto.

    


    If
      any
      part of this Bill of Sale is declared invalid by a court of competent
      jurisdiction, this Bill of Sale shall be construed as if such part did not
      exist, and the balance thereof shall be given full effect.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      


      IN
        WITNESS WHEREOF, Assignor and Assignee have executed this Bill of Sale as
        of the
        date first written above.

       

    

    
      
        	 	 	 	
                ASSIGNOR: 

              	 	 
	 	 	 	 	 	 	 
	
                WITNESS/ATTEST: 

              	 	
                CLAREMONT
                  DC HOTEL LLC   

              
	 	 	 	 	 	 	 
	
                By:

              	
                 

              	 	
                By:

              	   
	
                Name:

              	
                 

              	
                 

              	 	
                Claremont
                  Summer, Inc., its Manager  

              
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	
                By:

              	
                 

              
	 	 	 	 	 	
                Michael
                  Cahill, President and Secretary 

              
	 	 	 	 	 	 	 
	
                WITNESS/ATTEST: 

              	 	
                CLAREMONT
                  DC HOTEL II LLC   

              
	 	 	 	 	 	 	 
	
                By:

              	
                 

              	 	
                By:

              	
                  

              
	
                Name:

              	 	 	 	
                Claremont
                  Summer, Inc., its Manager  

              
	
                 

              	 	 	 	 	 	 
	 	 	 	 	
                By:

              	  
	 	 	 	 	 	
                Michael
                  Cahill, President and Secretary 

              
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
                WITNESS/ATTEST: 

              	 	
                APPLE
                  HOTEL, LLC   

              
	 	 	 	 	 	 	 
	
                By:

              	
                 

              	 	
                By:

              	   
	
                Name:

              	          
                	 	 	
                Eliezer
                  H. Benbassat, Manager  

              
	 	 	 	 	 	 	 
	
                WITNESS/ATTEST: 

              	 	 	 	 	 
	 	 	 	
                APPLE
                  HOTEL HOLDINGS, LLC   

              
	
                By:

              	 	 	 	 	 	 
	
                Name:

              	 	 	
                By:

              	   
	 	
                 

              	 	 	
                Eliezer
                  H. Benbassat, Manager  

              
	
                 

              	 	 	 	 	 	 
	
                WITNESS/ATTEST: 

              	 	 	 	 	 
	 	 	 	
                APPLE
                  HOTEL INVESTMENTS, LLC   

              
	
                By:

              	
                 

              	 	 	 	 	 
	
                Name:

              	
                 

              	 	
                By:

              	
                  

              
	 	 	 	 	
                Eliezer
                  H. Benbasset,
                  Manager  

              


      

    

     

    [SIGNATURES
      ARE CONTINUED ON THE NEXT PAGE]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      	 	 	 	
              ASSIGNEE: 

            
	 	 	 	
               

            	 
	 	 	 	 	 
	 	 	 	 	 
	
              WITNESS/ATTEST:

            	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
              By:

            	 	 	
              By:

            	
               

            
	
              Name:

            	 	 	
              Name:

            	 
	 	 	 	
              Its:

            	
               

            
	
              [SEAL]