Document:

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                                                                    Exhibit 10.2

                            LLC MEMBERSHIP INTERESTS

                               PURCHASE AGREEMENT

                          dated as of February __, 2005

                                     between

                                PUSHPA H. THAKKAR

                                 BHARTI D. DESAI

                                MALAY H. THAKKAR

                                 KUSH H. THAKKAR

                                  NEEL D. DESAI

                                 TEJAL D. DESAI

                                   as Sellers,

                                       and

                     HERSHA HOSPITALITY LIMITED PARTNERSHIP

                                  as Purchaser

                  IN CONNECTION WITH THE SALE AND PURCHASE OF
    MEMBERSHIP INTERESTS IN LTD ASSOCIATES TWO, LLC, OWNER OF RESIDENCE INN
                      WILLIAMSBURG, WILLIAMSBURG, VIRGINIA

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<PAGE>
                   LLC MEMBERSHIP INTERESTS PURCHASE AGREEMENT
                   -------------------------------------------

          THIS  LLC  MEMBERSHIP  INTERESTS  PURCHASE  AGREEMENT, dated as of the
______  day  of  February,  2005,  (the  "Agreement") between PUSHPA H. THAKKAR,
BHARTI  D.  DESAI, MALAY H. THAKKAR, KUSH H. THAKKAR, NEEL D. DESAI and TEJAL D.
DESAI, members of LTD Associates Two, LLC, on the one hand (collectively, each a
"Sellers,  and  collectively,  the  "Sellers"),  and  HERSHA HOSPITALITY LIMITED
PARTNERSHIP, a Virginia limited partnership (the "Purchaser"), provides:

                                    ARTICLE I
                                    ---------

                       DEFINITIONS; RULES OF CONSTRUCTION
                       ----------------------------------

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

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

          "Articles  of Organization" shall mean the Articles of Organization of
           -------------------------
the  LLC  filed  with the Commonwealth of Virginia State Corporation Commission,
true and correct copies of which are attached hereto as Exhibit F.
                                                        ---------

          "Assignment  and  Assumption  Agreement"  shall  mean  any  and  all
           --------------------------------------
Assignment  and  Assumption  Agreements,  dated  as  of  the Closing Date by and
between  Sellers  and  Purchaser.

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

          "Closing"  shall  mean  the  closing  of  the sale and purchase of the
           -------
Interests  pursuant  to  this  Agreement.

          "Closing  Date"  shall  mean  the  date  on  which the Closing occurs.
           -------------

          "Consideration"  shall  be  determined  by subtracting the outstanding
           -------------
principal  balance  of  the  Existing  Financing  as  of  Closing  from  the LLC
Valuation,  and  multiplying  the  balance  by  75%

          "Continuing  Liabilities"  shall include liabilities arising under the
           -----------------------
Existing  Financing  (defined  in  Section  3.10)  and  the Operating Agreements
(defined  hereafter) on and subsequent to the Closing Date, or proration credits
at  Closing,  but  shall  exclude  any  liabilities  arising  from  any  other
arrangement,  agreement, loan agreements, hotel management agreement, or pending
litigation.

          "Contributed  Equity"  shall  mean  the  equity contribution that each
           -------------------
party  shall  be  deemed  to  have  made  on the Closing Date and throughout the
investment  period.  As  a  matter  of  example,  Purchaser's  preferred  equity
contribution shall include the Consideration and Purchaser's contribution toward
the  FF&E reserve and any other additional contribution made on the Closing Date
and  throughout  the  investment  period.

          "Deposit"  shall  mean  the  amount of Two Hundred Thousand and No/100
           -------
($200,000.00)  Dollars.

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

          "Escrow Agent" shall mean Equity Title Company, with an address of 200
           ------------
Golden Oak Court, Suite 100A, Virginia Beach, VA 23452.

          "Existing Financing" shall have the meaning set forth in Section 3.10.
           ------------------

          "FIRPTA  Certificate"  shall  mean  the affidavit of the Sellers under
           -------------------
Section 1445 of the Internal Revenue Code certifying that such Sellers are not a
foreign  corporation,  foreign  partnership,  foreign limited liability company,
foreign  trust,  foreign estate or foreign person (as those terms are defined in
the Internal Revenue Code and the Income Tax Regulations), in form and substance
satisfactory  to the Purchaser for each Seller who is not a foreign corporation,
foreign  partnership,  foreign limited liability company, foreign trust, foreign
estate  or  foreign  person.

                                        2
<PAGE>
          "Governmental  Body" shall mean any federal, state, municipal or other
           ------------------
governmental  department,  commission, board, bureau, agency or instrumentality,
domestic  or  foreign.

          "Gross  Revenues"  shall mean all room revenues from Hotel operations,
           ---------------
including,  but  not limited to, room revenues, revenues from food and beverage,
revenues  from  telecommunication  service,  and  revenues  from  other operated
departments,  rentals,  and  other  business  activities.

          "Hotel"  shall  mean the 108-room Residence Inn Williamsburg hotel and
           -----
related  amenities  located  on  the  Land.

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

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

          "Intangible  Personal  Property"  shall  mean  all intangible personal
           ------------------------------
property  owned  or  possessed  by  the  Sellers and used in connection with the
ownership,  operation,  leasing,  occupancy  or  maintenance  of  the  Property,
including, without limitation, the Authorizations, general intangibles, business
records,  plans  and  specifications,  surveys  and  title  insurance  policies
pertaining  to  the  real property and the personal property, all other licenses
which  are transferable, permits and approvals with respect to the construction,
ownership,  operation,  leasing,  occupancy  or maintenance of the Property, any
unpaid award for taking by condemnation or any damage to the Land by reason of a
change of grade or location of or access to any street or highway.

          "Interests"  shall  mean  75%  of all right, title and interest in the
           ---------
Pushpa  Interest, Bharti Interest, Malay Interest, Kush Interest, Neel Interest,
and  Tejal  Interest,  consisting,  in the aggregate, of a 75% limited liability
company  interest  in  the  LLC.

          "Pushpa  Interest"  shall mean all right, title and interest of Pushpa
           ----------------
H.  Thakkar  in  the  LLC, consisting of a 10% limited liability interest in the
LLC.

          "Bharti  Interest"  shall mean all right, title and interest of Bharti
           ----------------
D.  Desai in the LLC, consisting of a 10% limited liability interest in the LLC.

          "Malay  Interest" shall mean all right, title and interest of Malay H.
           ---------------
Thakkar  in  the LLC, consisting of a 20% limited liability interest in the LLC.

          "Kush  Interest"  shall  mean all right, title and interest of Kush H.
           --------------
Thakkar  in  the LLC, consisting of a 20% limited liability interest in the LLC.

          "Neel  Interest"  shall  mean all right, title and interest of Neel D.
           --------------
Desai  in  the  LLC,  consisting of a 20% limited liability interest in the LLC.

                                        3
<PAGE>
          "Tejal  Interest" shall mean all right, title and interest of Tejal D.
           ---------------
Desai  in  the  LLC,  consisting of a 20% limited liability interest in the LLC.

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

          "Knowledge"  shall  mean  the  actual  knowledge  of  the  Sellers.
           ---------

          "Land"  shall  mean that certain parcel of real estate lying and being
           ----
in  the  City  of Williamsburg, Virginia, with an address of 1648 Richmond Road,
Williamsburg,  VA  23185,  as  more particularly described on Exhibit A attached
                                                              ---------
hereto,  together with all easements, rights, privileges, remainders, reversions
and appurtenances thereunto belonging or in any way appertaining, and all of the
estate,  right,  title,  interest,  claim  or  demand  whatsoever of the Sellers
therein,  in  the  streets  and  ways  adjacent thereto and in the beds thereof,
either  at  law  or  in  equity,  in  possession or expectancy, now or hereafter
acquired.

          "LLC" shall mean LTD Associates Two, LLC, a Virginia limited liability
           ---
company that owns, as its only assets, land and hotel improvements consisting of
a  108-room  Residence  Inn  Williamsburg  situated in the City of Williamsburg,
Virginia.

          "LLC  Operating Agreement" shall mean the current operating agreement,
           ------------------------
and  any  amendments  and  modifications thereto, of the LLC, a true and correct
copy of which is attached hereto as Exhibit D.
                                    ---------

          "LLC  Valuation"  shall  mean a valuation of $16,000,000.00 for all of
           --------------
the  LLC  including  the  Hotel, Intangible Personal Property, Tangible Personal
Property,  and Real Property, and any other assets in connection with the Hotel.

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

          "Owner's Title Policy" shall mean an owner's policy of title insurance
           --------------------
or  the  applicable  endorsement  issued to the LLC, pursuant to which the LLC's
ownership  of  fee  simple  title to the Real Property is insured (including the
marketability  thereof) subject only to Permitted Title Exceptions.  The Owner's
Title Policy shall be acceptable in form and substance to the Purchaser, and, in
the  event  such Owner's Title Policy is not acceptable to Purchaser, Purchaser,
at  its  sole  discretion, may obtain a new owner's policy of title insurance at
its  own  cost  and  expense.  The  description of the Land in the Owner's Title
Policy  shall  be  by  courses  and  distances  and  shall  be  identical to the
description  shown  on  a  survey  provided  by  the  Sellers  to the Purchaser.

          "Permitted  Title  Exceptions" shall mean those exceptions to title to
           ----------------------------
the  Real Property that are satisfactory to the Purchaser as determined pursuant
to Section 2.2.
   -----------

                                        4
<PAGE>
          "Property"  shall  mean  collectively  the  Land,  Improvements,  the
           --------
Inventory,  the  Reservation  System,  the  Tangible  Personal  Property and the
Intangible  Personal  Property.

          "Real  Property"  shall  mean  the  Land  and  the  Improvements.
           --------------

          "Reservation  System" shall mean the Sellers' Reservation Terminal and
           -------------------
Reservation  System  equipment  and  software  (other  than  the  LTD Management
proprietary  system),  if  any.

          "Study  Period"  shall  mean the period commencing at 9:00 a.m. on the
           -------------
date hereof, and continuing through 5:00 p.m. on March 15, 2005.

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

          "Title  Company"  shall mean All American Abstract Company, Inc., with
           --------------
an address at 1260 Valley Forge Road, Suite 111, Phoenixville, PA 19460.

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

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

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

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

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

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

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

                                        5
<PAGE>
                                   ARTICLE II
                                   ----------

                        PURCHASE AND SALE; STUDY PERIOD;
                        --------------------------------
                            PAYMENT OF CONSIDERATION
                            ------------------------

     2.1     Purchase  and Sale.  Each of the Sellers agrees to sell, assign and
             ------------------
transfer  its  respective  Interests,  in  aggregate,  to  the Purchaser and the
Purchaser  agrees  to  purchase  the  Sellers'  Interests  in  exchange  for the
Consideration  and  in  accordance with the other terms and conditions set forth
herein.

     (a)  The Consideration shall be paid as follows:

          (i)     Upon  the  execution and delivery of this Agreement, Purchaser
          shall deposit the Deposit in an interest bearing account, which is and
          shall  be  fully  refundable  in  accordance  with the provisions with
          respect  to  the  refund  thereof  as  set  forth  in  this Agreement,
          including, without limitation, unsatisfactory results of Study Period,
          in  Purchaser's  sole  discretion,  and/or  default  by  any  Sellers
          hereunder;

          and

          (ii)     The  balance  of  the Consideration, subject to adjustment as
          provided  in  this  Agreement,  shall be paid by the Purchaser by wire
          transfer to the Sellers or such payee as the Sellers may direct at the
          Closing.  The Sellers shall provide Purchaser on or before the Closing
          with Sellers wiring instructions for the payment of the Consideration.

     (b)  The Consideration shall be held by Equity Title Company to be released
          to  Sellers upon delivery of the certificates, documents, instruments,
          agreements  and  other  closing deliveries required by this Agreement.

     2.2     Study  Period.  (a)  The  Purchaser shall have the right, until the
             --------------
end  of the Study Period, to enter upon the Real Property and to perform, at the
Purchaser's  expense,  such  economic,  surveying,  engineering,  environmental,
topographic and marketing tests, studies and investigations as the Purchaser may
deem  appropriate  provided  Purchaser  gives  Sellers at least twenty-four (24)
hours  notice  prior  to  entering  on  the  Real Property.  The Purchaser shall
investigate  the  Property  and  the  LLC, including, without limitation, a full
environmental  due  diligence  audit  and investigation of the Property and UCC,
lien,  litigation,  judgment  and  bankruptcy  searches  on  the  LLC.  Promptly
following the signing of the Agreement by both parties, Sellers shall provide to
Purchaser  access to all information in connection with the Property and the LLC
as  required  by  Purchaser.  Information  shall  include  tax  returns,  books,
accounts,  records,  contracts, financial reports and statements, organizational
documents  of  the  LLC  including  all  amendments  thereto,  if any, and other
relevant  documents  for  completing  the  transactions  contemplated  in  this
Agreement.  If  such  tests,  studies  and  investigations  warrant,  in  the
Purchaser's  sole,  absolute  and  unbelievable  discretion, the purchase of the
Interests for the purposes contemplated by the Purchaser, then the Purchaser may
elect  to  proceed  to  Closing  and

                                        6
<PAGE>
shall so notify the Sellers prior to the expiration of the Study Period.  If for
any  reason the Purchaser does not so notify the Sellers of its determination to
proceed  to  Closing  prior  to  the  expiration  of the Study Period, or if the
Purchaser notifies the Sellers, in writing, prior to the expiration of the Study
Period that it has determined, for any reason, and in Purchaser's sole, absolute
and  unbelievable  discretion,  not  to  proceed  to  Closing,  this  Agreement
automatically  shall  terminate,  and  the  Purchaser shall be released from any
further  liability  or  obligation  under  this Agreement other than Purchaser's
indemnification obligations given pursuant to this paragraph which shall survive
termination  of  this  Agreement, and the Deposit together with interest accrued
thereon  shall  be immediately refunded to Purchaser.  Purchaser shall indemnify
Sellers'  and  the  LLC  for  any  loss,  damage  or  liabilities arising our of
activities  relating to the Study Period and Purchaser shall obtain an insurance
policy, in amounts and with a company, satisfactory to Sellers naming the LLC as
an  additional  insured  prior  to  entry  upon  the  Property.

     (b)     During  the  Study  Period, the Sellers shall make available to the
Purchaser,  its  agents, auditors, engineers, attorneys and other designees, for
inspection  copies  of  all  existing  architectural  and  engineering  studies,
surveys,  title  insurance  policies,  zoning  and  site  plan  materials,
correspondence,  environmental  audits, environmental report, zoning compliance,
financial  reports  from the date of commencement of hotel operations, franchise
agreement,  existing  management  agreement,  deed  and  operating  and services
contracts,  and  all  of  the  organizational documents of the LLC including all
amendments  thereto,  if any, and other related materials or information if any,
relating  to  the  Property  and  the  LLC.

     (c)     During  the  Study Period, the Purchaser, at its expense, may cause
an examination of title to the Property to be made, and, prior to the expiration
of  the  Study Period, shall notify the Sellers of any defects in title shown by
such  examination  that the Purchaser is unwilling to accept.  The Sellers shall
notify  the  Purchaser  whether  the  Sellers  are willing to cure such defects.
Sellers  may  cure,  but  shall  not  be obligated to cure such defects.  If the
Sellers  are  unwilling  or  unable  to  cure  any  such defects by Closing, the
Purchaser  shall  elect (1) to waive such defects and proceed to Closing without
any  abatement  in  the  Consideration  or  (2)  to terminate this Agreement and
receive  a  return of the Deposit with interest thereon.  The Sellers shall not,
after  the  date  of  this  Agreement  and  until termination of this Agreement,
subject  the  Property  to and shall take all reasonable best efforts to prevent
the  Property  from  being  subjected  to  any  liens,  encumbrances, covenants,
conditions,  restrictions,  easements  or other title matters or seek any zoning
changes  or take any other action which may affect or modify the status of title
without  the  Purchaser's  prior  written  consent,  which  consent shall not be
unreasonably withheld or delayed.  All title matters revealed by the Purchaser's
title examination and not cured by the Sellers as provided above shall be deemed
Permitted Title Exceptions.  If Purchaser shall fail to examine title and notify
the  Sellers  of  any  such title objections by the end of the Study Period, all
such  title  exceptions (other than those rendering title unmarketable and those
that  are  to  be  paid  at  Closing  as provided above and other than any title
exceptions  first  appearing  after  the  date of Purchaser's title examination)
shall  be  deemed  Permitted  Title  Exceptions.

     (d)     Within  ten  (10) days of the signing of the this Agreement by both
parties,  Sellers  shall  provide  Purchaser  with  copies of existing franchise
agreement,  roof  warranties,  existing  mortgage  and  loan  documents, audited
financial  statements,  and  HVAC  service  records  and

                                        7
<PAGE>
warranties,  an  as-built  ALTA  survey,  the existing owner's title policy, any
existing  mortgage  policy,  environmental  report, zoning compliance, financial
reports  from  the  date  of  the  opening  of  the  Hotel,  existing management
agreement,  deed  and  operating  and  services  contracts,  and  all  of  the
organizational  documents  of  the LLC including all amendments thereto, if any.
In  the event that the environmental report is more than one year old, Purchaser
may order a new environmental report and any cost and expense in connection with
such new environmental report shall be borne by the LLC in the event the Closing
occurs.

     (e)     During  the  Study  Period,  at Purchaser's sole costs and expense,
Purchaser  may  cause  a  property  condition  assessment to be performed on the
Property  ("Property  Condition  Assessment").

     (f)     During  the Study Period, Purchaser shall have an absolute right to
complete  its  investigation  of  the  Property  and  the  LLC  to  its absolute
satisfaction,  and  in  the  event,  the  results  of  the  investigation  are
unsatisfactory in any respect to Purchaser, then Purchaser shall have the option
to  terminate  the  Agreement  without  liability,  and  the  Deposit  shall  be
immediately  refunded  in  full  to  Purchaser.

     (g)     During  the  Study  Period, Purchaser and Sellers shall contact the
Licensor, and obtain tentative approval of the transfer of the franchise license
to  the  Lessee  (defined  hereafter in Section 3.25), and Sellers and Purchaser
shall  use  diligent efforts to cooperate with Licensor to obtain such approval.

     (h)     Purchaser  and  Sellers agree that, in the event any of the Sellers
intend to sell any of their respective membership interests in the LLC after the
Closing  Date, Purchaser shall have the first right of refusal and, in the event
Purchaser  intends  to sell any of its membership interests in the LLC after the
Closing  Date,  Sellers  shall  have  the first right of refusal.  Such buy-sell
provisions  shall be incorporated in an Amended and Restated Operating Agreement
for  the  LLC  (the  "JV  Agreements")  to  be entered into by the Purchaser and
Sellers at Closing, and such JV Agreements shall incorporate all essential terms
of  this  Agreement.

     (i)     During  the Study Period, Purchaser shall make available to Sellers
and  Sellers' attorney copies of Purchaser's organizational documents, including
all  amendments  thereto.

     (j)     During  the  Study  Period,  Purchaser shall have the right, at its
expense,  to  audit  the books, records, and financial control procedures of the
LLC  with  respect  to  the  Hotel.

                                   ARTICLE III
                                   -----------

               SELLERS' REPRESENTATIONS, WARRANTIES AND COVENANTS
               --------------------------------------------------

          To  induce  the Purchaser to enter into this Agreement and to purchase
the  Property,  the  Sellers  hereby  jointly  and  severally make the following
representations,  warranties  and  covenants,  upon  each  of  which each of the
Sellers  acknowledges  and  agrees  that  the

                                        8
<PAGE>
Purchaser is entitled to rely and has relied upon:

     3.1     Identity  and  Power.  Each of the Sellers is and has all requisite
             --------------------
powers  and  all  governmental  licenses, authorizations, consents and approvals
necessary  to  carry on his or her respective business as now conducted, to own,
lease and operate his or her respective membership interest and Interests in the
LLC,  to  execute  and  deliver  this  Agreement  and any document or instrument
required  to  be  executed  and delivered on behalf of the Sellers hereunder, to
perform  his  obligations  under  this Agreement and any such other documents or
instruments and to consummate the transactions contemplated hereby; and

     3.2     Authorization,  No  Violations  and  Notices.
             --------------------------------------------

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

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

               (i)     except  for  the  terms  of  the LLC's Existing Financing
          Documents  (as  defined  in  Section 3.10), the License (as defined in
          Section  3.25)  and  the LLC's liquor license, violate, conflict with,
          result  in  a  breach of any provision of, constitute a default (or an
          event  that,  which, with or lapse of time or both, would constitute a
          default)  under,  result  in  the  termination  of,  accelerate  the
          performance  required  by,  or  result  in  a  right of termination or
          acceleration,  or the creation of any lien, security interest, charge,
          or  encumbrance  upon  any of the Property or assets of the LLC, under
          any  of  the  terms,  conditions,  or  provisions  of, the Articles of
          Organization  of  such  Sellers  (if  applicable),  the  LLC Operating
          Agreement,  license,  lease,  agreement,  or  other  instrument,  or
          obligation  to  which  the  LLC is a party, or by which the LLC may be
          bound,  or  to which the LLC or the Property or assets may be subject;
          or

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

     3.3     Litigation  with  respect  to  Sellers.  There  is no action, suit,
             --------------------------------------
claim  or  proceeding  pending  or  to Sellers' knowledge, threatened against or
affecting  any of the Sellers or any of the Sellers' assets in any court, before
any  arbitrator  or  before  or  by  any  governmental  body or other regulatory
authority  (i)  that  would  adversely  affect  such Sellers or their respective
Interests,  (ii)

                                        9
<PAGE>
that  seeks  restraint,  prohibition, damages or other relief in connection with
this Agreement or the transactions contemplated hereby, or (iii) would delay the
consummation  of  any  of  the  transactions  contemplated  hereby.  None of the
Sellers  is  subject  to  any judgment, decree, injunction, rule or order of any
court  relating  to such Seller's participation in the transactions contemplated
by  this  Agreement.

     3.4     Interests  and  Property.
             ------------------------

          (a)     The  Interests  will be on the Closing Date, free and clear of
all  liens  and  encumbrances and each of the Sellers has good, marketable title
thereto  and  the  right  to  convey  same  in accordance with the terms of this
Agreement.  Upon delivery of the Sellers' Assignment and Assumption Agreement to
the  Purchaser  at  Closing,  good  valid and marketable title to each and every
Sellers'  respective  Interests,  free  and clear of all liens and encumbrances,
will  pass  to the Purchaser. The Interests and Sellers' remaining 25% interests
in the LLC constitute the only outstanding securities of the LLC. On the Closing
Date,  there  shall  be  no pledge, lien or encumbrance on any of the membership
interests  in  the  LLC.

          (b)     The  Property  will  be on the Closing Date, free and clear of
all  liens  and  encumbrances, except for the Permitted Title Exceptions and the
lien  of  the  existing  deed  of  trust, and the LLC has good, marketable title
thereto  and  the  right to convey same.  The LLC is the fee simple owner of the
Real Property and the sole owner of the Property.

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

     3.6     Brokerage  Commission.  The  Sellers  have  engaged the services of
             ---------------------
Doug Henkel of CB Richard Ellis as its broker and will be solely responsible for
any  brokerage  or finder's fee, commission or other amount  due to said broker.

     3.7     The  LLC.
             --------

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

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

               (i)     except  for  the  terms  of  the LLC's Existing Financing
          Documents, the License and the LLC's liquor license, violate, conflict
          with, result in a breach of any provision of, constitute a default (or
          an  event that, with notice or lapse of time or both, would constitute
          a  default)  under,  result  in  the  termination  of,  accelerate the
          performance  required  by,  or  result  in  a  right of termination or
          acceleration,  or the creation of any lien, security interest, charge,
          or  encumbrance

                                       10
<PAGE>
          upon  any of the Property or other assets of the LLC, under any of the
          terms,  conditions,  or provisions of, the Articles of Organization of
          the  LLC  or  LLC  Operating Agreement, or any note, , license, lease,
          agreement,  or  other  instrument  or obligation to which the LLC is a
          party,  or  by  which the LLC may be bound, or to which the LLC or its
          properties  or  assets  may  be  subject;  or

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

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

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

     3.8     Liabilities,  Debts  and  Obligations.  Except  for  the Continuing
             -------------------------------------
Liabilities  on  the  Closing  Date,  the LLC will have no liabilities, debts or
obligations  which  have  not  been  assumed  by  Sellers.

     3.9     Tax  Matters  with  respect  to  LLC.
             ------------------------------------

          (a)     The  Sellers  have caused the LLC to file, and shall cause the
LLC  to file all income tax information returns on IRS Form 1065 (including K-1s
for  each member) and applicable state and local income tax forms required to be
filed  with  the  United  States  Government  and  with all states and political
subdivisions  thereof  where any such returns are required to be filed and where
the  failure  to  file  such  return or report would subject the LLC or its sole
member the Sellers, to any material liability or penalty.  All taxes (other than
sale  taxes,  rental taxes or the equivalent and real property taxes) imposed by
the  United  States,  or  by any foreign country, or by any state, municipality,
subdivision,  or  instrumentality of the United States or of any foreign country
or by any other taxing authority, which are due and payable by the LLC have been
paid  in  full or adequately provided for by reserves shown in their records and
books  of  account  and  in  the  LLC's  financial information.  The LLC has not
obtained  or  received  any  extension of time (beyond the Closing Date) for the
assessment  of  deficiencies  for any years or waived or extended the statute of
limitations  for  the  determination or collection of  any tax.  To the Sellers'
Knowledge,  no  unassessed  tax deficiency is proposed or threatened against the
LLC.

          (b)     All  taxes,  rental  taxes or the equivalent, and all interest
and  penalties  due  thereon,  required  to  be  paid or collected by the LLC in
connection  with  the operation of the Property as of the Closing Date will have
been  collected  and/or  paid  to  the  appropriate governmental authorities, as
required  or such amounts shall be pro-rated as of the Closing Date. The Sellers
shall  cause the LLC to file, all necessary returns and petitions required to be
filed  through the Closing Date.  The Sellers shall cause the LLC to prepare and
file  all  federal  and

                                       11
<PAGE>
state  income  tax returns for the tax period  ending on the Closing Date, which
shall reflect the termination for tax purposes of the LLC.

     3.10     Contracts  and Agreements.  There is no loan agreement, guarantee,
              -------------------------
note,  bond,  indenture  and  other debt instrument, lease and other contract to
which  the  LLC is a party or by which its assets are bound other than Permitted
Title  Exceptions,  the  Operating Agreements, and the loan documents respecting
that  certain  financing  by  and among the LLC and the lender with the existing
mortgage  on  the  Property  (the  "Lender")  with  an  outstanding  balance  of
approximately  $8,700,000.00  (the  "Existing  Financing  Documents"  and  the
"Existing  Financing", respectively), and such Existing Financing shall continue
to  be  the  debt  of  the LLC after the Closing with the consent of the Lender.

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

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

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

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

                                       12
<PAGE>
     3.15     Insurance.  All  of  the LLC's Insurance Policies are valid and in
              ---------
full force and effect, all premiums for such policies were paid when due and the
Sellers  shall  cause the LLC to pay all future premiums for such policies up to
the  Closing  Date  (and  any  replacements  thereof)  on or before the due date
therefor.  The  Sellers  shall  cause  the LLC to pay all premiums on, and shall
cause  the  LLC  not  to  cancel  or allow to expire, any of the LLC's Insurance
Policies  prior  to the Closing Date unless such policy is replaced, without any
lapse  of coverage, by another policy or policies providing coverage at least as
extensive  as  the  policy  or  policies  being  replaced.

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

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

     3.18     Labor  Disputes and Agreements.  There are not currently any labor
              ------------------------------
disputes  pending  or,  to Sellers' knowledge, threatened as to the operation or
maintenance of the Property or any part thereof.   The LLC is not a party to any
union  or  other  collective  bargaining  agreement  with  employees employed in
connection  with  the  ownership, operation or maintenance of the Property.  The
employees  of  the  LLC  are  at  will  employees.

     3.19     Financial  Information.  To  the  Sellers'  Knowledge,  except  as
              ----------------------
otherwise  disclosed  in  writing to the Purchaser prior to the end of the Study
Period,  for each of the LLC's accounting years, when a given year is taken as a
whole,  all  of  the  LLC's  financial information previously delivered or to be
delivered  to the Purchaser is and shall be correct and complete in all material
respects  and presents accurately the financial condition of the LLC and results
of  the  operations  of the Property for the periods indicated, except that such
statements  do not have footnotes or schedules that may otherwise be required by
GAAP.  If requested by the Purchaser, the Sellers shall cause the LLC to deliver
promptly all four-week period ending financial information available to the LLC.
The  LLC's  financial  information  is  prepared  based  on  books  and  records
maintained by the LLC in accordance with the LLC's accounting system.  The LLC's
financial  information has been provided to the Purchaser without any changes or
alteration  thereto.  To  the  best of Sellers' Knowledge, since the date of the
last  financial  statement  included  in  the  LLC's

                                       13
<PAGE>
financial  information,  there  has  been  no  material  adverse  change  in the
financial  condition  or  in  the  operations  of  the  Property.

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

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

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

     3.23     Hazardous  Substances.  Except for matters in LLC's or Purchaser's
              ---------------------
environmental  reports and except for cleaning supplies and the like used in the
ordinary  course  of  Seller's  Business, Sellers have no Knowledge:  (a) of the
presence  of  any  "Hazardous Substances" (as defined below) on the Property, or
any portion thereof, or, (b) of any spills, releases, discharges, or disposal of
Hazardous  Substances  that  have occurred or are presently occurring on or onto
the  Property,  or  any  portion  thereof,  or  (c)  of  the presence of any PCB
transformers  serving,  or  stored on, the Property, or any portion thereof, and
Sellers  have  no  Knowledge of any failure to comply with any applicable local,
state and federal environmental laws, regulations, ordinances and administrative
and judicial orders relating to the generation, recycling, reuse, sale, storage,
handling,  transport  and  disposal of any Hazardous Substances (as used herein,
"Hazardous  Substances"  shall  mean  any  substance or material whose presence,
nature,  quantity  or  intensity  of  existence,  use,  manufacture,  disposal,
transportation,  spill,  release  or  effect, either by itself or in combination
with other materials is either:  (1) potentially injurious to the public health,
safety  or welfare, the environment or the Property, (2) regulated, monitored or
defined  as  a  hazardous  or

                                       14
<PAGE>
toxic  substance or waste by any Governmental Body, or (3) a basis for liability
of  the  owner  of  the  Property  to  any Governmental Body or third party, and
Hazardous  Substances  shall  include,  but  not  be  limited  to, hydrocarbons,
petroleum,  gasoline,  crude  oil,  or  any  products, by-products or components
thereof,  and  asbestos  and  toxic  mold.

     3.24     Room  Furnishings.  All public spaces, lobbies, meeting rooms, and
              -----------------
each  room  in  the  Hotel available for guest rental is furnished in accordance
with  Licensor's standards for the Hotel and room type.  The LLC is obligated to
update  the  rooms  of  the  Hotel and FF&E in accordance with the LLC's current
franchise  agreement with the Licensor.  The cost of such updates shall be borne
by  Purchaser  and  Sellers  in  accordance  with  Section  5.22  hereof.

     3.25     License.
              -------

     (a)     The license from Marriott International, Inc. (the "Licensor") with
respect  to  the  Hotel (the "License") is, and at Closing will be, valid and in
full  force  and effect, and on the Closing Date none of the Sellers nor the LLC
will  be  in  default  with  respect  thereto (with or without the giving of any
required  notice  and/or  lapse  of  time);  however,  the  License  will not be
transferable  without  Licensor's  consent.

      (b)     Subject  to  Purchaser  obtaining  Licensor's consent, neither the
execution,  delivery,  or  performance by the Sellers of this Agreement, nor the
consummation  of  the  transactions  contemplated  hereby, nor compliance by the
Sellers  or  the  LLC  with any of the provisions hereof, will violate, conflict
with,  result in a breach of any provision of, constitute a default (or an event
that,  with notice or lapse of  time or both, would constitute a default) under,
result  in the termination of, accelerate the performance required by, or result
in  a right of termination under any of the terms, conditions, or provisions of,
the  License.

     3.26     Access  to Financial Information.  Sellers shall provide access by
              --------------------------------
Purchaser's  representatives, to all financial and other information relating to
the  Property  and  the  LLC.

     3.27     Intentionally  Deleted.
              ----------------------

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

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

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

     3.29     Environmental  Matters.  To the best of Sellers' actual knowledge,
              -----------------------
there  are  no  violations  of  any  environmental  laws  relating  to Hazardous
Substances  respecting  the  Property  or

                                       15
<PAGE>
the Hotel.  In addition, without limiting the generality of the foregoing, there
are no instances and there have not at any time been any instances of toxic mold
at  the  Property  or  the  Hotel.

     3.30     Noncontravention.  The  execution  and  delivery  of,  and  the
              ----------------
performance by the Sellers of their respective  obligations under this Agreement
do  not and will not contravene, or constitute a default under, any provision of
applicable  law  or  regulation,  or any agreement, judgment, injunction, order,
decree  or  other instrument binding upon the Sellers, or result in the creation
of  any  lien  or  other  encumbrance on any asset of the Sellers.  There are no
outstanding  agreements  (written or oral) pursuant to which the Sellers (or any
predecessor  to  or  representative  of  the  Sellers) has agreed to sell or has
granted  an  option  or  right  of first refusal to acquire the Interests or the
Property  or  any  part  thereof.  Prior to the consummation of the transactions
contemplated  herein,  the Existing Financing Documents require consent from the
Lender  and  the License agreement with Licensor requires consent from Licensor,
which  consents  shall  be sought in accordance with the provisions of Article V
                                                                       ---------
and  the  obtaining  of  such consent shall be a condition precedent to Sellers'
obligations  to  close.

     3.31     Third  Party Beneficiary.  Each of the representations, warranties
              ------------------------
and  covenants  contained  in this Article III and its various subparagraphs are
                                   -----------
intended for the benefit of the Purchaser and may be waived in whole or in part,
by  the Purchaser, but only by an instrument in writing signed by the Purchaser.
Each of said representations, warranties and covenants shall survive the closing
of the transaction contemplated hereby for one (1) year.

     3.32     Third  Party  Consents.  Sellers  shall use best efforts to obtain
              ----------------------
Lender's  approval  and  consent to Purchaser's purchase of the Interests in the
LLC  and  to  obtain  Licensor's  consent  to the transfer of the License to the
Lessee.

                                    ARTICLE IV
                                    ----------

              PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
              -----------------------------------------------------

          To  induce  the  Sellers  to enter into this Agreement and to sell the
Interests,  the Purchaser hereby makes the following representations, warranties
and  covenants  with  respect  to the Property, upon each of which the Purchaser
acknowledges  and  agrees  that the Sellers are entitled to rely and have relied
upon:

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

     4.2     Noncontravention.  The execution and delivery of this Agreement and
             ----------------
the  performance  by  the Purchaser of its obligations hereunder do not and will
not  contravene, or constitute a default under, any provisions of applicable law
or regulation, the Purchaser's partnership agreement or any agreement, judgment,
injunction,  order,  decree  or  other  instrument

                                       16
<PAGE>
binding  upon  the  Purchaser  or  result  in  the creation of any lien or other
encumbrance  on  any asset of the Purchaser.  Any and all liens on the Interests
shall  be  released  at  Closing.

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

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

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

                                    ARTICLE V
                                    ---------

                       CONDITIONS AND ADDITIONAL COVENANTS
                       -----------------------------------

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

     5.1     Sellers'  Deliveries.  The  Sellers  shall  have  delivered  to the
             --------------------
Escrow  Agent  or  the  Purchaser,  as the case may be, on or before the Closing
Date, all of the documents and other information required of Sellers pursuant to
Section  6.2.
------------

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

     5.3     Title  Insurance.  The  LLC  shall  hold  good and indefeasible fee
             ----------------
simple  title  to  the Real Property and the Real Property shall be insurable as
such.

     5.4     Condition  of  Improvements.  The  Improvements  and  the  Tangible
             ---------------------------
Personal  Property  (including  but  not  limited  to  the  mechanical  systems,
plumbing,  electrical,  wiring,  appliances, fixtures, heating, air conditioning
and  ventilating  equipment,  elevators,  boilers,  equipment, roofs, structural
members  and  furnaces) shall be in the same condition at Closing as they are as
of  the  date  hereof, reasonable wear and tear excepted.  Prior to Closing, the
Sellers  shall  not  have  diminished the quality or quantity of maintenance and
upkeep  services  heretofore  provided  to  the  Real  Property and the Tangible
Personal  Property  and  the  Sellers  shall  not  have

                                       17
<PAGE>
diminished  the  Inventory.  The  Sellers  shall  not  have removed or caused or
permitted to be removed any part or portion of the Real Property or the Tangible
Personal  Property  unless  the same is replaced, prior to Closing, with similar
items  of  at  least  equal  quality  and  acceptable  to  the  Purchaser.

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

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

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

     5.8     Audits.  For  one  year following the Closing Date, Purchaser shall
             ------
have  the  right,  at  its  expense,  to audit the 2003 and 2004 books, records,
financials,  and  financial  control  procedures  of the LLC with respect to the
Hotel.

     5.9     Franchise  License Contingency. As a condition to Closing, Licensor
             ------------------------------
(as  defined  in Section 3.25) will approve the transfer of the franchise to the
Lessee  (defined hereafter in Section 5.17).   The LLC shall cause the franchise
license  with Licensor respecting the Hotel to be transferred to the Lessee, and
Purchaser  and Sellers shall cause the Lessee to obtain a franchise license with
Licensor.  Purchaser  and  Sellers  shall  use  diligent efforts and shall fully
cooperate  with  each  other in pursuit of such franchise license with Licensor.
Sellers  shall contact Licensor and use best efforts to cause Licensor to waive,
or  at  least  reduce,  the franchise transfer fees and costs.  The LLC shall be
responsible  for  all  costs  and  expenses  associated with the transfer of the
franchise  license  to  the Lessee.  In the event that Licensor does not approve
the  transfer  of  the  franchise license to the Lessee on or before the Closing
Date, then either (i) the parties hereto may agree to extend the Closing Date or
(ii)  Purchaser,  at  Purchaser's  sole  option,  may  elect  to  terminate this
Agreement and receive a refund of the Deposit with interest thereon.

     5.10.     Existing  Financing.  The Existing Financing shall continue to be
               -------------------
the  obligation  of  the  LLC  after  the  Closing.  Any  and all costs and fees
associated  with  assignment  and  assumption of the Existing Financing shall be
borne  by  the  LLC  and  Sellers  shall use best efforts to cause the Lender to
waive,  or  at  least  reduce,  any  such  costs  and  fees.

     5.11.     Existing Hotel Management Agreement. LLC shall cause the existing
                ----------------------------------
hotel  management agreement for the Hotel, if any, to be terminated, and Sellers
shall  be  responsible  for all fees and costs associated with such termination.

     5.12.     Non-Competition.  At  Closing,  Sellers  shall  enter  into  a
               ---------------
non-competition  agreement with Purchaser, pursuant to which Sellers shall agree
that neither of the Sellers nor any of the Sellers' affiliates or family members
shall  directly  or  indirectly  develop,  construct,

                                       18
<PAGE>
operate  or  acquire  any  hotel, other than a Fairfield Inn on Richmond Road in
Williamsburg,  Virginia,  and  a  Holiday  Inn  Express  on  Richmond  Road  in
Williamsburg,  Virginia, within a 2-mile radius of the Hotel for a 3-year period
from  the  Closing  Date.

     5.13.     Non-Interference.     Neither  of  the  Sellers  nor  any  of the
               ----------------
Sellers'  affiliates or family members shall hire or solicit any employee of the
Hotel  at  any time.  Notwithstanding the foregoing as long as LTD Management is
operating  the  Hotel,  LTD Management may transfer any employee of the Hotel to
other  hotels  managed  by  LTD  Management.

     5.14.     Third  Party  Consents.  To  the  extent  required by any service
               ----------------------
contract  or  agreement  to  which  the  LLC is a party, Sellers will obtain all
necessary  consents  to  the  transfer  of  the Interests.  Sellers shall obtain
Licensor's  consent  in accordance with Section 5.9 and shall obtain the consent
of  the  Lender  on  or before the Closing Date.  Any and all costs and expenses
associated  with  obtaining such third-party consents shall be borne by the LLC.
In  the  event that Lender does not approve the transfer of the LLC Interests to
the  Purchaser on or before the Closing Date, then either (i) the parties hereto
may  agree  to  extend the Closing Date or (ii) Purchaser or Seller may elect to
terminate  this  Agreement.  In  the  event of such termination, Purchaser shall
receive  a  refund  of  the  Deposit  with  interest  thereon.

     5.15.     Cash Flow Participation.  Purchaser shall, during the term of its
               ------------------------
investment  and  its  membership in the LLC, beginning from the Closing Date, be
entitled  to receive on an annual basis first a twelve percent (12.0%) preferred
return on its Contributed Equity from the net operating cash flows from the cash
available  for  distribution  of  the  LLC,  which  net operating cash flows are
defined  as  Gross  Operating  Profit less the debt service payments, management
fee,  asset  management  fee  (as  set  forth  in the Asset Management Agreement
(defined  in  Section 5.18)), property taxes, insurance premiums, lease payments
(if  any)  and  funds in the amount of four percent (4.0%) set aside in the FF&E
replacement  reserve.  Sellers  then  on  an  annual  basis shall be entitled to
receive a twelve percent (12.0%) return on their Contributed Equity from the net
operating  cash flows (as defined above) from cash available for distribution of
the  LLC.  Remaining  cash  flows  from cash available for distribution ("Excess
Cash")  will  be  apportioned  pro-rata  based  upon  Sellers'  and  Purchaser's
respective  equity  ownership in the LLC.   The amount of Purchaser and Sellers'
respective  Contributed  Equity as of the Closing Date shall be set forth in the
Amended  and  Restated Operating Agreement of the LLC to be entered into between
the  parties  as  of  the  Closing  Date.

     5.16.     Liquidation.  Proceeds  (after  payment of all outstanding debts,
               ------------
obligations  and  liabilities  of  the  LLC)  received from a sale, liquidation,
refinancing  or  other  capital event of the LLC (individually and collectively,
"Event  of  Liquidation") shall be distributed as follows:  First, the Purchaser
shall  receive  the  total  amount  of  its Contributed Equity and Sellers shall
receive second the total amount of their respective Contributed Equity, and then
any  remaining proceeds shall be divided pro-rata to Purchaser and Sellers based
upon  their respective equity ownership in the LLC.  In the event there has been
no third party offer to buy the LLC, prior to an Event of Liquidation occurring,
Sellers  shall  have  a  right  of first refusal based on a valuation of the LLC
determined  by  three  independent appraisers mutually approved by Purchaser and
Sellers.  Upon  receipt  of  the three appraisals, Sellers shall have 30 days to
make  an  offer  to  buy  for  the  amount

                                       19
<PAGE>
equal  to  the  average of the three appraised valuations.  In the event no such
offer  is  made  by  Sellers in such 30-day period, Sellers' first refusal right
shall  be  deemed  waived.  In  the  event  Sellers elect to buy the Purchaser's
membership  interests  within such 30-day period pursuant hereto, closing of the
sale  of  such  membership  interests  shall  occur  within  60 days of Sellers'
election  to  buy.

     5.17.     Lessee.  On or before the Closing Date, Sellers and Purchaser, at
               -------
the  sole  cost and expense of the LLC, shall take all required actions to cause
HT  LTD Williamsburg, LLC, a Virginia limited liability company ("Lessee") to be
formed  and  owned by Purchaser or its affiliate with 75% interest in the Lessee
and  the  Sellers,  collectively,  with  25%  interest  in  the  Lessee.

     5.18.     Percentage  Lease  and New Hotel Management Agreement.  Purchaser
               -----------------------------------------------------
and Sellers shall cause the Lessee to enter into a percentage lease with LLC and
LLC  shall enter into such lease with Lessee.  Purchaser and Sellers shall cause
the  Lessee  to enter into a new management agreement for operation of the Hotel
with  LTD  Management  Company,  LLC  (the "Manager") (as amended, modified, and
restated,  the  "Management  Agreement"),  which  Management  Agreement shall be
negotiated  between  the  parties during the Study Period.  Under the Management
Agreement,  Manager  shall  be  responsible  for the day-to-day operation of the
Property.  The management fee to Manager for the operation of the Hotel shall be
3% of Gross Revenues of the Hotel.  Purchaser and Sellers shall cause the Lessee
to  enter into an asset management agreement with Hersha Hospitality Management,
L.P.  ("HHMLP")  (the  "Asset  Management Agreement"), and pursuant to the Asset
Management  Agreement,  HHMLP will act as Asset Manager, providing overall sales
and  management support to Lessee, and all accounting functions for the LLC, and
HHMLP  shall  earn  an  asset management fee of 1% of the Gross Revenues. In the
event  Sellers  sell  their  remaining  25% interests in the LLC, the Management
Agreement  shall  terminate.

     5.19.     LLC  Manager.    Sellers and Purchaser agree that Jay H. Shah, or
               ------------
any  other  officer  of Purchaser or its affiliates, shall be the new Manager of
the  LLC and appointment of this new Manager shall be effective on and after the
Closing  Date.  Any sale, refinance, or liquidation of the LLC shall require the
unanimous  consent  of  all  the  members  of  the  LLC.

     5.20.     Buy-Sell  Provisions.    Purchaser and Sellers agree that, in the
               --------------------
event  any  of  the  Sellers  intend  to sell any of their respective membership
interests  in  the  LLC  after  the Closing Date, Purchaser shall have the first
right  of  refusal  and,  in  the  event  Purchaser  intends  to sell any of its
membership  interests  in the LLC after the Closing Date, Sellers shall have the
first right of refusal.  The non-offering party shall have 30 days to respond to
an offer to sell by the other party and exercise its first right of refusal.  In
the  event  the  non-offering  party elects to purchase the membership interests
being offered for sale within the 30-day response period, closing of the sale of
such membership interests shall occur within 60 days of the non-offering party's
election  to buy.  In the event the non-offering party does not accept the offer
and  does  not elect to buy the membership interests offered for sale within the
30-day response period, the non-offering party's first right of refusal shall be
deemed  waived;  provided  that, if the non-offering party does not elect to buy
the  membership  interests,  the  offering  party shall have a period of 90 days

                                       20
<PAGE>
(beginning  the  day after the expiration of the 30-day response period) to sell
the membership interests on the same terms and conditions contained in the right
of  refusal.  In  the  event  such  a  sale is not consummated within the 90-day
period,  then  the non-offering party's right of first refusal shall continue to
be  applicable  to  any future proposed sales of the membership interests.  Such
buy-sell  provisions  shall  be incorporated in the JV Agreements (as defined in
Section  2.2(h)) to be entered into by the Purchaser and Sellers at Closing, and
such  JV  Agreements  shall  incorporate  all essential terms of this Agreement.

     5.21.     Hotel  Manager's  Employees.    The Manager may use its employees
               ---------------------------
who  are  not  specifically  assigned  to  the Hotel to perform services for the
Hotel,  and  the  pro-rata  cost  of  their salaries, payroll taxes and employee
benefits  with  respect  to  such  services  provided  for  the  Hotel  shall be
reimbursed  to  Manager as an operating expense to the extent such costs are set
forth  in  the  budget approved by the Lessee.  The provisions set forth in this
Section  5.21 shall be substantially incorporated in the Management Agreement to
be  entered  into  between the Lessee and the Manager.  Furthermore, the Manager
shall  be  reimbursed  for  the pro-rata cost of the salaries, payroll taxes and
employee  benefits  of  the  Manager's  Revenue Manager, Independent Maintenance
Group  and  Marketing  Personnel  together  with a pro-rata share of the expense
incurred by such individuals to the extent such costs and expenses are set forth
in  the  approved  budget  in accordance with the Management Agreement, provided
that  to  the extent such expenses incurred by the Independent Maintenance Group
are  for  repairs  necessary for the maintenance and operation of the Hotel, the
expenses  will  be paid for as an operating expense even if not set forth in the
approved  budget.  For  purposes  of this provision, the pro-rata share shall be
determined  by  a  fraction  the  numerator  of  which  shall be one (1) and the
denominator  will  be  the  number  of  hotels/motels  to which an individual is
providing  services.

     5.22.     Reserves  and  FF&E  Improvements.   Purchaser  agrees  that  at
               ---------------------------------
Closing  it will provide up to $547,500 (75% of a maximum $730,000) towards FF&E
Improvements  required  by the Licensor.  To the extent that any portion of this
money  has  been  expended  by Sellers, Purchaser will reimburse Sellers for all
such  funds  expended  by Sellers and Purchaser will provide the balance of such
funds  to  pay  for FF&E Improvements.  Such reimbursement and/or expenditure by
Purchaser shall be added to the total amount of Contributed Equity of Purchaser.
Notwithstanding the foregoing, Sellers agree that at Closing they shall provide,
if not already provided, up to $182,500 (which amount shall not be reimbursed by
Purchaser) towards FF&E Improvements required by the Licensor, and Sellers shall
receive  credit as a capital contribution in the amount of such sums expended by
Sellers  for  FF&E  Improvements which shall be added to the total amount of the
Contributed  Equity  of  Sellers.  Notwithstanding  the foregoing, Sellers agree
that  they  shall  bear  all  costs  for  the  FF&E Improvements that exceed, in
aggregate,  $730,000.

     Additionally,  Purchaser  shall  reimburse  Sellers  75%  of  any  existing
reserves/escrows held by Lender (including FF&E reserves and tax reserves) which
have  not  been earmarked to be used for the $730,000 of FF&E Improvements which
amount  is to be determined at Closing, and such reimbursement shall be added to
the  total amount of Contributed Equity of Purchaser.  Additionally, the Sellers
shall  receive credit as a capital contribution in the amount of 25% of any such
reserves/escrows  held  with the Lender which amount shall be added to the total
amount  of

                                       21
<PAGE>
Contributed  Equity  of  Sellers.

     5.23.     Removal  of  Pledges/Liens.  As  of the Closing Date, any and all
               --------------------------
pledges  of  the  LLC membership interests, if any, shall be released, and there
shall  be  no pledge, lien, or encumbrance on any of the membership interests in
the  LLC  as  of  the  Closing  Date.

                                    ARTICLE VI
                                    ----------

                                     CLOSING
                                     -------

     6.1     Closing.  Closing  shall  be  held  at  a location that is mutually
             -------
acceptable to the parties, on or before March 31, 2005.

     6.2     Sellers'  Deliveries.  At  Closing,  the  Sellers  shall deliver to
             --------------------
Purchaser  all  of the following instruments, each of which shall have been duly
executed  and, where applicable, acknowledged on behalf of the Sellers and shall
be  dated  as  of  the  date  of  Closing:

          (a)     Assignments  of  the  Interests.

          (b)     The  certificate  required  by  Section  5.2.
                                                  ------------

          (c)     The  Assignment  and  Assumption  Agreement.

          (d)     Intentionally  Deleted.

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

          (f)     The  FIRPTA  Certificate  for  the Sellers who are eligible to
execute  such  certificate.

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

          (h)     Certified  copies  of  the  LLC's  Organizational  Documents.

          (i)     Certified  copies  of  any  entity  Sellers'  Organizational
Documents.

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

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

                                       22
<PAGE>
          (l)     Intentionally  Deleted.

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

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

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

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

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

          (r)     All  keys  for  the  Property.

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

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

          (u)     Complete  set  of  "as-built"  drawings  for the Improvements.

          (v)     Such  proof,  reasonably  acceptable to the Sellers evidencing
the  payment  by  Purchaser of all transfer taxes if any, incurred in connection
with  the  transactions  contemplated  by  this  Agreement.

          (w)     Counsel  opinion letter.  During the Study Period, Sellers and
Buyer  will agree upon the form of Sellers' Counsel opinion letters satisfactory
to both parties.  In the event the parties do not agree upon the form of opinion
letter,  either  party  can  terminate  this  Agreement.

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

          (y)     Any  other  document reasonably required by Purchaser in order
to  consummate  the  transaction.

                                       23
<PAGE>
     6.3     Purchaser's  Deliveries.  At  Closing,  the  Purchaser shall pay or
             -----------------------
deliver  to  the  Sellers  the  following:

          (a)     The  Consideration.

          (b)     The  Assignment  and  Assumption  Agreement.

          (c)     Any  other  document or instrument reasonably requested by the
Sellers  or  required  hereby.

          (d)     Counsel  opinion letter.  During the Study Period, Sellers and
Purchaser  will  agree  upon  the  form  of  Purchaser's  Counsel opinion letter
satisfactory  to  both  parties.  In the event the parties do not agree upon the
form  of  opinion  letter,  either  party  can  terminate  this  Agreement.

     6.4     Closing  Costs.   Real  estate  transfer  taxes, if any, and to the
             --------------
extent  they are due and payable, shall be paid as customary in the Commonwealth
of Virginia.  All filing fees, recording or other similar taxes due with respect
to  the  transfer  of the Interests and all charges for title insurance premiums
shall  be  paid by the LLC.  LLC shall pay for any costs and expenses associated
with obtaining of the consent from the Lender for the assumption of the Existing
Financing  and  any  cost  and  expenses  associated  with  the  transfer of the
franchise  to  Lessee as well as any other costs and expenses in connection with
any  necessary  third  party  reports  related  thereto.

     6.5     Income  and  Expense  Allocations.  All  income  and  expenses with
             ---------------------------------
respect  to  the Property, determined in accordance with United States generally
accepted  accounting principles consistently applied, shall be allocated between
the  Sellers  and  the  LLC.  The  Sellers  shall  be entitled to all income and
responsible  for  all  expenses  for  the period of time up to but not including
12:01  a.m. on the Closing Date, and the LLC shall be entitled to all income for
the  period  of time from, after and including 12:01 a.m. on the Closing Date as
per  Section  5.15 of this Agreement.  All adjustments shall be made by separate
agreement  between  the  parties  and shall be payable by check or wire transfer
directly between the parties.  Without limiting the generality of the foregoing,
the  following  items of income and expense shall be allocated as of the Closing
Date:

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

          (b)     Real  estate  and  personal  property  taxes.

          (c)     Amounts  under  the  Operating  Agreements.

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

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

                                       24
<PAGE>
          (f)      All prepaid reservations and contracts for rooms confirmed by
Sellers prior to the Closing Date for dates after the Closing Date, all of which
Purchaser  shall  honor.

          The  Sellers  shall  be  required  to  pay all sales taxes and similar
impositions  on  revenues  generated  from  the  Hotelup  to  the  Closing Date.

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

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

          The  assignment  of  membership  interest  transferring  the  Sellers
ownership of the Interests will be dated as of the Closing Date, and the Sellers
will  be  entitled  to any distributions thereon on and before the Closing Date.

                                   ARTICLE VII
                                   -----------

                           CONDEMNATION; RISK OF LOSS
                           --------------------------

     7.1     Condemnation.  In  the  event  of  any actual or threatened taking,
             ------------
pursuant  to  the  power  of  eminent  domain, of all or any portion of the Real
Property,  or  any proposed sale in lieu thereof, the Sellers shall give written
notice  thereof  to  the  Purchaser  promptly after the Sellers learn or receive
notice  thereof.  If  all  or  any part of the Real Property is, or is to be, so
condemned  or sold such that the Hotel cannot be operated in the manner in which
it  currently  is operated, the Purchaser shall have the right to terminate this
Agreement  and  receive  a  refund of the Deposit with interest thereon.  If the
Purchaser elects not to terminate this Agreement, all proceeds, awards and other
payments  arising  out of such condemnation or sale (actual or threatened) shall
be  paid  or  assigned,  as  applicable,  to  the  Purchaser  at  Closing.

     7.2     Risk of Loss.  The risk of any loss or damage to the Property prior
             ------------
to  the  Closing  shall  remain upon the Sellers.  If any such loss or damage to
more  than  twenty  five  percent  (25%) of the value of the Improvements occurs
prior to Closing, the Purchaser shall have the right to terminate this Agreement
and  receive  a  refund  of the Deposit with interest thereon.  If the Purchaser
elects  not  to  terminate  this Agreement, all insurance proceeds and rights to
proceeds  arising  out  of  such  loss  or  damage shall be paid or assigned, as
applicable,  to  the  LLC  at  Closing.

                                       25
<PAGE>
                                   ARTICLE VIII
                                   ------------

               LIABILITY OF PURCHASER; INDEMNIFICATION BY SELLERS;
               ---------------------------------------------------
                     TERMINATION RIGHTS; RIGHTS OF PURCHASER
                     ---------------------------------------

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

     8.2     Indemnification  by  Sellers.  The  Sellers  hereby,  jointly  and
             ----------------------------
severally,  indemnify  and  hold the Purchaser harmless from and against any and
all claims, costs, penalties, damages, losses, liabilities and expenses, subject
to  Section  9.11,  that  may  at any time be incurred by the Purchaser, whether
    -------------
before  or  after  Closing,  as  a result of any breach by the Sellers of any of
their  representations, warranties, covenants or obligations set forth herein or
in  any  other  document  delivered  by  the  Sellers  pursuant  hereto.

     8.3     Specific Performance and Remedies.  Sellers agree that in the event
             ----------------------------------
of  any  breach  or  threatened breach by Sellers of any covenant, obligation or
other provision contained in this Agreement, Purchaser shall be entitled (as its
sole remedy), to the extent permitted by applicable law, to seek (a) a decree or
order  of specific performance to enforce the observance and performance of such
covenant,  obligation  or other provision and (b) an injunction restraining such
breach  or  threatened  breach.  If  any  legal action or other legal proceeding
relating to this Agreement or the enforcement of any provision of this Agreement
is  brought  against  any party to this Agreement, the prevailing party shall be
entitled  to  recover  reasonable  attorney's  fees, costs and disbursements (in
addition  to  any  other  relief to which the prevailing party may be entitled).

     8.4     Termination  by  Sellers.  If,  prior  to  Closing,  the  Purchaser
             ------------------------
defaults  in  performing  any  of  its  obligations under this Agreement and the
Purchaser  fails  to  cure  any  such  default within ten (10) days after notice
thereof  from  the Sellers, then the Sellers' sole remedy for such default shall
be  to  terminate  this  Agreement.   Upon  such  termination,  Sellers shall be
entitled  to  receive  the  Deposit  as  LIQUIDATED DAMAGES in full and complete
satisfaction  of  any  and  all  damages  incurred by Sellers on account of such
default,  it being acknowledged and agreed that in the event of any such default
it  would  be  difficult  or  impossible to ascertain the precise amount of such
damages  and  the amount of the Deposit are fair and reasonable estimates of the
amount of such damages.  Upon notice to the Escrow Agent of Purchaser's default,
the  Escrow  Agent  shall  transfer  the  Deposit  to  Sellers.

                                   ARTICLE IX
                                   ----------

                            MISCELLANEOUS PROVISIONS
                            ------------------------

     9.1     Completeness;  Modification.  This Agreement constitutes the entire
             ---------------------------
agreement  between  the  parties  hereto  with  respect  to  the  transactions
contemplated  hereby  and  supersedes  all  prior  discussions,  understandings,
agreements  and  negotiations  between  the  parties  hereto.

                                       26
<PAGE>
This Agreement may be modified only by a written instrument duly executed by the
parties  hereto.

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

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

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

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

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

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

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

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

                                       27
<PAGE>
sent  in the manner aforesaid shall be deemed given or made (as the case may be)
when  actually  delivered  to  the  intended  recipient.

     If  to  the  Sellers:          H.  K.  Thakkar,  as  Authorized
     ---------------------
                                    Agent  for  the  Sellers
                                    1564  Crossways  Boulevard
                                    Chesapeake,  Virginia  23320
                                    Facsimile:  757-420-0931
                                    Telephone:  757-420-0900

     With  a  copy  to:             Alan  M.  Frieden,  Esquire
     -----------------
                                    Faggert  &  Frieden,  P.C.
                                    222  Central  Park  Avenue,  Suite  1300
                                    Virginia  Beach,  Virginia  23462
                                    Telephone:  757-424-3232
                                    Fax:  757-424-0102

     If  to  the  Purchaser:        Hersha  Hospitality  Limited  Partnership
     ----------------------
                                    148  Sheraton  Drive,  Box  A
                                    New  Cumberland,  PA  17070
                                    Attn:  Ashish  Parikh
                                    Telephone:  717-770-2405
                                    Facsimile:  717-774-7383

     With  a  copy  to:             Shah  &  Byler  LLP
     -----------------
                                    510  Walnut  Street,  9th  Floor
                                    Philadelphia,  PA  19106
                                    Attn:  Lok  Mohapatra,  Esquire
                                    Telephone:  215-238-1045
                                    Facsimile:  267-238-1874

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

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

     9.11     Survival.  All  of  the representations, warranties, covenants and
              --------
agreements  of  the  Sellers  and  the  Purchaser  made in, or pursuant to, this
Agreement  shall  survive  for  a  period  of

                                       28
<PAGE>
twelve  (12)  months  following Closing and shall not merge into the Deed or any
other  document  or  instrument  executed  and delivered in connection herewith.

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

     9.13     Preferred  Member.  Pursuant to this Agreement, Purchaser shall be
              -----------------
a  preferred  investor  and  member  in  the  LLC,  and  as such shall receive a
preferred return on its Contributed Equity from the distributed cash flow of the
LLC  as  per  Section  5.15.

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

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

     9.16     Publicity.  The  parties  agree  that  no  party  shall contact or
              ---------
conduct  negotiations  with  public  officials,  make any public pronouncements,
issue  press  releases or otherwise furnish information regarding this Agreement
and/or  the transactions contemplated by this Agreement to a third party without
obtaining  the prior written consent of all parties.  No party, or its employees
with  knowledge  of  the  transactions  contemplated  herein, shall trade in the
securities  of  any  affiliate  of  Purchaser until a public announcement of the
transactions  contemplated  by  this  Agreement  has  been  made  public.

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

                                     SELLERS:
                                     --------

                                     _____________________________
                                     By:  Pushpa H. Thakkar

                                     _____________________________
                                     By:  Bharti D. Desai

                                     _____________________________
                                     By:  Malay H. Thakkar

                                       29
<PAGE>
                                     _____________________________
                                     By:  Kush H. Thakkar

                                     _____________________________
                                     By:  Neel D. Desai

                                     _____________________________
                                     By:  Tejal D. Desai

                                     PURCHASER:
                                     ----------

                                     Hersha Hospitality Limited Partnership, a
                                     Virginia limited partnership

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

                                     By: ___________________________
                                         Jay H. Shah, President & COO

                                     THE LLC:
                                     --------

                                     LTD ASSOCIATES TWO, LLC, a Virginia
                                     limited liability company

                                     By: _________________________

                                         _______________________, Manager

                                       30
<PAGE>
                                    EXHIBIT A
                                    ---------

                            LEGAL DESCRIPTION OF LAND
                            -------------------------

<PAGE>
                                    EXHIBIT B
                                    ---------

                              EMPLOYMENT AGREEMENTS
                              ---------------------

<PAGE>
                                    EXHIBIT C
                                    ---------

                               INSURANCE POLICIES
                               ------------------

<PAGE>
                                    EXHIBIT D
                                    ---------

                             LLC OPERATING AGREEMENT
                             -----------------------

<PAGE>
                                    EXHIBIT E
                                    ---------

                              OPERATING AGREEMENTS
                              --------------------

<PAGE>
                                    EXHIBIT F
                                    ---------

                          LLC ARTICLES OF ORGANIZATION
                          ----------------------------

<PAGE>
                                    EXHIBIT G
                                    ---------

                       SELLERS' WARRANTIES AND GUARANTIES
                       ----------------------------------

<PAGE>
                                    EXHIBIT H
                                    ---------

                               LITIGATION SCHEDULE
                               -------------------

<PAGE>March 8 2005 8KA Exhibit 4.1

                Exhibit 4.1

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is
made as of March 7, 2005 by and among 8X8, Inc., a Delaware corporation
(the "Company"), and (ii) the holders listed on
Exhibit A hereto (collectively the "Holders").

WHEREAS, the terms of the Placement Agency Agreement dated as of
March 3, 2005 among the Company, A.G. Edwards & Sons, Inc. and Griffin
Securities, Inc. provide that it shall be a condition precedent to the closing
of the transactions thereunder for the Company and the Holders to execute and
deliver this Agreement to provide for the registration under the Securities Act
of 1933, as amended, of certain warrants issued to the Holders as identified on
Exhibit A.

NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:

	Definitions.  The following terms shall have the meanings
provided below:

"Additional Shares" shall mean any additional shares of
Common Stock which may be issued or become issuable from time to time upon the
exercise of a Warrant, or a distribution with respect to, or in exchange for, or
in replacement of a Warrant, as a result of any adjustment provisions of a
Warrant or otherwise.

"Board of Directors" shall mean the board of directors of
the Company.

"Closing" shall have the meaning ascribed to such term in
the Placement Agreement.

"Closing Date" shall have the meaning ascribed to such term
in the Placement Agreement.  

"Common Stock" shall mean the common stock, $.001 par value
per share, of the Company.  

"Convertible Securities" means (i) options to purchase
or rights to subscribe for Common Stock, (ii) securities by their terms
convertible into or exchangeable for Common Stock or (iii) options to
purchase or rights to subscribe for such convertible or exchangeable securities.

"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and all of the rules and regulations promulgated
thereunder.

"Majority Holders" shall mean, at the relevant time of
reference thereto, those Holders holding more than fifty percent (50%) of the
Registrable Shares held by all of the Holders.

"Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the Holders of the Warrants at any time shall be entitled to
receive, or shall have received, upon the exercise of the Warrants, in lieu of
or in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 6 of the Warrants or otherwise.

"Placement Agreement" shall mean the Placement Agency
Agreement between the Company and A.G. Edwards & Sons, Inc. and Griffin
Securities, Inc., as agents, dated as of March 3, 2005.

"Registrable Shares" shall mean any Shares or any shares of
Common Stock or Other Securities issued or issuable from time to time upon the
exercise of a Warrant, or a distribution with respect to, in exchange for, or in
replacement of a Warrant, including without limitation Additional Shares.  

"Rule 144" shall mean Rule 144 promulgated under the
Securities Act and any successor or substitute rule, law or provision.

"SEC" shall mean the Securities and Exchange Commission.

"Securities Act" shall mean the Securities Act of 1933, as
amended, and all of the rules and regulations promulgated thereunder.

"Warrant" refers to each Warrant issued by the Company to
the Holders pursuant to the Placement Agreement.

	Effectiveness.  This Agreement shall become effective upon the
Closing.  

	Mandatory Registration.

	No later than 180 days after the Closing, the Company will prepare and
file with the SEC a registration statement on Form S-3 (or, if Form S-3 is not
then available to the Company, on such form of registration statement that is
then available to effect a registration of all Registrable Shares) for the
purpose of registering under the Securities Act all of the Registrable Shares
for resale by, and for the account of, the Holders as selling stockholders
thereunder (the "Registration Statement").  The Registration
Statement shall permit the Holders to offer and sell, on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act, any or all of the
Registrable Shares.  Such Registration Statement also shall cover, to the extent
allowable under the Securities Act and the rules promulgated thereunder
(including Rule 416), such indeterminate number of additional shares of Common
Stock resulting from stock splits, stock dividends or similar transactions with
respect to the Registrable Shares.  
	The Company agrees to use commercially reasonable efforts to cause the
Registration Statement to become effective as soon as practicable after filing,
but in no event later than 120 days after filing.
	The Company shall be required to keep the Registration Statement, as
amended, effective until such date that is the earlier of (i) two years
after the Closing Date, (ii) the date when all of the Registrable Shares
registered thereunder shall have been sold, or (iii) such time as all the
Registrable Shares held by the Holders can be sold pursuant to Rule 144(k) and
without compliance with the registration requirements of the Securities Act
(such date is referred to herein as the "Mandatory Registration
Termination Date").  Thereafter, the Company shall be entitled to
withdraw the Registration Statement and the Holders shall have no further right
to offer or sell any of the Registrable Shares pursuant to the Registration
Statement (or any prospectus relating thereto).  
	The Company shall not grant any registration rights that are pari passu with
or senior to the registration rights of the Holders under this Agreement if such
registration rights would adversely affect the Holders' ability to sell
Registrable Shares pursuant to the Registration Statement.  The Company
represents that no stockholders other than the Holders have the right to sell
any Common Stock or other securities of the Company pursuant to the Registration
Statement.  

	Obligations of the Company.  In connection with the Company's
obligation under Section 3 hereof to file a Registration Statement with the SEC
and to use its reasonable efforts to cause the Registration Statement to become
effective as soon as practicable after filing, the Company shall, as
expeditiously as reasonably possible, subject to Section 9 hereof: 

	Prepare and file with the SEC such amendments and supplements to the
Registration Statement and the prospectus used in connection therewith as may be
necessary to keep the Registration Statement effective until the Mandatory
Registration Termination Date; 
	Furnish to the selling Holders such reasonable number of copies of the
Registration Statement, prospectus and preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents
(including, without limitation, prospectus amendments and supplements as are
prepared by the Company in accordance with Section 4(a) above) as the selling
Holders may reasonably request, in order to facilitate the public or other
disposition of such selling Holders' Registrable Shares;
	Use reasonable efforts to register and qualify the Registrable Shares
covered by the Registration Statement under such other securities or Blue Sky
laws of all states requiring such securities or Blue Sky registration or
qualification, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions; and 
	Use reasonable efforts to cause all such Registrable Shares registered
hereunder to be listed on each securities exchange (including without limitation
any Nasdaq market) on which securities of the same class issued by the Company
are then listed.

	Furnish Information.

	It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Agreement that the selling Holders shall
furnish to the Company such information regarding them and the securities held
by them as the Company shall reasonably request and as shall be required in
order to effect any registration by the Company pursuant to this Agreement.
	The Registration Statement will provide for a plan of distribution with
respect to the Registrable Shares substantially as follows: The Registrable
Shares may be sold from time to time by the Holders, or by pledgees, donees,
transferees or other successors in interest.  Such sales may be made on one or
more exchanges or in the over-the-counter market, or otherwise at prices and at
terms then prevailing or at prices related to the then-current market price, or
in negotiated transactions.  The Registrable Shares may be sold by one or more
of the following: (a) a block trade in which the broker or dealer so
engaged will attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction;
(b) purchases by a broker or dealer as principal and resale by such broker
or dealer for its account pursuant to the resale registration statement;
(c) an exchange distribution in accordance with the rules of such exchange;
(d) ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and (e) transactions between sellers and purchasers
without a broker/dealer.  In addition, any securities covered by the
Registration Statement which qualify for sale pursuant to Rule 144 may be sold
under Rule 144 rather than pursuant to the Registration Statement.  From time to
time the selling Holders may engage in short sales, short sales versus the box,
puts and calls and other transactions in securities of the issuer or derivatives
thereof, and may sell and deliver the shares in connection therewith.  In
effecting sales, brokers or dealers engaged by the selling Holders may arrange
for other brokers or dealers to participate.  Brokers or dealers will receive
commissions or discounts from selling Holders in amounts to be negotiated
immediately prior to the sale.  

	Expenses of Registration.  All expenses incurred in connection
with the registration of the Registrable Shares pursuant to this Agreement
(excluding underwriting, brokerage and other selling commissions and discounts),
including without limitation all registration and qualification and filing fees,
printing expenses, fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements of one counsel for the selling Holders
selected by the selling Holders not to exceed $5,000, shall be borne by the
Company.  

	Indemnification.  

	To the extent permitted by law, the Company will indemnify and hold
harmless each selling Holder (including the partners or officers, directors and
stockholders of such Holder), and each person, if any, who controls such selling
Holder within the meaning of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which they may become subject under
the Securities Act, the Exchange Act, and other federal or state securities
laws, or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) (i) arise out of or are based upon any untrue
or alleged untrue statement of any material fact contained in the Registration
Statement, in any preliminary prospectus or final prospectus relating thereto or
in any amendments or supplements to the Registration Statement or any such
preliminary prospectus or final prospectus, (ii) arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not misleading
or (iii) arise out of any violation or alleged violation by the Company of
the Securities Act, the Exchange Act, any other federal or state securities law
or any rule or regulation promulgated under the Securities Act, the Exchange Act
or any other federal or state securities law in accordance with the provisions
of Section 6 of the Placement Agreement.
	To the extent permitted by law, each selling Holder will severally and not
jointly indemnify and hold harmless the Company, each of its directors, each of
its officers who have signed the Registration Statement, each person, if any,
who controls the Company within the meaning of the Securities Act, or any
selling Holders, and all other selling Holders against any losses, claims,
damages or liabilities to which the Company or any such director, officer,
controlling person or such other selling Holder may become subject to, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in the
Registration Statement or any preliminary prospectus or final prospectus,
relating thereto or in any amendments or supplements to the Registration
Statement or any such preliminary prospectus or final prospectus, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent and only to the extent that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, in any preliminary prospectus
or final prospectus relating thereto or in any amendments or supplements to the
Registration Statement or any such preliminary prospectus or final prospectus,
in reliance upon and in conformity with written information furnished by the
selling Holder expressly for use in connection with the Registration Statement,
or any preliminary prospectus or final prospectus in accordance with the
provisions of Section 6 of the Placement Agreement.

	Reports Under the Exchange Act.  With a view to making
available to the Holders the benefits of Rule 144 and any other rule or
regulation of the SEC that may at any time permit the Holders to sell the
Registrable Shares to the public without registration, the Company agrees to use
reasonable efforts: (i) to make and keep public information available, as
those terms are understood and defined in the General Instructions to Form S-3,
or any successor or substitute form, and in Rule 144, (ii) to file with the
SEC in a timely manner all reports and other documents required to be filed by
an issuer of securities registered under the Securities Act or the Exchange Act
and (iii) undertake any additional actions reasonably necessary to maintain
the availability of the Registration Statement or the use of Rule 144.  

	Selling Procedures.  Any sale of Registrable Shares pursuant
to the registration statement filed in accordance with Section 3 hereof shall be
subject to the following conditions and procedures:

	Updating the Prospectus.

	If the Company informs the selling Holder that the Registration
Statement or final prospectus then on file with the SEC is not current or
otherwise does not comply with the Securities Act, the Company shall use its
best efforts to provide to the selling Holder a current prospectus that complies
with the Securities Act as soon as practicable, but in no event later than three
business days after delivery of such notice.  The Company's obligation to update
the Registration Statement or final prospectus under this Section 9(a)(i) shall
not be subject to the limitations of Section 9(a)(ii) or (b) below.  
	If the Company requires more than three business days to update the
prospectus under Section 9(a)(i) above, the Company shall have the right to
delay the preparation of a current prospectus that complies with the Securities
Act without explanation to such Holder, subject to the limitations set forth in
Section 9(b) below, for a period of not more than 45 days (or two periods which
total not more than 90 days in the aggregate) during any 12-month
period.

	General.  Notwithstanding the foregoing, upon receipt of any
notice from the Company of (i) any request by the SEC or any other federal
or state governmental authority during the period of effectiveness of the
Registration Statement for amendments or supplements to the Registration
Statement or related prospectus or for additional information relating to the
Registration Statement, (ii) the issuance by the SEC or any other federal
or state governmental authority of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose, (iii) the receipt by the Company of any notification with respect
to the suspension of the qualification or exemption from qualification of any of
the Registrable Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (iv) the happening of any
event which makes any statement made in the Registration Statement or related
prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or which requires the making of any
changes in the Registration Statement or prospectus so that, in the case of the
Registration Statement, it will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, and that in the case of the
prospectus, it will not contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading or
(v) that, in the judgment of the Company's Board of Directors, it is
advisable to suspend use of the prospectus for a discrete period of time due to
pending corporate developments, public filings with the Commission or that there
exists material nonpublic information about the Company that the Board of
Directors, acting in good faith, determines not to disclose in a registration
statement, then the Company may suspend use of the prospectus (each a
"Suspension"), in which case the Company shall promptly so
notify each Holder and each Holder shall not dispose of Registrable Shares
covered by the Registration Statement or prospectus until copies of a
supplemented or amended prospectus are distributed to the Holders or until the
Holders are advised in writing by the Company that the use of the applicable
prospectus may be resumed; provided, however, that,
notwithstanding the foregoing, the Company may suspend use of the prospectus
pursuant to Sections 9(a)(ii), 9(b)(iv) and 9(b)(v), and an Holder may be
prohibited from selling or otherwise disposing of the Registrable Shares covered
by the Registration Statement or prospectus, on not more than two
occasions in total during any twelve-month period and for no more than 90
days in the aggregate during any such twelve-month period.  The Company shall
use its best efforts to ensure the use of the prospectus may be resumed as soon
as practicable.  The Company shall use its best efforts to obtain the withdrawal
of any order suspending the effectiveness of the Registration Statement, or the
lifting of any suspension of the qualification (or exemption from qualification)
of any of the securities for sale in any jurisdiction, at the earliest
practicable moment.  The Company shall, upon the occurrence of any event
contemplated by clause (iv), prepare a supplement or post-effective amendment to
the Registration Statement or a supplement to the related prospectus or any
document incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable Shares
being sold thereunder, such prospectus will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

	Assignment.  This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors and assigns.  In addition, and whether or not any express assignment
shall have been made, the provisions of this Agreement which are for the benefit
of the Holders shall also be for the benefit of and enforceable by any
subsequent holder of any Registrable Securities who has executed a copy of this
Agreement or otherwise indicated its agreement to be bound hereby.  Without
limitation on the Holders' rights to transfer Registrable Securities, the
Company acknowledges that any Holder may, at any time, transfer any of the
Registrable Securities which they may own, beneficially or of record, to
(a) their affiliates, or (b) their partner(s), holder(s), security
holder(s) or beneficial holder(s) pursuant to their organization documents or
other agreements, and that, upon the consummation of any such transfer, the
provisions of this Agreement shall be binding upon and inure to the benefit of
each transferee of such Registrable Securities.

	Entire Agreement.  This Agreement (including the exhibits
hereto and the other agreements incorporated by reference herein) constitutes
and contains the entire agreement and understanding of the parties with respect
to the subject matter hereof, and it also supersedes any and all prior
negotiations, correspondence, agreements or understandings with respect to the
subject matter hereof.  

	Miscellaneous.  

	Amendments.  This Agreement may not be amended, modified or
terminated, and no rights or provisions may be waived, except with the written
consent of the Majority Holders and the Company.

	Governing Law.  This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York.
Each party hereby irrevocably consents and submits to the jurisdiction of any
New York State or United States Federal Court sitting in the State of New York,
County of New York, over any action or proceeding arising out of or relating to
this Agreement and irrevocably consents to the service of any and all process in
any such action or proceeding by registered mail addressed to such party at its
address specified herein (or as otherwise noticed to the other party).  Each
party further waives any objection to venue in New York and any objection to an
action or proceeding in such state and county on the basis of forum non
conveniens.  Each party also waives any right to trial by jury.  

	Successors and Assigns.  This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors or assigns.  This Agreement shall also be
binding upon and inure to the benefit of any transferee of any of the
Registrable Shares.  Notwithstanding anything in this Agreement to the contrary,
if at any time any Holder shall cease to own any Registrable Shares, all of such
Holder's rights under this Agreement shall immediately terminate.

	Notices

	Any notices, reports or other correspondence (hereinafter
collectively referred to as "correspondence") required or
permitted to be given hereunder shall be sent by mail, courier (overnight or
same day) or fax or delivered by hand to the party to whom such correspondence
is required or permitted to be given hereunder (except that notices of
Suspensions or stop orders must be made by fax).  The date of giving any notice
shall be the date of its actual receipt.  
	All correspondence to the Company shall be addressed as follows: 

8X8, Inc.

   3151 Jay Street

   Santa Clara, California 95054

   Attention:  Chief Executive Officer

   Fax number:  (408) 980-0432

	All correspondence to any Holder shall be sent to the most recent address
furnished by the Holder to the Company.  
	Any Holder may change the address to which correspondence to it is to be
addressed by notification as provided for herein.

	Injunctive Relief.  The parties acknowledge and agree that in
the event of any breach of this Agreement, remedies at law may be inadequate,
and each of the parties hereto shall be entitled to seek specific performance of
the obligations of the other parties hereto and such appropriate injunctive
relief as may be granted by a court of competent jurisdiction.

	Attorneys' Fees.  If any action at law or in equity is
necessary to enforce or interpret any of the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorneys' fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.

	Severability.  If any provision of this Agreement is held by a
court of competent jurisdiction to be unenforceable under applicable law, such
provision shall be replaced with a provision that accomplishes, to the extent
possible, the original business purpose of such provision in a valid and
enforceable manner, and the balance of the Agreement shall be interpreted as if
such provision were so modified and shall be enforceable in accordance with its
terms.

	Aggregation of Shares.  Registrable Shares held or acquired by
affiliated entities or persons shall be aggregated together for the purpose of
determining the availability of any rights under this Agreement.

	Counterparts.  This Agreement may be executed in a number of
counterparts, any of which together shall for all purposes constitute one
Agreement, binding on all the parties hereto notwithstanding that all such
parties have not signed the same counterpart.

[Remainder of Page Intentionally Left Blank]

 

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

8X8, Inc.

By: _______________________________

  Name: 

   Title: 

HOLDER

AGE Investments, Inc.

By: _______________________________

  Name: 

   Title: 

 

HOLDER

Griffin Securities, Inc.

By: _______________________________

  Name: 

   Title: 

Exhibit A 

AGE Investments, Inc., a Delaware corporation

Griffin Securities, Inc., a New York corporation

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