Document:

PROMISSORY NOTE
                      Ft. Lauderdale, Florida

$50,000.00                                    DATE:  January 31, 2005

FOR VALUE RECEIVED the undersigned, jointly and severally, promise to
PAY TO THE ORDER OF:  Corrections Sys Intl inc.  THE PRINCIPAL SUM OF
Fifty Thousand and 00/100 Dollars ($50,000.00), together with interest
thereon at the rate of eight (8%) percent per annum until maturity, all
payable in lawful money of the United States of America, as follows:
   -  Principal due January 31, 2007
   -  Interest payable quarterly beginning April 15, 2006

All payments shall apply first to accrued interest, and the remainder,
if any to reduction of principal.   If any installment or principal or
interest is not paid when due, or upon any default in the performance
of any of the covenants or agreements of this note, or of any
instrument now or hereafter evidencing or securing this note or the
obligation represented hereby, the whole indebtedness (including
principal and interest) remaining unpaid, shall, at the option of the
holder become immediately due, payable and collectible, and while in
default, this note and deferred interest shall bear interest at the
rate of twelve (12%) percent per annum.

Each maker and endorser severally waives demand, protest and notice of
maturity, non-payment or protest and all requirements necessary to hold
each of them liable as makers and endorsers.   Each maker and endorser
further agrees, jointly and severally to pay all costs of collection
including reasonable attorney fees in case it becomes necessary to
protect the security hereof whether suit be brought or not.

LENDOR:                              LENDEE:
Corrections Sys Int'l                Proguard Protection Services, Inc.

By: /s/ Norman Becker                By: /s/ Frank R. Bauer
   ------------------                    ------------------
Normal Becker, President                 Frank R. Bauer, President

                                     Sworn to and subscribed before me
                                     This 14th day of March, 2005
                                     By Frank R. Bauer, who is
                                     __ Personally known to mer
                                     _x_ Produced ID   Fla. I.D.
                                     /s/Ralene Peterson
                                     -----------------------
                                     Notary Public
                                     My Commission Expires 01/17/2006

                                     SEALPROMISSORY NOTE
                      Ft. Lauderdale, Florida

$50,000.00                                       DATE:  March 15, 2004

FOR VALUE RECEIVED the undersigned, jointly and severally, promise to
PAY TO THE ORDER OF:  Corrections Sys Intl THE PRINCIPAL SUM OF Fifty
Thousand and 00/100 Dollars ($50,000.00), together with interest
thereon at the rate of eight (8%) percent per annum until maturity, all
payable in lawful money of the United States of America, as follows:
   -  Principal due March 15, 2006
   -  Interest payable quarterly beginning March 15, 2004
   -  Note is convertible into 150,000 of Proguard Protection Services,
Inc. common stock at anytime prior to March 15, 2006 at the option of
Corrections Systems Int'l only.

All payments shall apply first to accrued interest, and the remainder,
if any to reduction of principal.   If any installment or principal or
interest is not paid when due, or upon any default in the performance
of any of the covenants or agreements of this note, or of any
instrument now or hereafter evidencing or securing this note or the
obligation represented hereby, the whole indebtedness (including
principal and interest) remaining unpaid, shall, at the option of the
holder become immediately due, payable and collectible, and while in
default, this note and deferred interest shall bear interest at the
rate of twelve (12%) percent per annum.

Each maker and endorser severally waives demand, protest and notice of
maturity, non-payment or protest and all requirements necessary to hold
each of them liable as makers and endorsers.   Each maker and endorser
further agrees, jointly and severally to pay all costs of collection
including reasonable attorney fees in case it becomes necessary to
protect the security hereof whether suit be brought or not.

LENDOR:                              LENDEE:
Corrections Sys Int'l                Proguard Protection Services, Inc.

By: /s/ Norman Becker                By: /s/ Frank R. Bauer
   ------------------                    ------------------
Normal Becker, President                 Frank R. Bauer, President

                                     Sworn to and subscribed before me
                                     This 10th day of March, 2004
                                     By Frank R. Bauer, who is
                                     __ Personally known to mer
                                     _x_ Produced ID   Fla. D.L. #B600-
                                     276-45-053-0
                                     /s/Marianne E. Neiley
                                     -----------------------
                                     Notary Public
                                     My Commission Expires 09/06/2006

                                     SEALExhibit 10.1

    
      

    

    Exhibit
      10.1

    

    EXECUTION
      COPY

     

     

     

    
      

      

    

    

    

     

    

    MEMBERSHIP
      INTERESTS CONTRIBUTION AGREEMENT

    

    

    by
      and
      among

    

    

    

    WATERFORD
      HOSPITALITY GROUP, LLC

    

    and

    

    MYSTIC
      HOTEL INVESTORS, LLC

    

    and

    

    

    HERSHA
      HOSPITALITY LIMITED PARTNERSHIP

    

    

     

     

    Dated
      as
      of: June 15, 2005

    
 

    

    

    
      

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    TABLE
      OF CONTENTS

    

    
      
        	
                1.

              	 	
                DEFINITIONS.

              	
                2

              
	
                2.

              	 	
                CONTRIBUTION
                  OF THE MEMBERSHIP INTERESTS.

              	
                5

              
	
                3.

              	 	
                ISSUANCE
                  OF MEMBERSHIP INTERESTS AND CASH PAYMENT.

              	
                5

              
	 	 	
                3.1

              	
                Cash
                  Payments by Investor.

              	
                5

              
	 	 	
                3.2

              	
                Cash
                  Payment to Contributor.

              	
                6

              
	 	 	
                3.3

              	
                Payment
                  of Costs

              	
                6

              
	 	 	
                3.4

              	
                Issuance
                  to Contributor.

              	
                6

              
	 	 	
                3.5

              	
                Issuance
                  to Investor

              	
                6

              
	
                4.

              	 	
                DEPOSIT;
                  DUE DILIGENCE REVIEW.

              	
                6

              
	 	 	
                4.1

              	
                Deposit.

              	
                6

              
	 	 	
                4.2

              	
                Payment.

              	
                6

              
	 	 	
                4.3

              	
                Escrow
                  Terms.

              	
                7

              
	 	 	
                4.4

              	
                Protection
                  of Escrow Agent.

              	
                7

              
	 	 	
                4.5

              	
                Due
                  Diligence Review

              	
                7

              
	
                5.

              	 	
                MANAGEMENT
                  AND OPERATING COVENANTS PRIOR TO CLOSING.

              	
                9

              
	 	 	
                5.1

              	
                Pre-Closing
                  Actions.

              	
                9

              
	 	 	
                5.2

              	
                Property
                  Condition.

              	
                10

              
	 	 	
                5.3

              	
                Franchise
                  Agreements

              	
                10

              
	
                6.

              	 	
                ADJUSTMENTS
                  AND PRORATIONS.

              	
                10

              
	 	 	
                6.1

              	
                Adjusted
                  Items.

              	
                10

              
	 	 	
                6.2

              	
                Proration
                  of Inventory

              	
                13

              
	 	 	
                6.3

              	
                Basis
                  of Adjustments.

              	
                13

              
	 	 	
                6.4

              	
                Accounts
                  Receivable.

              	
                13

              
	 	 	
                6.5

              	
                No
                  Overcharge of Tenants.

              	
                14

              
	 	 	
                6.6

              	
                Closing
                  Statement; Post-Closing Adjustment

              	
                14

              
	
                7.

              	 	
                TITLE
                  AND SURVEY.

              	
                15

              
	 	 	
                7.1

              	
                Title
                  Commitment and Survey.

              	
                15

              
	 	 	
                7.2

              	
                Investor’s
                  Review.

              	
                15

              
	 	 	
                7.3

              	
                Correction
                  of Defects.

              	
                16

              
	 	 	
                7.4

              	
                Failure
                  to Correct.

              	
                16

              
	 	 	
                7.5

              	
                Effect
                  of Corrected Defects.

              	
                16

              
	
                8.

              	 	
                REPRESENTATIONS,
                  WARRANTIES AND COVENANTS OF CONTRIBUTOR.

              	
                17

              
	 	 	
                8.1

              	
                Organization
                  and Power.

              	
                17

              
	 	 	
                8.2

              	
                Authority.

              	
                17

              
	 	 	
                8.3

              	
                Consents.

              	
                17

              
	 	 	
                8.4

              	
                Violations.

              	
                17

              
	 	 	
                8.5

              	
                No
                  Litigation.

              	
                18

              
	 	 	
                8.6

              	
                No
                  Attachments or Bankruptcy Events.

              	
                18

              
	 	 	
                8.7

              	
                Environmental
                  Matters.

              	
                18

              
	 	 	
                8.8

              	
                Space
                  Leases.

              	
                18

              
	 	 	
                8.9

              	
                Ground
                  Leases.

              	
                19

              
	 	 	
                8.10

              	
                Assessments.

              	
                19

              
	 	 	
                8.11

              	
                Other
                  Agreements.

              	
                19

              
	 	 	
                8.12

              	
                Service
                  Contracts.

              	
                19

              

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        
          	 	 	
                  8.13

                	
                  Permits.

                	
                  20

                
	 	 	
                  8.14

                	
                  Taxes.

                	
                  20

                
	 	 	
                  8.15

                	
                  Employees

                	
                  20

                
	 	 	
                  8.16

                	
                  Signatories.

                	
                  21

                
	 	 	
                  8.17

                	
                  No
                    Conflicts with Agreements.

                	
                  21

                
	 	 	
                  8.18

                	
                  No
                    Options.

                	
                  21

                
	 	 	
                  8.19

                	
                  Franchise
                    Agreements.

                	
                  21

                
	 	 	
                  8.20

                	
                  Existing
                    Debt.

                	
                  21

                
	 	 	
                  8.21

                	
                  Owner
                    Entities.

                	
                  22

                
	 	 	
                  8.22

                	
                  Insurance.

                	
                  22

                
	 	 	
                  8.23

                	
                  Condemnation
                    Proceedings; Roadways.

                	
                  22

                
	 	 	
                  8.24

                	
                  Financial
                    Statements.

                	
                  22

                
	 	 	
                  8.25

                	
                  Capitalization.

                	
                  22

                
	 	 	
                  8.26

                	
                  Owner
                    Entity Investments.

                	
                  22

                
	 	 	
                  8.27

                	
                  Compliance
                    with Legal Requirements.

                	
                  23

                
	 	 	
                  8.28

                	
                  Liabilities.

                	
                  23

                
	 	 	
                  8.29

                	
                  Prior
                    Activities of the Owner Entities.

                	
                  23

                
	 	 	
                  8.30

                	
                  Survival.

                	
                  23

                
	
                  9.

                	 	
                  REPRESENTATIONS,
                    WARRANTIES AND COVENANTS OF INVESTOR.

                	
                  23

                
	 	 	
                  9.1

                	
                  Authority.

                	
                  23

                
	 	 	
                  9.2

                	
                  Signatories.

                	
                  23

                
	 	 	
                  9.3

                	
                  No
                    Litigation.

                	
                  23

                
	 	 	
                  9.4

                	
                  No
                    Agency.

                	
                  24

                
	 	 	
                  9.5

                	
                  Securities
                    Matters.

                	
                  24

                
	 	 	
                  9.6

                	
                  No
                    Registration.

                	
                  24

                
	 	 	
                  9.7

                	
                  Survival.

                	
                  24

                
	
                  10.

                	 	
                  DAMAGE
                    AND DESTRUCTION.

                	
                  24

                
	
                  11.

                	 	
                  EMINENT
                    DOMAIN.

                	
                  25

                
	
                  12.

                	 	
                  EXISTING
                    DEBT.

                	
                  25

                
	 	 	
                  12.1

                	
                  Repayment
                    of Existing Debt

                	
                  25

                
	 	 	
                  12.2

                	
                  Refinancings

                	
                  25

                
	 	 	
                  12.3

                	
                  Costs

                	
                  26

                
	
                  13.

                	 	
                  PART
                    OWNED PROPERTY.

                	
                  26

                
	
                  14.

                	 	
                  CONDITIONS
                    TO CLOSING.

                	
                  27

                
	 	 	
                  14.1

                	
                  Conditions
                    to Investor’s Obligations.

                	
                  27

                
	 	 	
                  14.2

                	
                  Conditions
                    to Contributor’s Obligations

                	
                  27

                
	
                  15.

                	 	
                  THE
                    CLOSING.

                	
                  28

                
	 	 	
                  15.1

                	
                  Location
                    and Date.

                	
                  28

                
	 	 	
                  15.2

                	
                  Contributions
                    and Payments.

                	
                  28

                
	 	 	
                  15.3

                	
                  Contributor’s
                    Closing Deliveries.

                	
                  29

                
	 	 	
                  15.4

                	
                  Management
                    Agreements.

                	
                  30

                
	 	 	
                  15.5

                	
                  Lessee
                    Formation and Leases.

                	
                  30

                
	 	 	
                  15.6

                	
                  Fees
                    and Costs.

                	
                  30

                
	 	 	
                  15.7

                	
                  Further
                    Assurances Regarding Documentation.

                	
                  31

                
	
                  16.

                	 	
                  ASSIGNMENT;
                    DESIGNATION OF GRANTEES.

                	
                  31

                
	
                  17.

                	 	
                  TERMINATION
                    OF THE AGREEMENT; DEFAULT REMEDIES; INDEMNITIES.

                	
                  31

                

        

         

        
          
            
            

          

          
            ii

            
              

            

          

          
            
            

          

        

         

        
          	 	 	
                  17.1

                	
                  Failure
                    to Satisfy Conditions Precedent.

                	
                  31

                
	 	 	
                  17.2

                	
                  Investor’s
                    Remedies.

                	
                  32

                
	 	 	
                  17.3

                	
                  Contributor’s
                    Remedies.

                	
                  32

                
	 	 	
                  17.4

                	
                  Nature
                    of Liquidated Damages

                	
                  32

                
	 	 	
                  17.5

                	
                  Legal
                    Fees.

                	
                  33

                
	 	 	
                  17.6

                	
                  Agreements
                    to Indemnify.

                	
                  33

                
	
                  18.

                	 	
                  BROKERS.

                	
                  34

                
	
                  19.

                	 	
                  PRESS
                    RELEASES; CONFIDENTIALITY.

                	
                  34

                
	
                  20.

                	 	
                  MISCELLANEOUS.

                	
                  35

                
	 	 	
                  20.1

                	
                  Amendment

                	
                  35

                
	 	 	
                  20.2

                	
                  Waivers

                	
                  35

                
	 	 	
                  20.3

                	
                  No
                    Assignments; Binding Effect

                	
                  35

                
	 	 	
                  20.4

                	
                  Notices

                	
                  35

                
	 	 	
                  20.5

                	
                  Certain
                    Waivers

                	
                  36

                
	 	 	
                  20.6

                	
                  Preservation
                    of Intent

                	
                  36

                
	 	 	
                  20.7

                	
                  Entire
                    Agreement

                	
                  36

                
	 	 	
                  20.8

                	
                  Counterparts

                	
                  36

                
	 	 	
                  20.9

                	
                  Governing
                    Law; Venue

                	
                  36

                

        

      

    

    

    

    EXHIBITS

    

    
      	
              Exhibit
                1.1

            	
              Membership
                Interests and Owner Entities

            
	
              Exhibit
                1.2

            	
              Description
                of the Property

            
	
              Exhibit
                1.3

            	
              Form
                of LLC Agreement

            
	
              Exhibit
                1.4

            	
              Asset
                Management Agreement

            
	
              Exhibit
                1.5

            	
              Lessee
                LLC Agreement

            
	
              Exhibit
                1.6

            	
              Lease
                Agreement

            
	
              Exhibit
                1.7

            	
              Management
                Agreement

            
	
              Exhibit
                1.8

            	
              Allocation
                of the Contribution Value

            
	
              Exhibit
                1.9

            	
              Permitted
                Exceptions

            
	
              Exhibit
                1.10

            	
              Existing
                Debt and Reserves

            
	
              Exhibit
                8.3

            	
              Required
                Consents

            
	
              Exhibit
                8.5

            	
              Litigation

            
	
              Exhibit
                8.7

            	
              Environmental
                Matters

            
	
              Exhibit
                8.8

            	
              Space
                Leases and Security Deposits

            
	
              Exhibit
                8.12

            	
              Service
                Contracts 

            
	
              Exhibit
                8.13

            	
              Pending
                Applications

            
	
              Exhibit
                8.19

            	
              Franchise
                Agreements

            
	
              Exhibit
                8.21

            	
              Owner
                Entities, Part Owned Property Owners and Minority Interest
                holders

            
	
              Exhibit
                8.22

            	
              Insurance

            
	
              Exhibit
                8.28

            	
              Liabilities

            
	
              Exhibit
                9.5

            	
              Securities
                Law Matters

            
	
              Exhibit
                15.3.1

            	
              Omnibus
                Assignment

            

    

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    

    INDEX
      OF DEFINED TERMS

    

    
      	
              1933
                Act

            	
              24

            	 	
              Lessee
                Company Affiliate

            	
              2

            
	
              Adjustment
                Amount

            	
              2

            	
               

            	
              Lessee
                LLC Agreement

            	
              2

            
	
              Agreement

            	
              1

            	 	
              Liabilities

            	
              3

            
	
              Asset
                Management Agreement

            	
              1

            	 	
              LLC
                Agreement

            	
              1

            
	
              Asset
                Manager

            	
              1

            	 	
              Management
                Agreement

            	
              2

            
	
              Cash
                Payment

            	
              5

            	 	
              Manager

            	
              2

            
	
              CBA

            	
              20

            	 	
              Managing
                Member

            	
              1

            
	
              Closing

            	
              2

            	 	
              Membership
                Interest

            	
              1

            
	
              Closing
                Date

            	
              28

            	 	
              Minority
                Interest Acquisition Expenses

            	
              26

            
	
              Closing
                Statement

            	
              14

            	 	
              Minority
                Interests

            	
              26

            
	
              Commission

            	
              8

            	 	
              Mortgage

            	
              3

            
	
              Company

            	
              1

            	 	
              Mortgage
                Escrows

            	
              12

            
	
              Contribution
                Value

            	
              2

            	 	
              Mystic

            	
              1

            
	
              Contributor

            	
              1

            	 	
              Outside
                Accountants

            	
              15

            
	
              Credit
                Reserves

            	
              12

            	 	
              Outside
                Closing Date

            	
              28

            
	
              Cutoff
                Time

            	
              10

            	 	
              Owner
                Entities

            	
              1

            
	
              Debt

            	
              3

            	 	
              Part
                Owned Property

            	
              4

            
	
              Deferred
                Property

            	
              28

            	 	
              Part
                Owned Property Lessee Company

            	
              30

            
	
              Deferred
                Property Outside Closing Date

            	
              28

            	 	
              Permitted
                Exceptions

            	
              4

            
	
              Development
                Assets

            	
              3

            	 	
              Person

            	
              4

            
	
              Effective
                Date

            	
              35

            	 	
              Personal
                Property

            	
              4

            
	
              ERISA

            	
              20

            	 	
              PIP

            	
              10

            
	
              Escrow
                Agent

            	
              3

            	 	
              Plans

            	
              20

            
	
              Existing
                Debt

            	
              3

            	 	
              Properties

            	
              1,
                4

            
	
              Existing
                Debt Documents

            	
              3

            	 	
              Property

            	
              1,
                4

            
	
              Existing
                Lender

            	
              3

            	 	
              Repaid
                Debt

            	
              34

            
	
              Franchise
                Agreement

            	
              3

            	 	
              Representatives

            	
              7

            
	
              Franchise
                Fees

            	
              10

            	 	
              Review
                Period

            	
              4

            
	
              Franchisor

            	
              10

            	 	
              Security
                Deposits

            	
              4

            
	
              Ground
                Lease Estoppel Certificates

            	
              29

            	 	
              Service
                Contracts

            	
              4

            
	
              Ground
                Leases

            	
              19

            	 	
              Space
                Lease(s)

            	
              4

            
	
              Guest
                Ledger Receivables

            	
              11

            	 	
              Stabilized
                Assets

            	
              5

            
	
              Information

            	
              35

            	 	
              Subsidiaries

            	
              5

            
	
              Initial
                Deposit

            	
              3

            	 	
              Survey

            	
              15

            
	
              Investor

            	
              1

            	 	
              Tax

            	
              5

            
	
              Investor
                Lessee Member

            	
              1

            	 	
              Tax
                Return

            	
              5

            
	
              IRC

            	
              3

            	 	
              Title
                Commitment

            	
              15

            
	
              IRS

            	
              3

            	
               

            	
              Title
                Company

            	
              5

            
	
              Lease
                Agreement

            	
              2

            	
               

            	
              Title
                Correction

            	
              16

            
	
              Lessee
                Company

            	
              2

            	 	
              Waterford

            	
              1

            

    

     

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

    MEMBERSHIP
      INTERESTS CONTRIBUTION AGREEMENT

    

    This
      Membership Interests Contribution Agreement is made as of the 15th
      day of
      June, 2005 (this “Agreement”),
      by
      and among: 

    

    Mystic
      Hotel Investors, LLC, a Delaware limited liability company (“Mystic”),
      having an address at 914 Hartford Turnpike, P.O. Box 715, Waterford, CT 06385,
      

    

    Waterford
      Hospitality Group, LLC a Delaware limited liability company (“Waterford”)
      having
      an address at 914 Hartford Turnpike, P.O. Box 715, Waterford, CT 06385
      (Waterford and Mystic, collectively, “Contributor”),
      and

    

    Hersha
      Hospitality Limited Partnership, a Virginia limited partnership (“Investor”)
      having
      an address at 510 Walnut Street, 9th
      fl.,
      Philadelphia, PA 19106.

     

    WITNESSETH:

    

    WHEREAS,
      Contributor is the owner of the membership interests specified on Exhibit
      1.1
      (the
“Membership
      Interests”)
      in the
      limited liability companies (the “Owner
      Entities”)
      specified on Exhibit
      1.1;

    

    WHEREAS,
      each of the Owner Entities owns or has a leasehold interest in the respective
      land, as identified on Exhibit
      1.2,
      and the
      hotel and other improvements located thereon (each, individually, a
“Property”
      and
      collectively, the “Properties”),
      all
      as more particularly described on Exhibit
      1.2;

    

    WHEREAS,
      Contributor and Investor desire to form a limited liability company under the
      laws of the State of Delaware (the “Company”),
      and to
      enter into a LLC Agreement in the form attached hereto as Exhibit
      1.3
      (the
“LLC
      Agreement”)
      with
      respect to the Company, pursuant to which LLC Agreement Contributor shall
      contribute to the Company the Membership Interests;

    

    Contributor
      desires to form or cause to be formed a limited liability company under the
      laws
      of the State of Delaware to serve as the managing member of the Company, unless
      Contributor, itself, shall serve in that capacity (in either case, “Managing
      Member”);

    

    WHEREAS,
      Managing Member shall act as the managing member of the Company and Investor
      shall become a non-managing member of the Company;

    

    WHEREAS,
      Contributor and Investor desire to cause the Owner Entities (or the Manager)
      to
      enter into Asset Management Agreements in the form attached as Exhibit
      1.4
      (the
“Asset
      Management Agreement”)
      with an
      affiliate of Investor (“Asset
      Manager”)
      with
      respect to all of the Properties;

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    WHEREAS,
      Contributor and Investor, each through a respective Affiliate (“Investor
      Lessee Member”)
      desire
      to form a limited liability company under the laws of the State of Delaware
      (the
“Lessee
      Company”),
      and to
      enter into an LLC Agreement in the form attached hereto as Exhibit
      1.5
      (the
“Lessee
      LLC Agreement”);

    

    WHEREAS,
      Contributor and Investor desire to cause each of the Owner Entities to lease
      its
      respective Property to the Lessee Company (or an Affiliate of the Lessee Company
      with an equity structure reflecting the ownership of the relevant Owner Entity,
      for Part Owned Properties each, a “Lessee
      Company Affiliate”)
      pursuant to a Lease Agreement substantially in the form attached hereto as
      Exhibit
      1.6
      (the
“Lease
      Agreement”);
      and

    

    WHEREAS,
      Contributor and Investor desire to cause the Lessee Company and each Lessee
      Company Affiliate to enter into a Management Agreement with Waterford Hotel
      Group, Inc., a Connecticut corporation (the “Manager”)
      in the
      form attached hereto as Exhibit
      1.7
      (the
“Management
      Agreement”)
      for
      each Property.

    

    NOW,
      THEREFORE, in consideration of Ten Dollars ($10) and other good and valuable
      consideration, the receipt and legal sufficiency of which are hereby
      acknowledged, and the mutual covenants herein contained, the parties hereto
      hereby agree as follows:

     

     

    
      	
              1.

            	
              DEFINITIONS.

            

    

    

    As
      used
      herein, defined terms shall have the meanings given to them in the text of
      this
      Agreement (refer to the Index of Defined Terms in the Table of Contents), and
      in
      addition, the following terms shall have the meanings indicated. 

    

    “Adjustment
      Amount”:
      the net
      amount of all adjustments (as set forth in Article
      6
      or
      elsewhere in this Agreement) subtracted from (or, in the case of a negative
      Adjustment Amount, added to) the Contribution Value of the Properties. The
      Adjustment Amount will begin at zero and decrease with amounts owed to
      Contributor and increase with amounts owed to Investor or the Company, as set
      forth herein.

    

    “Closing”:
      the
      transfer by Contributor of the Membership Interests to the Company, the payment
      (in cash and in kind) of the Contribution Value in connection therewith and
      the
      Company’s issuance of membership interests to Investor and Contributor, each
      subject to and otherwise in accordance with the terms of this
      Agreement.

    

    “Contribution
      Value”:
      as of
      the Closing: Two Hundred Forty-Eight Million Three Hundred Twenty-Five Thousand
      Dollars ($248,325,000) (which the parties have agreed to allocate among the
      Properties in accordance with Exhibit
      1.8
      attached
      hereto), adjusted as follows: (i) plus or minus the Adjustment Amount, (ii)
      minus the amount of any Existing Debt (interest and principal) outstanding
      as of
      the Closing, (iii) minus any debt obligations incurred after the date hereof
      in
      replacement of Repaid Debt, (iv) minus an amount equal to the product of the
      allocated value of each Part Owned Property, as adjusted by the result of items
      (i), (ii) and (iii) with respect to such Part Owned Property, multiplied by
      the
      percentage equity ownership of the Minority Interests with respect to such
      Part
      Owned Property, (v) plus any Minority Interest Acquisition Expenses, and (vi)
      plus any costs and expenses that the members have agreed that the Company may
      incur, or have otherwise agreed to treat as Company expenses, as of the Closing
      Date pursuant to the terms of this Agreement. The parties shall confirm the
      final Contribution Value pursuant to the Closing Statement as of the Closing
      Date. 

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    “Debt”
      of any
      Person at any date means, without duplication, (a) all obligations of such
      Person for borrowed money, (b) all obligations of such Person evidenced by
      bonds, debentures, notes or other similar instruments, (c) all obligations
      of
      such Person to pay the deferred purchase price of property or services, except
      trade accounts payable arising in the ordinary course of business, (d) all
      obligations of such Person under leases which are or should be, in accordance
      with GAAP, recorded as capital leases in respect of which such Person is liable,
      (e) all obligations of such Person to purchase securities (or other property)
      which arise out of or in connection with the sale of the same or substantially
      similar securities (or property), (f) all deferred obligations of such Person
      to
      reimburse any bank or other Person in respect of amounts paid or advanced under
      a letter of credit or other instrument, (g) all Debt of others secured by a
      Lien
      on any asset of such Person, whether or not such Debt is assumed by such Person,
      and (h) all Debt of others guaranteed directly or indirectly by such Person
      or
      as to which such Person has an obligation substantially the economic equivalent
      of a guarantee.

    

    “Development
      Assets”
      the
      following Properties: Hartford Hilton, Hartford, CT; and Hartford Marriott,
      Hartford, CT, as more particularly described on Exhibit
      1.2.

    

    “Escrow
      Agent”:
      First
      American Title Insurance Company.

    

    “Existing
      Debt”:
      all
      Debt (including principal and interest) of the Owner Entities, including all
      Debt secured by a lien on certain of the Properties in favor of the lenders
      (in
      each case, an “Existing
      Lender”).

    

    “Existing
      Debt Documents”:
      all
      documents, agreements, instruments and understandings evidencing, securing
      or
      otherwise relating to the Existing Debt.

    

    “Franchise
      Agreement”:
      any
      franchise agreement or similar agreement affecting any Property.

    

    “Initial
      Deposit”:
      a
      deposit in the amount of One Million Dollars ($1,000,000), payable by Investor,
      and a deposit in the amount of Two Hundred Fifty Thousand Dollars ($250,000),
      payable by Contributor.

    

    “IRC”:
      the
      Internal Revenue Code of 1986, as amended, and as it may further be amended
      from
      time to time, and any successor statutes thereto.

    

    “IRS”:
      the
      Internal Revenue Service, an agency of the United States Department of the
      Treasury.

    

    “Liabilities”:
      monetary claims, debts, liabilities, obligations, duties and responsibilities
      of
      any kind and description, whether absolute or contingent, direct or indirect,
      known or unknown or matured or unmatured.

    

    “Mortgage”:
      each
      mortgage securing any of the Existing Debt with respect to the relevant
      Property.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    “Part
      Owned Property”:
      any
      Property that is not wholly owned by Contributor, the Company or by a wholly
      owned subsidiary of Contributor or the Company. On the date hereof, the
      following Properties are Part Owned Property:

    

    Hartford
      Marriott, Hartford, CT;

    Hartford
      Hilton, Hartford, CT;

    Dunkin
      Donuts, 790 West St., Southington, CT; 

    Residence
      Inn Southington, Southington, CT; and

    Residence
      Inn by Marriott, Danbury, CT.

    

    “Permitted
      Exceptions”: the
      Franchise Agreements, the Existing Debt Documents, the Service Contracts, the
      Space Lease, the Ground Lease, the documents identified on Exhibit
      1.9,
      and any
      matter indicated on a Title Commitment or Survey and not objected to by Investor
      prior to the Closing.

    

    “Person”:
      any
      individual, partnership, limited liability company, joint venture, corporation,
      trust, or other similar entity.

    

    “Personal
      Property”: any
      furniture, furnishings, tools, equipment, supplies (consumable and otherwise)
      and other movable property (if any) located at and used in connection with
      the
      ownership, use and operation of the Properties or portion thereof that are
      now
      or at the Closing owned by Contributor or any Owner Entity; files that are
      in
      the possession of Contributor or any Owner Entity and are necessary or
      appropriate for the efficient operation of the Properties or a portion thereof,
      including sepias, drawings, surveys, plans and specifications; and all licenses,
      permits, certificates of occupancy (or local equivalent) in the possession
      of or
      available to Contributor or any Owner Entity. 

    

    “Property”
      and
“Properties”: those
      plots, pieces and parcels of land described on Exhibit
      1.2,
      and all
      of the buildings, fixtures and equipment (including permanent signs) and other
      improvements thereon, together with the Personal Property, the tenant’s interest
      under the Ground Lease, the landlord’s interest under the Space Leases, the
      Owner’s interest under the Franchise Agreements and all the other assets
      described in Article
      2
      pertaining thereto. 

    

    “Repaid
      Debt”:
      any
      Existing Debt to be repaid on or before the Closing Date (including principal
      and interest).

    

    “Security
      Deposits”:
      all
      security deposits held by Contributor pursuant to any Space Leases, which
      Security Deposits Contributor shall assign to the Company at the
      Closing.

    

    “Service
      Contracts”: all
      written or oral agreements (including purchase orders) pursuant to which goods,
      services, supplies or other items are furnished on a continuing basis for the
      operation of the Properties or any portion thereof.

    

    “Space
      Lease(s)”: all
      tenant space leases, licenses, concessions or other occupancy or use agreements,
      including all written modifications, addenda and supplements thereto and
      guarantees thereof, applicable to the Properties or any portion
      thereof.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Stabilized
      Assets”:
      the
      following Properties: (1) Residence Inn by Marriott and Whitehall Mansion,
      Mystic, CT; (2) Courtyard by Marriott, Warwick, RI; (3) Courtyard by Marriott
      and Rosemont Suites, Norwich, CT; (4) SpringHill Suites by Marriott, Waterford,
      CT; (5) Mystic Marriott Hotel and Spa, Groton, CT; (6) Residence Inn by
      Marriott, Southington, CT, and ancillary Dunkin Donuts; (7) Residence Inn by
      Marriott, Danbury, CT.

    

    “Subsidiary”:
      any
      Person in which a Person owns, directly or indirectly, a majority of the member
      interests, partnership interests, or similar equity interests and of which
      that
      Person, as the case may be, has the power, directly or through a Subsidiary,
      to
      direct the management and policies of such Person.

    

    “Tax”:
      any
      federal, state, local or foreign income, gross receipts, license, payroll,
      employment, excise, severance, stamp, occupation, premium, windfall profits,
      environmental, customs duties, capital stock, franchise, profits, withholding,
      social security (or similar), unemployment, disability, real property, personal
      property, sales, use, transfer, registration, value added, alternative or add-on
      minimum, estimated, or other tax of any kind whatsoever, including any interest,
      penalty, or addition thereto, whether disputed or not.

    

    “Tax
      Return”:
      any
      return, declaration, report, claim for refund, or information return or
      statement relating to Taxes, including any schedule or attachment thereto,
      and
      including any amendment thereof.

    

    “Title
      Company”:
      First
      American Title Insurance Company.

    

    A
      reference to any agreement, budget, document or schedule shall include such
      agreement, budget, document or schedule as revised, amended, modified or
      supplemented from time to time in accordance with its terms and the terms of
      this Agreement. The singular includes the plural and the plural includes the
      singular. The words “include”, “includes” and “including” are not limiting.
      Reference to a particular “Section” or “Articles” refers to that section or
      articles of this Agreement unless otherwise indicated. The words “herein”,
“hereof”, “hereunder” and words of like import shall refer to this Agreement as
      a whole and not to any particular section or subdivision of this
      Agreement.

    

    
      	
              2.

            	
              CONTRIBUTION
                OF THE MEMBERSHIP INTERESTS.

            

    

    

    On
      the
      terms and subject to the conditions set forth herein, at the Closing,
      Contributor shall contribute and convey to the Company and the Company shall
      accept from Contributor the Membership Interests free and clear of all liens,
      claims, encumbrances or interests of others.

    

    
      	
              3.

            	
              ISSUANCE
                OF MEMBERSHIP INTERESTS AND CASH
                PAYMENT.

            

    

     

    Subject
      to the terms, conditions and provisions of this Agreement, at the
      Closing:

     

    3.1   Cash
      Payments by Investor.
      Investor
      shall contribute to the Company as a capital contribution a cash payment (the
      “Cash Payment”)
      in
      presently available funds in the amount of sixty-six and seven-tenths percent
      (66.7%) of the adjusted Contribution Value attributable to the Stabilized
      Assets, plus fifty percent (50%) of the adjusted Contribution Value attributable
      to the Development Assets. 

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    3.2   Cash
      Payment to Contributor.
      The
      Company shall distribute to Contributor the Cash Payment.

     

    3.3   Payment
      of Costs.
      Investor shall pay to the Company 57.96% of the costs payable by the Company
      pursuant to Section 15.6.1 and Contributor shall pay to the Company
      42.04% of the costs payable by the Company pursuant to Section 15.6.1,
      unless any particular cost may reasonably be attributed to a specific Property,
      in which case Investor shall pay to the Company 50% of the costs, with respect
      to Development Assets, and 66.7% of the costs, with respect to Stabilized
      Assets, and Contributor shall pay to the Company 50% of the costs, with respect
      to Development Assets, and 33.3% of the costs, with respect to Stabilized
      Assets.

     

    3.4   Issuance
      to Contributor.
      The
      Company shall issue to Contributor, pursuant to the LLC Agreement, in partial
      consideration for the contribution of the Membership Interests, limited
      liability company interests in the Company with an initial Capital Account
      (as
      defined in the LLC Agreement) with respect to such limited liability company
      interest equal to thirty-three and three-tenths percent (33.3%) of
      the
      Contribution Value attributable to the Stabilized Assets and fifty percent
      (50%)
      of the Contribution Value attributable to the Development Assets. The parties
      acknowledge and agree that the contribution of the Membership Interests shall
      be
      treated as a part disguised sale, described in Section 707 of the IRC and the
      Treasury Regulations promulgated thereunder, part reimbursement of capital
      expenditures described in Treasury Regulations Section 1.707-4(d) and as a
      part
      capital contribution described in Section 721. 

     

    3.5   Issuance
      to Investor.
      The
      Company shall issue to Investor, pursuant to the LLC Agreement, limited
      liability company interests in the Company with an initial Capital Account
      (as
      defined in the LLC Agreement) with respect to such limited liability company
      interest equal sixty-six and seven-tenths percent (66.7%) of the Contribution
      Value attributable to the Stabilized Assets and fifty percent (50%) of the
      Contribution Value attributable to the Development Assets.

    

    
      	
              4.

            	
              DEPOSIT;
                DUE DILIGENCE REVIEW.

            

    

     

    4.1   Deposit.
      Within
      three days after the date hereof, Investor and Contributor shall each place
      their respective portions of the Initial Deposit in escrow with Escrow Agent.
      

     

    4.2   Payment.
      Escrow
      Agent shall invest the Initial Deposit in escrow in a money market fund or
      bank
      account paying interest or dividends, in Escrow Agent’s name, separate from its
      personal and other business accounts. Investor shall make all investment
      decisions; Contributor shall have no control over such investment decisions
      with
      respect to the escrowed funds. At the Closing, the Initial Deposit (plus all
      interest and dividends earned thereon) shall be paid to Contributor, and
      Investor shall receive a credit against the Cash Payment in the amount of the
      Initial Deposit deposited by it, and all interest and dividends earned thereon.
      If the Closing does not occur as a result of a default by Contributor, the
      Initial Deposit (plus all interest and dividends earned thereon) shall be paid
      to Investor. If the Closing does not occur as a result of a default by Investor,
      the Initial Deposit (plus all interest and dividends earned thereon) shall
      be
      paid to Contributor. If the Closing does not occur for any reason other than
      a
      default by Investor or Contributor, then Escrow Agent shall return the Initial
      Deposit to Investor and Contributor in the amounts deposited by them (plus
      all
      interest and dividends earned thereon). The parties shall furnish Escrow Agent
      with their respective tax identification numbers. Contributor and the Company
      shall share equally all escrow fees, if any, charged by Escrow
      Agent.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    4.3   Escrow
      Terms.
      Escrow
      Agent shall hold the Initial Deposit as set forth in Section 4.2 unless
      (i) Escrow Agent receives any instructions jointly executed by Investor and
      Contributor directing Escrow Agent with respect to distribution of the Initial
      Deposit, in which event Escrow Agent shall forthwith apply the Initial Deposit
      as instructed without any further requirement; or (ii) Investor or Contributor
      makes a written demand upon Escrow Agent for the Initial Deposit accompanied
      by
      an affidavit signed by the party making the demand stating sufficient facts
      to
      show that said party is entitled to receive the Initial Deposit pursuant to
      the
      terms of this Agreement, provided that the following procedures of this Section
      shall have been complied with. Upon receipt of such demand, Escrow Agent shall
      give ten days’ written notice to the other party of such demand and of Escrow
      Agent’s intention to remit the Initial Deposit to the party making the demand on
      the stated date, together with a copy of the affidavit. If Escrow Agent does
      not
      receive a written objection before the proposed date for remitting the Initial
      Deposit, Escrow Agent is hereby authorized to so remit. However, if Escrow
      Agent
      actually receives written objection from any other party before the proposed
      date on which the Initial Deposit is to be remitted, Escrow Agent shall continue
      to hold the Initial Deposit until otherwise directed by joint written
      instructions from Investor and Contributor or until a final judgment by an
      appropriate court is made. In the event of such dispute, Escrow Agent may
      deposit the Initial Deposit with an appropriate court and, after giving written
      notice of such action to the parties, Escrow Agent shall have no further
      obligations with respect to the Initial Deposit.

     

    4.4   Protection
      of Escrow Agent.
      The
      parties acknowledge that Escrow Agent is acting as a stakeholder at their
      request and for their convenience, that Escrow Agent shall not be deemed to
      be
      the agent of either of the parties, and Escrow Agent shall not be liable to
      the
      parties for any act or omission on its part unless taken or suffered in bad
      faith or in willful or negligent disregard of this Agreement. Contributor and
      Investor shall jointly and severally indemnify and hold Escrow Agent harmless
      from and against all costs, claims and expenses, including reasonable attorneys’
      fees, incurred in connection with the faithful performance of Escrow Agent’s
      duties hereunder. Escrow Agent acknowledges its consent to the provisions of
      this Agreement applicable to it by signing on the signature page of this
      Agreement.

     

    4.5   Due
      Diligence Review.
      For the
      purposes hereof, “Review Period”
      means a
      period of time that commences on the date of this Agreement and shall expire
      at
      midnight on July 8, 2005. Investor shall have the Review Period within which
      to
      inspect and examine the Owner Entities, Properties, Personal Property; Space
      Leases, Service Contracts and other customary legal, financial, environmental
      and engineering matters with respect to the Owner Entities and the Properties.
      However, Investor may not conduct any invasive environmental or engineering
      tests without the express prior, written consent of Contributor, not to be
      unreasonably withheld. Further, Investor will give Contributor advance notice
      (which may be oral) prior to making any site visits. Investor agrees to restore
      any damage caused or relating to any test or investigation it has performed,
      and
      Investor shall indemnify and hold harmless Contributor from any loss, cost,
      damage or expense caused thereby, which obligation shall survive the expiration
      or sooner termination of this Agreement. 

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    4.5.1   From
      and
      after the date hereof and until the Closing (or the termination of this
      Agreement by Investor pursuant to Article
      17),
      Investor and its designated representatives shall have access to the Properties
      for the purpose of making reasonable engineering, survey or other inspections
      and independent investigations. During the Review Period, Contributor shall
      provide Investor and its agents promptly and without charge with all material
      and necessary information within its or its affiliates’ possession or control
      with respect to the Properties, including full and accurate copies of Space
      Leases, Service Contracts, title information or instruments, surveys, all tax
      bills for the past year, and an inventory of all tangible Personal Property
      owned or leased (as lessee) by Contributor or Owner Entities and located on
      the
      Properties, and access to and, upon request, copies of all books and records
      of
      the Owner Entities and Contributor relating to the Owner Entities and the
      ownership, management, development and financing of the Properties. Contributor
      also shall provide access by Investor’s representatives, to all financial and
      other information relating to the Owner Entities and the Properties which would
      be sufficient to enable them to prepare audited financial statements in
      conformity with Regulation S-X of the Securities and Exchange Commission (the
      “Commission”)
      and to
      enable them to prepare a registration statement, report or disclosure statement
      for filing with the Commission. Contributor shall also provide to Investor’s
      representatives a signed representative letter and a hold harmless letter which
      would be sufficient to enable an independent public accountant to render an
      opinion on the financial statements related to the Owner Entities and the
      Properties.

    

    4.5.2   Investor
      shall undertake all inspections, investigations and examinations by Investor’s
      representatives, agents and/or consultants at the Company’s sole cost and
      expense. Investor shall endeavor not to unreasonably disturb or interfere with
      the rights of any hotel guest and any tenant under a Space Lease with respect
      to
      the Properties and shall otherwise comply with all notice and other requirements
      under applicable law and such Space Leases. The performance of any invasive
      tests shall be scheduled only upon receipt by Contributor of prior written
      notice and its consent thereto (such consent not to be unreasonably withheld
      or
      delayed). Investor shall, at its sole cost and expense, restore any portion
      of
      any Property that may be damaged or otherwise disturbed by reason of such tests
      and/or inspections to its condition existing immediately prior to conducting
      such test or inspection. 

    

    4.5.3   Investor
      shall defend, indemnify and hold Contributor and any affiliate or Subsidiary
      of
      Contributor, and all shareholders, employees, officers, partners, members and
      directors of Contributor or such affiliate or Subsidiary, as the case may be,
      harmless from any and all liability, cost and expense (including reasonable
      attorneys’ fees, court costs and costs of appeal) such party suffered or
      incurred for injury to person or property caused by or as a result of Investor’s
      inspection of the Properties. 

    

    4.5.4   In
      the
      event that during the Review Period, Investor, in its sole and exclusive
      judgment based in good faith on the results of on its due diligence review,
      determines to terminate this Agreement and not to enter into the LLC Agreement,
      then, on or prior to the last day of the Review Period, Investor shall have
      the
      right to cancel and terminate this Agreement without liability to Investor,
      by
      so sending notice to Contributor (with a copy to Escrow Agent) on or prior
      to
      such day (as of which date time shall be of the essence), in which case each
      party shall be entitled to a return of the portion of the Initial Deposit
      deposited by it and all interest earned thereon, less one half of any fees
      of
      the Escrow Agent. In the event Investor does not cancel and terminate this
      Agreement prior to the end of the period set forth in Section
      4.5,
      then
      this Agreement shall remain in full force and effect.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    4.5.5   If
      Investor cancels and terminates this Agreement pursuant to this Section, all
      non-public information obtained by Investor from Contributor during the Review
      Period shall be kept confidential, except to the extent disclosure is required
      pursuant to applicable law, regulation or court proceeding. Investor shall
      deliver to Contributor copies of all environmental and engineering reports
      it
      has obtained after Contributor has reimbursed Investor for Investor’s costs in
      obtaining such items.

    

    
      	
              5.

            	
              MANAGEMENT
                AND OPERATING COVENANTS PRIOR TO
                CLOSING.

            

    

     

    5.1   Pre-Closing
      Actions. During
      the period from the date of this Agreement until the Closing, except as
      consented to in writing by Investor, Contributor shall, and shall cause the
      Owner Entities to: (i) conduct its business and cause the Properties to be
      operated only in the ordinary course and in substantially the same manner as
      heretofore conducted and in compliance with all applicable insurance company
      requirements, all federal, state and local laws, ordinances and requirements;
      (ii) use commercially reasonable efforts to preserve intact its business
      organizations and goodwill; (iii) not offer any interest in the Owner Entities
      or the Properties for sale to any Person, consider unsolicited offers from
      any
      Person for the purchase of any interest in the Owner Entities or the Properties
      or enter into a contract for the sale of any interest in the Owner Entities
      or
      the Properties to any Person, whether or not such contract is contingent on
      the
      termination of this Agreement; (iv) not enter into discussions with any other
      Person regarding the sale of any interest in the Property LLCs or the Properties
      directly or indirectly; (v) timely comply with all of Contributor’s and the
      Owner Entities material obligations under all Franchise Agreements, Space
      Leases, Ground Leases, Service Contracts, Existing Debt Documents and other
      Permitted Exceptions and timely make all payments due and payable thereunder,
      (vi) maintain the Properties and the related Personal Property or cause the
      same
      to be maintained in the same condition as exists on the date hereof, reasonable
      wear and tear excepted, and shall keep the same or cause the same to be kept
      fully insured against fire and extended coverage consistent with prior practice
      insurance company requirements, all federal, state and local laws, ordinances
      and requirements; (vii) not modify, amend or terminate or permit the
      modification, amendment or termination of any Franchise Agreements, Space
      Leases, Ground Leases, Service Contracts, Existing Debt Documents and other
      Permitted Exceptions; or (viii) enter into any lease, contract or other
      agreement that would be binding upon any Property or any of the Owner Entities
      after Closing. Notwithstanding the foregoing, Investor agrees that with respect
      to items (vii) and (viii), no Investor consent shall be required for the
      amendment, termination or incurrence of any obligation that either (a) is
      terminable by the Company without penalty on 30 days or less notice, or (b)
      with
      respect to the relevant Property, aggregates an obligation of not more than
      $50,000 in any year with respect to that Property (without taking into account
      obligations that Investor has consented to hereunder). Investor covenants not
      to
      unreasonably withhold any consent with respect to items (vii) and (viii), and
      further agrees that its failure to respond to any request for consent within
      three days after receipt thereof shall be deemed a consent. Within three
      business days after the execution of such new Space Lease, Service Contract
      or
      any other item listed in clause (viii) after the date hereof, Contributor shall
      provide Investor with a copy of the same. Contributor shall promptly notify
      Investor of any material adverse change in the physical condition of the
      Properties. 

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    5.2   Property
      Condition.
      Except
      as otherwise stated to the contrary in this Agreement, the Company shall, at
      the
      Closing, accept the Properties in their “As Is, Where Is” condition as exists on
      the date hereof, subject also to the provisions of Section
      5.1.

     

    5.3   Franchise
      Agreements.
      Contributor shall use its commercially reasonable efforts to obtain a new
      franchise agreement (“New Franchise Agreement”) issued by each franchisor
      (“Franchisor”)
      under
      the existing Franchise Agreements in the name of the Lessee Company for each
      property substantially in the form of the existing Franchise Agreement for
      such
      Property, with any changes or modifications to such Existing Franchise Agreement
      approved in writing by Investor (which approval shall not be unreasonably
      withheld) to the extent required by any Franchisor, a Property Improvement
      Plan
      (“PIP”)
      shall
      have been obtained by and at the cost of the Company from each Franchisor.
      The
      estimated cost (exclusive of any licensing fees) of any improvements to any
      Property required by any PIP shall be paid by the application of the Credit
      Reserves, to the extent available, and otherwise shall be an expense of the
      Company. In the event that any franchise fees (“Franchise
      Fees”)
      currently payable with respect to each Property under the Franchise Agreements
      are increased in the New Franchise Agreements, the present value of any such
      increase (with respect to the term up to the franchise expiration date as in
      effect on the date hereof, only) shall be deducted as an adjustment to the
      Contribution Value. For the purpose of determining present value, projected
      payments shall be discounted at the same rate of interest as the secured Debt
      affecting the relevant Property as of the Closing Date.

    

    
      	
              6.

            	
              ADJUSTMENTS
                AND PRORATIONS.

            

    

     

    6.1   Adjusted
      Items.
      Contributor shall be entitled to all income produced from the operation of
      the
      Properties that is allocable to the period prior to 12:01 A.M. on the day the
      Closing occurs (the “Cutoff Time”)
      and
      shall be responsible for all expenses allocable to that period, and the Company
      shall be entitled to all income and responsible for all expenses from the
      operations of the Properties allocable to the period beginning at the Cutoff
      Time. At the Closing, all items of income and expense listed below with respect
      to the Properties shall be prorated in accordance with the foregoing principles
      and the rules for the specific items set forth hereafter:

    

    6.1.1   Contributor
      shall arrange for a billing under all those Service Contracts for which fees
      are
      based on usage and with utility companies for a billing for utilities not paid
      directly by tenants, to include all utilities or service used up to the day
      the
      Closing occurs, and shall pay or cause to be paid the resultant bills. If any
      of
      the Service Contracts set forth on Exhibit
      8.12
      cover
      periods beyond the Closing, the same shall be prorated on a per diem
      basis.

    

    6.1.2   Real
      estate taxes and personal property taxes on the Properties shall be prorated
      based upon the period (i.e.,
      calendar
      or other tax fiscal year) to which they are attributable, regardless of whether
      or not any such taxes are then due and payable or are a lien. Contributor shall
      pay or cause to be paid at or prior to the Closing (or the Company shall receive
      credit for) any unpaid taxes attributable to periods prior to the Closing Date
      (whether or not then due and payable or a lien as aforesaid). Contributor shall
      receive credit for any previously paid or prepaid taxes attributable to periods
      from and after the Closing Date. If as of the date the Closing occurs, the
      actual tax bills for the tax year or years in question are not available and
      the
      amount of taxes to be prorated as aforesaid cannot be ascertained, then rates,
      millages and assessed valuation of the previous year, with known changes, shall
      be used; and after the Closing occurs and when the actual amount of taxes for
      the year or years in question shall be determinable, the parties shall
      re-prorate such taxes to reflect the actual amount of such taxes.
      Notwithstanding the foregoing provisions, Section
      8.10
      shall
      govern with respect to all general, special and/or betterment assessments with
      respect to the Properties.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    6.1.3   Rentals
      and other payments that are payable pursuant to Space Leases shall be prorated
      on a per diem basis as and when collected. The Company shall not be obligated
      to
      make any payment or give any credit to Contributor on account of or by reason
      of
      any rental or other payments that are unpaid as of the Closing Date, but shall
      be required merely to turn over Contributor’s share of the same within fourteen
      days if, as and when received by the Company after the Closing. Investor and
      the
      Company shall not be required to institute any action or proceeding to collect
      any rent delinquencies.

    

    6.1.4   All
      amounts, including room charges, accrued to the accounts of guests occupying
      rooms in the Properties (collectively, “Guest
      Ledger Receivables”)
      as of
      the Cutoff Time shall be prorated. Contributor shall receive a credit for all
      Guest Ledger Receivables for all room nights up to and including the room night
      during which the Cutoff Time occurs, and the Company shall be entitled to the
      amounts of Guest Ledger Receivables for the room nights after the Cutoff Time.
      Contributor and the Company shall each receive a credit equal to one half of
      the
      amount of Guest Ledger Receivables for the full room night during which the
      Cutoff Time occurs. All restaurant and bar facilities will be closed as of
      the
      Cutoff Time and Contributor shall receive the income from the same until the
      Cutoff Time.

    

    6.1.5   The
      Company shall receive a credit for advance payments, if any, and prepaid room
      reservation deposits received by Contributor, to the extent the foregoing
      related to a period after the Cutoff Time.

    

    6.1.6   Cashier's
      cash funds and the petty cash funds used by Contributor in operating the
      Properties shall be adjusted at a price equal to the face amount thereof as
      of
      the Closing Date.

    

    6.1.7   If
      applicable, franchise payments prepaid pursuant to the Franchise Agreements
      and
      applied by the Franchisor to periods subsequent to the Closing Date shall be
      prorated. All amounts known to be due under the Franchise Agreements with
      reference to periods prior to the Closing Date shall be paid by Contributor
      or
      credited to the Company. Any additional amounts not known at the Closing will
      be
      subject to post closing adjustment.

    

    6.1.8   Gas,
      water, electricity, heat, fuel, sewer and other utilities charges to which
      Section
      6.1.1
      cannot
      be applied, and the governmental licenses, permit fees and inspection fees
      and
      operating expenses relating to the Properties shall be prorated on a per diem
      basis;

    

    6.1.9   All
      management fees or other compensation due or accrued prior or subsequent to
      the
      date of the Closing to any manager, broker, agent, or other person in connection
      with the Properties for services rendered to the Owning Entities or any
      predecessor of Owning Entities in connection with the management and/or leasing
      of the Properties shall be credited to the Company to the extent not paid by
      Contributor prior to the Closing (it being agreed that payment of all of the
      foregoing shall be the sole responsibility of Contributor).

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    6.1.10  
        Any
      prepaid rentals, other prepaid payments, security deposits, electric, gas,
      sewer
      and water deposits deposited with the Owning Entities or Contributor by tenants
      (including all accrued interest on all of the foregoing, unless Contributor
      is
      entitled to retain the benefit thereof) under any Space Leases, license
      agreements or concession agreements relating to the Properties, shall all belong
      to the Company and all shall be assigned and delivered to the Company at the
      Closing with respect to the Properties. At Investor’s option, the Company may
      take a cash credit in the amount of all Security Deposits to be delivered to
      the
      Company at the Closing, and Contributor may retain same.

    

    6.1.11  
        All
      salaries and benefits of employees whose employment is assumed by the Company
      or
      its Lessee pursuant to Section
      8.15
      hereof
      shall be prorated.

    

    6.1.12  
        The
      parties shall make the following additional prorations/adjustments with respect
      to the Existing Debt:

    

    A.    Contributor
      shall be responsible for all interest payments attributable to the period up
      to
      and including the day before the Closing, and the Company shall be responsible
      for all interest payments attributable to periods on and after the Closing
      Date.

    

    B.    Tax
      and
      insurance escrows and other deposits held by a lender as of the Closing Date
      with respect to Existing Debt (in the aggregate, the “Mortgage
      Escrows”)
      with
      respect to the Properties shall remain the property of the Owner Entities at
      the
      Closing, and Contributor shall receive a credit at the Closing for the amount
      thereof (ratably reduced to reflect the interest of Minority Interest holders,
      with respect to any Part Owned Property).

    

    6.1.13  
        Premiums
      with respect to any insurance policies of the Owning Entities not terminated
      as
      of the Closing Date shall be prorated as of the Closing Date.

    

    6.1.14  
        Any
      Ground Lease obligations shall be prorated between the Company and Contributor
      as of the Closing Date on an accrual basis, based on the actual number of days
      in the applicable period during which the Closing occurs. The Company shall
      be
      credited with and Contributor shall be charged with an amount equal to all
      accrued Ground Lease obligations. The Company shall be fully responsible for
      and
      shall pay all Ground Lease obligations accruing after the Closing Date. Any
      additional rent or other pass-throughs under the Ground Lease shall be pro-rated
      in a manner reasonably estimated by Contributor on the basis of prior periods,
      but shall be subject to post-closing adjustment to reflect final billed
      amounts.

    

    6.1.15  
        The
      Company shall receive a credit for the following capital improvement reserves
      (the “Credit
      Reserves”),
      less
      any amount of Credit Reserves actually expended between the date hereof and
      the
      Closing Date in the ordinary course of business:

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    Residence
      Inn Danbury - $636,000

    Mystic
      Marriott - $2,020,000

    Residence
      Inn Southington - $354,000 (ratably reduced to reflect the Minority Interests)
      

    Courtyard
      Warwick - $250,000.

     

    6.2   Proration
      of Inventory.
      Usable
      and in current use inventories of the following items shall also be
      prorated:

    

    6.2.1   uncooked
      and unopened food, including food in room “mini bars” and sides and shells of
      frozen meat in storage freezers; and

    

    6.2.2   beverages,
      wine, beer, and liquor in unopened bottles, including beverages in room “mini
      bars”.

    

    Contributor
      shall remove all vending machine moneys as of the Cutoff time and retain
      same.

     

    6.3   Basis
      of Adjustments.

     

    6.3.1   Uniform
      System.
      Except
      as otherwise expressly provided herein, all apportionments and adjustments
      shall
      be made in accordance with the Uniform System of Accounts for the Lodging
      Industry, 9th
      revised
      edition,
      as
      amended, as adopted by the American Hotel and Lodging Association.

    

    6.3.2   Generally.
      Each of
      the foregoing prorations and adjustments shall be adjusted to reflect that
      the
      transaction does not include the Minority Interests, with respect to the Part
      Owned Property Owners, by multiplying the respective adjustment or proration
      by
      the percent of equity in the Part Owned Property Owner that is not subject
      to
      the Minority Interests. The parties shall make all prorations and payments
      under
      the foregoing provisions based on a written statement or statements delivered
      to
      Investor by Contributor and approved by Investor. In the event any prorations,
      apportionments or computations shall prove to be incorrect for any reason,
      then
      either party shall be entitled to an adjustment to correct the same, provided
      that it makes written demand on the party obligated to make such payment for
      such adjustment within one year after the erroneous payment or computation
      was
      made.

     

    6.4   Accounts
      Receivable.
      All
      accounts receivable arising from the Properties shall be disposed of as
      follows:

    

    6.4.1   Contributor
      shall retain the receivables of the Properties as of the Cutoff Time, other
      than
      Guest Ledger Receivables. The Company shall promptly remit to Contributor in
      accordance with written instructions from Contributor any funds received by
      the
      Company in payment of such accounts receivable arising prior to the Cutoff
      Time.
      With regard to any collection made from a person or entity who has accounts
      receivable arising both prior and subsequent to the Cutoff Time, such collection
      shall be applied as designated by the account debtor (and if designated as
      payment of an accounts receivable arising prior to the Cutoff Time, the Company
      shall promptly remit such funds to Contributor in accordance with the preceding
      sentence), but if there is no designation, then any such collection received
      shall be applied first to accounts receivable of such debtor arising after
      the
      Cutoff Time and then to accounts receivable of such debtor arising prior to
      the
      Cutoff Time.

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    6.4.2   The
      Company and Contributor shall treat all rental payments received from a tenant
      at the Properties (other than room guests) as first applicable to rent that
      was
      owed by that tenant, if any, for the month in which the Closing occurs until
      the
      rental amount due to Contributor for such period has been collected. If there
      remains any unpaid rent for a period prior to the month of the Closing, all
      payments of rent received from such tenant shall be applied first to sums owed
      to Company with respect to the month after the Closing, then to any amounts
      owed
      to Contributor from such tenant, and finally, any excess shall be treated as
      belonging to the Company.

    

    6.4.3   Neither
      Contributor nor the Company may enter into any transactions that purport to
      compromise claims belonging to the other, without the other party’s prior
      written consent.

    

    6.4.4   If
      at the
      time of the Closing any tenants or guests with respect to the Properties owe
      Contributor any money, Contributor shall have the right, subsequent to the
      Closing, to collect such sums directly from such tenants, but shall not have
      the
      right to bring lawsuits against such tenants for such collection without the
      Company’s prior written consent. The Company shall have no obligation to join in
      any lawsuit and/or cooperate with Contributor (at Contributor’s expense) in its
      collection attempts.

     

    6.5   No
      Overcharge of Tenants.
      Contributor represents, warrants and covenants that no tenants have been
      overcharged for any item of rent or additional rent (including real estate
      taxes, or insurance reimbursements), for any periods prior to the Closing Date.
      If, within one year following the Closing, any tenant makes a claim against
      the
      Company or any Owner Entity for any such overcharge (including any withholding
      of rent by reason thereof), Contributor will and hereby agrees to defend,
      indemnify and hold the Company and such Owner Entity harmless from and against
      any loss, expense, or damage (including withheld rents or reasonable attorney’s
      fees) arising from or relating to any such alleged overcharge or rent
      withholding in connection therewith). The provisions of this Section shall
      survive the Closing for a period of one year (and for such additional period
      as
      may be necessary to resolve any such claim made within a one-year period).
      

     

    6.6   Closing
      Statement; Post-Closing Adjustment.
      

    

    6.6.1   Contributor
      shall cause its accounting staff to make such inventories, examinations and
      audits of the Properties, and of the books and records of the Properties, as
      Contributor’s Accountants may deem necessary to make the adjustments and
      prorations required under this Article, or under any other provisions of this
      Agreement. Investor or its designated representatives may be present at such
      inventories, examinations and audits of the Properties. Based upon such audits
      and inventories, Contributor’s accountants will prepare and deliver to the
      parties no later than two days prior to the Closing a closing statement (the
      “Closing
      Statement”).
      The
      Closing Statement shall contain Contributor’s best estimate of the amounts of
      the items requiring the prorations and adjustments in this Agreement. The
      amounts set forth on the Closing Statement shall be the basis upon which the
      prorations and adjustments provided for herein shall be made at the
      Closing.

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

    6.6.2   The
      Closing Statement shall be binding and conclusive on all parties hereto to
      the
      extent of the items covered by the Closing Statement, unless within 30 days
      after receipt by Investor of the Closing Statement, either Investor or
      Contributor notifies the other that it disputes such Closing Statement, and
      specifies in reasonable detail the items and reasons that it so disputes. The
      parties shall attempt to resolve such dispute. If such dispute is not resolved
      within 45 days after delivery of the original notice by Company or Contributor,
      then the parties shall submit such dispute to the affiliate office of Pannel
      Kerr Forster nearest to Waterford, Connecticut (the “Outside
      Accountants”),
      and
      the determination of the Outside Accountants, which shall be made within a
      period of 15 days after such submittal by the parties, shall be conclusive.
      The
      fees and expenses of the Outside Accountants shall be paid equally by Investor
      and Contributor.

    

    6.6.3   Within
      90
      days following the Closing Date, Contributor’s accountants shall deliver a final
      report to Company setting forth the final determination of all items to be
      included on the Closing Statement. In the event that, at any time within said
      90-day period, either party discovers any items which should have been included
      in the Closing Statement but were omitted therefrom, such items shall be
      adjusted in the same manner as if their existence had been known at the time
      of
      the preparation of the Closing Statement. The foregoing limitation shall not
      apply to any item that, by its nature, cannot be finally determined within
      the
      period specified. However, no further adjustments shall be made beyond 12 months
      after the Closing Date.

    

    
      	7.	
              TITLE
                AND SURVEY.

            

    

    

    At
      the
      Closing, each Owner Entity shall own valid, marketable and insurable fee title
      to its respective Property other than the Ground Lease Properties, and valid
      and
      enforceable leasehold interests in its respective Ground Lease Property under
      its respective Property Ground Lease, subject only to the Permitted
      Exceptions.

     

    7.1   Title
      Commitment and Survey.
      Promptly
      following the execution of this Agreement, Investor shall obtain, and deliver
      a
      copy to Contributor of, a binding, irrevocable commitment for an ALTA Form
      B Fee
      Title Policy to be issued to each Owner Entity (in each case, a “Title
      Commitment”)
      from
      the Title Company in the amounts set forth on Exhibit 1.8 to each
      Property, evidencing that each Owner Entity owns valid and marketable fee title
      to its respective Property other than the Ground Lease Properties, and that
      the
      applicable Owner Entities own a valid and enforceable leasehold interest under
      the Ground Lease to the Ground Lease Properties, free and clear of all
      encumbrances except the Permitted Exceptions. Investor may, at its option,
      order
      and obtain an “as-built”, current ALTA/ACSM Land Title Survey made in accordance
      with the Minimum Standard Detail Requirements for Land Title Surveys jointly
      established and adopted by the American Land Title Association and the American
      Congress on Surveying and Mapping in 1999 and meeting the accuracy requirements
      as defined therein, certified to the appropriate Owner Entity, Investor, the
      Company and the Title Company, which shows all easements of record, all parking
      spaces (including a count thereof) and curb cuts, all setback restrictions
      of
      record, and flood zone designations (the “Survey”).

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    7.2   Investor’s
      Review.
      Within
      ten business days after Investor’s receipt of all Title Commitments and Surveys,
      Investor shall furnish Contributor with a schedule of (i) any liens,
      encumbrances or other title exceptions or state of facts shown on the Title
      Commitment or Survey that Investor, in its reasonable judgment, does not approve
      or finds unsatisfactory, and (ii) any Title Company requirements that Investor,
      in its sole and exclusive judgment, contends Contributor must satisfy. In
      addition, if Investor has requested endorsements providing coverage for (i)
      a
      perimeter metes and bounds description and contiguity between the parcels of
      the
      Properties (or any portion thereof) and between the Properties (or any portion
      thereof) and the applicable public streets, (ii) access from the Properties
      or
      any portion thereof to a public street, (iii) extended coverage over the Title
      Company’s general exceptions, (iv) zoning as provided in ALTA Zoning Endorsement
      3.1, (v) affirmative insurance that easements are not encroached upon by any
      structures on the Properties or that there are no violations of any restrictive
      covenants or agreements and that no future violation would cause any reversion
      of title, (vi) a survey endorsement, (vii) “non-imputation” endorsements or
      (viii) or any other reasonable endorsements, and the Title Company has refused
      to grant such coverages, Investor shall so inform Contributor.

     

    7.3   Correction
      of Defects.
      Contributor shall have a period of ten business days following receipt of the
      foregoing schedule to remove, correct, cure or satisfy to Investor’s
      satisfaction, any survey or title exceptions (other than Permitted Exceptions)
      or Title Company requirements set forth on the schedule and to obtain from
      the
      Title Company the endorsements set forth on that schedule, unless such
      endorsements or cures are not available in the absence of a Survey and Investor
      has not obtained a Survey, Contributor shall not be required to remove any
      title
      objections, regardless of whether the underlying cause of the objection or
      defect is a Permitted Exception. If Contributor fails to remove any mortgage
      or
      other lien prior to or at the Closing, Investor may, but shall not be obligated
      to, close title subject to such mortgage or lien with an abatement of the
      Contribution Value in the amount required to remove same. For purposes of this
      Article, a deed of trust or similar instrument shall be deemed a mortgage.
      

     

    7.4   Failure
      to Correct.
      If
      Contributor is unable or elects not, subject to Section 7.3, within said
      ten business-day period, to remove, correct, cure or obtain endorsements or
      cause the same to be removed, corrected, caused or obtained as aforesaid (a
      “Title Correction”),
      then
      Investor may (i) based on a good-faith determination, terminate this Agreement,
      in which event the provisions of Section 17.1 shall control, or (ii)
      accept such state of facts and such title as is disclosed by the Survey and
      Title Commitment without a Title Correction, thereby waiving any rights against
      Contributor with respect thereto, provided that there shall nevertheless be
      an
      abatement for unremoved mortgages or other liens as above set forth. Investor
      shall make said initial election within ten business days following Investor’s
      receipt of written notification by Contributor that Contributor has not been
      able to or will not obtain a Title Correction.

     

    7.5   Effect
      of Corrected Defects.
      If
      Contributor shall undertake or cause to be undertaken a Title Correction as
      aforesaid, and shall be successful, then this Agreement shall continue in full
      force and effect with respect to the Properties and the Company shall close
      the
      Properties in accordance with the terms hereof. If Contributor shall only be
      partially successful in obtaining a Title Correction, Investor shall have the
      same alternative rights as Investor would have in the event Contributor had
      declined to seek a Title Correction (as set forth in the preceding Section).
      Investor shall make its election within ten days after Investor’s receipt of
      written notice from Contributor to Investor of the extent to which title has
      been corrected.

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    

    
      	
              8.

            	
              REPRESENTATIONS,
                WARRANTIES AND COVENANTS OF
                CONTRIBUTOR.

            

    

    

    Each
      Contributor, with respect to itself and the Properties (and each entity
      constituting Contributor, jointly and severally), covenants, represents and
      warrants to Investor (and to the Company, as its Permitted Designee) the
      following, all of which shall be required to be true and correct on and as
      of
      the date hereof and the Closing Date:

     

    8.1   Organization
      and Power.
      Each
      Contributor and each Owner Entity is a duly formed, validly existing entity,
      as
      specified on Exhibit 8.21, in good standing under the laws of the
      jurisdiction indicated on Exhibit 8.21 and has all requisite 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
      hereunder and under any document contemplated by this Agreement.

     

    8.2   Authority.
      This
      Agreement has been duly executed by each Contributor and is enforceable against
      Contributor in accordance with its terms. The documents delivered by either
      Contributor or any Owner Entity at the Closing will be duly executed by each
      Contributor and enforceable against each Contributor in accordance with their
      terms. Neither the execution and delivery of this Agreement nor the performance
      hereof will (i) be in violation of the organizational documents of either
      Contributor or any Owner Entity, or (ii) conflict with any law, decree,
      judgment, regulation or decree of any court or governmental agency.

     

    8.3   Consents.
      Except
      as provided in the next sentence, each Contributor and Owner Entity has or
      will,
      as the Closing have, obtained all consents required under any law or regulation,
      shareholder agreement, limited liability company agreement, trust agreement,
      covenant or other agreement concerning each Property or to which either
      Contributor or any Owner Entity is a party to permit the transactions
      contemplated hereunder (including, but not limited to, the contribution of
      the
      Membership Interests to the Company). Each Contributor will use its best efforts
      to obtain any consents required pursuant to the terms of the Ground Leases
      to
      permit the transactions contemplated hereunder. Except as set forth in
Exhibit 8.3, the contribution of the Membership Interests to the Company
      and the other transactions contemplated by this Agreement does not require
      the
      consent or approval of any public or private party that Contributor has not
      already obtained. 

     

    8.4   Violations.
      No
      Contributor or Owner Entity has received a written notice from any governmental
      authority, mortgagee, tenant, insurer or other party (i) that the Properties
      or
      any portion thereof or the use or operation thereof, the Owner Entities or
      any
      of them are currently in violation of any zoning, environmental or other land
      use regulations; (ii) that there is currently a violation of the requirements
      of
      any ordinance, law or regulation or order of any government or any agency,
      body
      or subdivision thereof (including the local building department) or the
      recommendations of any insurance carrier or Board of Fire Underwriters affecting
      the Properties or any portion thereof; or (iii) asserting that work must be
      performed at the Properties or any portion thereof and to each Contributor’s
      knowledge no such notice has been issued. If a notice is received or a violation
      is issued or filed prior to the Closing, Contributor shall promptly notify
      Investor and shall promptly cure such violation, and if such cure would require
      an alteration of or addition to the Properties or otherwise require an
      expenditure to cure the violation, the cost of which would exceed $150,000,
      then
      Contributor and Investor shall have the benefit of the provisions contained
      in
Section 17.1.

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    8.5   No
      Litigation.
      Except
      as set forth in Exhibit 8.5, no pending litigation or proceeding has been
      brought by or against any Contributor or any Owner Entity that relates to any
      Owner Entity or any of the Properties or affects any Owner Entity or any of
      the
      Properties or the operation thereof or that might prevent any of the
      transactions contemplated by this Agreement; or that might result in a
      consummation of judgment against Investor or the Company or any Owner Entity
      and, to Contributor’s knowledge, no such litigation or proceeding has been
      threatened. If Contributor is served with process or receives notice that
      litigation may be commenced against it with respect to the matters set forth
      above, Contributor shall promptly notify Investor.

     

    8.6   No
      Attachments or Bankruptcy Events.
      There
      are no attachments, levies, executions, assignments for the benefit of
      creditors, receiverships, conservatorships or voluntary or involuntary
      proceedings in bankruptcy or any other debtor relief actions contemplated by
      either Contributor
      or any
      Owner Entity
      or filed
      by either Contributor or any Owner Entity, or to the best of each Contributor’s
      knowledge, threatened in writing against or pending in any current judicial
      or
      administrative proceeding against either Contributor or any Owner
      Entity.

     

    8.7   Environmental
      Matters.
      To the
      best of each Contributor’s knowledge and except as disclosed in any
      environmental report identified on Exhibit 8.7, a true, correct and
      complete copy of which previously has been delivered to Investor: (i) neither
      Contributor nor any Owner Entity have received notice to the effect that any
      Property is in violation of, or has been or is it currently under investigation
      for, a violation of any federal, state or local law, ordinance or regulation
      relating to industrial hygiene or to the environmental conditions in, at, on,
      under or about the Properties including, but not limited to, soil and ground
      water condition; (ii) neither Contributor nor any Owner Entity have used,
      generated, manufactured, stored or disposed in, at, on, under or about the
      Properties or transported to or from the Properties any hazardous material
      except in accordance with applicable governmental regulations; and (iii) neither
      Contributor nor any Owner Entity have received notice to the effect that there
      has been any discharge, migration or release of any hazardous material from,
      into, on, under or about the Properties that has not been abated to the extent
      required by law. 

     

    8.8   Space
      Leases.
      The
      Space Leases described on Exhibit 8.8 comprise all the Space Leases
      presently existing; each is in full force and effect; no Space Lease has been
      modified or supplemented except (if at all) as set forth on Exhibit 8.8
      and in accordance with the provisions of Section 5.1; no rent has been
      paid more than one month in advance by any tenant and, except as set forth
      on
Exhibit 8.8, no tenant is entitled to any “free rent” period, defense,
      credit, allowance or offset against rental; the information set forth on
Exhibit 8.8 is true, correct and complete. There is no default of either
      landlord or (to either Contributor’s knowledge) any tenant under any of the
      Space Leases, and no state of facts that with notice and/or the passage of
      time
      would ripen into a default, except as set forth on Exhibit 8.8. No
      persons or entities are entitled to possession of the Properties or any portion
      thereof other than those listed on Exhibit 8.8. All work has been fully
      completed and all tenant improvements specified in any Space Lease to be the
      responsibility of the landlord have been completed and all tenant construction
      allowances have been paid. No leasing commissions are due, nor will any become
      due in connection with any Space Lease or the renewal thereof that are not
      adjusted for pursuant to the terms hereof and no understanding or agreement
      exists in regard to payment of any leasing commissions or fees for future Space
      Leases. Contributor has previously delivered to Investor a true, correct and
      complete copy of each Space Lease.

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    8.9   Ground
      Leases.
      Contributor is the sole owner (subject to the Minority Interests) of the
      tenant’s interest under (1) the ground lease among Capital City Economic
      Development Authority, as landlord, the State of Connecticut, acting by and
      through the Secretary of the Office of Policy and Management, and Adriaen’s
      Hotel Landing, LLC, as tenant, dated as of September 16, 2003 in respect of
      the
      Property known as the Hartford, Marriott, Hartford, CT; and (2) three Air Space
      Leases, between the City of Hartford, as landlord, and Hartford Center Hotel
      Partnership, as tenant, dated March 13, 1973; between the City of Hartford,
      as
      landlord, and Aetna Life and Casualty Company, as tenant, dated March 13, 1973;
      and between the City of Hartford, as landlord, and Aetna Life and Casualty
      Company, as tenant, dated October 25, 1974, as amended, in respect of the
      Property known as the Hartford Hilton, Hartford, CT (items (1) and (2),
      collectively, the “Ground Lease”).
      The
      Ground Lease is the only ground lease affecting the Properties. The Ground
      Lease
      is in full force and effect and is valid, binding and enforceable in accordance
      with its terms. There is no material default of either tenant or (to each
      Contributor’s knowledge) any landlord under any of the Ground Lease, and no
      state of facts that with notice and/or the passage of time would ripen into
      a
      default. No party to any Ground Lease has given Contributor notice or made
      any
      claim with respect to any breach or default. None of the rights of Contributor
      under any of the Ground Lease will be subject to termination or modification
      as
      the result of the consummation of the Closing, and upon the consummation of
      the
      Closing, as contemplated hereby, the Company will have succeeded to all of
      the
      right, title and interest of the Owner Entities under the Ground Lease.
      Contributor has previously delivered to Investor with a true, correct and
      complete copy of the Ground Lease.

     

    8.10  
        Assessments.
      Contributor shall pay on or before the Closing Date all general, special and/or
      betterment assessments with respect to the Properties or any portion thereof
      that are due and payable prior to the Closing Date, at no cost or expense to
      Investor and the Company; and if on the Closing Date the Properties shall be
      affected by an assessment or assessments that is (or are) or may become payable
      in annual installments, of which the first installment is then a charge or
      lien,
      or has been paid, then for the purposes of this Agreement all the unpaid
      installments of any such assessment, including those that are to become due
      and
      payable after the Closing Date, shall be deemed to be due and payable and to
      be
      liens upon the Properties and shall be paid and discharged by Contributor at
      the
      Closing.

     

    8.11  
        Other
      Agreements.
      There
      are not now and will not be on the Closing Date any agreements or understandings
      binding upon any of the Owner Entities or relating to the Properties, except
      for
      Permitted Exceptions and agreements to be entered into pursuant to the terms
      of
      this Agreement. Contributor has previously delivered to Investor a true, correct
      and complete copy of each document or instrument constituting a Permitted
      Exception.

     

    8.12  
        Service
      Contracts.
      All
      Service Contracts are listed on Exhibit 8.12. All information with
      respect to Service Contracts on Exhibit 8.12 is true and complete. To
      Contributor’s knowledge, there is no material default, or event that with notice
      or passing of time or both would constitute a material default, by any party
      to
      any Service Contract. Contributor has previously delivered to Investor a true,
      correct and complete copy of each Service Contract.

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    8.13  
        Permits.
      All
      licenses, permits, approvals and authorizations required to operate the
      Properties or any portion thereof are in full force and effect and will be
      in
      full force and effect as of, and will be delivered to the Company on, the
      Closing Date. Pending applications, if any, will not be withdrawn or permitted
      to lapse without Investor’s consent, and Contributor shall promptly notify
      Investor of all pending applications. All such pending applications are
      identified in Exhibit 8.13.

     

    8.14  
        Taxes.
      Contributor has furnished to Investor true and complete copies of the most
      recent real property Tax bill(s) for the Properties. No tenant is entitled
      to
      any refund of any Tax or other payment by reason of Tax reduction proceedings
      affecting current or prior years. Each Owner Entity has filed all material
      Tax
      Returns that it was required to file prior to the date hereof. All such Tax
      Returns were correct and complete in all material respects. All Taxes owed
      by
      any of the Owner Entities (whether or not shown on any Tax Return) have been
      paid. None of the Owner Entities is a current beneficiary of any extension
      of
      time within which to file a Tax Return that has not yet been filed. No audit
      or
      other examination of any Tax Return of, or any administrative or judicial
      proceeding relating to the Taxes of, any Owner Entity is in progress, nor has
      any Owner Entity been notified of any request for such audit or other
      examination. None of the Owner Entities has waived any statute of limitations
      in
      respect of Taxes or agreed to any extension of time with respect to a Tax
      assessment or deficiency. There is no material dispute or claim concerning
      any
      Tax liability of any Owner Entity either (A) claimed or raised in writing or
      (B)
      as to which Contributor has knowledge. Each Owner Entity has always been
treated
      as a partnership
      or as an
      entity that is disregarded for federal income tax purposes
      and has
      not been treated
      as a publicly traded partnership taxable as a corporation under the rules of
      Section 7704 of the IRC.

     

    8.15  
        Employees.
      At the
      Closing, the Lessee Company or one of its Affiliates shall hire all persons
      then
      employed by the Contributor or any Owner Entity in connection with the
      management, operation or maintenance of the Properties (collectively, the
“Employees”). Immediately after the Closing, the Employees shall be employed on
      terms substantially similar in the aggregate as those in effect on the Closing.
      Contributor has previously delivered to the Investor a copy of all collective
      bargaining agreements related to the Properties or any part thereof
      (collectively, the “CBA”).
      With
      respect to the business or operations of the Properties (a) the Owner Entities
      and Contributor are in compliance with all applicable laws respecting employment
      and employment practices, terms and conditions of employment and wages and
      hours; (b) neither the Owner Entities nor Contributor has received written
      notice of any unfair labor practice complaint against Contributor pending before
      the National Labor Relations Board; (c) there is no labor strike, slowdown
      or
      stoppage actually pending or threatened against or affecting the Owner Entities
      or Contributor; (d) neither the Owner Entities nor Contributor has received
      notice that any representation petition respecting the employees of the Owner
      Entities or Contributor has been filed with the National Labor Relations Board;
      (e) no arbitration proceeding arising out of or under the CBA is pending against
      the Owner Entities or Contributor and (f) neither the Owner Entities nor
      Contributor has experienced any primary work stoppage in the past five years.
      True, correct and complete copies of all material employee benefit plans
      (“Plans”)
      maintained by the Contributor or any of the Owner Entities (collectively, the
      “Existing Employer”) for the Employees have been made available to the Investor.
      All Plans are in substantial compliance with the Employee Retirement Income
      Security Act of 1974, as amended (“ERISA”)
      and no
      Existing Employer has engaged in a transaction with respect to any benefit
      plan
      that, assuming the taxable period of such transaction expired as of the date
      hereof, could subject the Company or any of the Owner Entities to a tax or
      penalty imposed by either Section 4975 of the IRC of Section 502(i) of ERISA.
      No
      liability under Subtitle C or D of Title IV of ERISA has been or is expected
      to
      be incurred by Contributor, the Company or any of the Owner Entities with
      respect to any ongoing, frozen or terminated Plan which is a single employer
      defined benefit pension plan and neither Contributor nor any of the Owner
      Entities has incurred or expects to incur any withdrawal liability with respect
      to any multiemployer plan under Subtitle E of Title IV of ERISA No Plan has
      an
      accumulated funding deficiency, within the meaning of Section 412 of the IRC
      or
      Section 302 of ERISA. Contributor has not provided, nor is it required to
      provide security to any Plan pursuant to Section 401(a)(29) of the IRC.

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    8.16  
        Signatories.
      The
      persons or parties signing this Agreement and the documents contemplated hereby
      on behalf of Contributor and the Owner Entities have the power and authority
      to
      enter into this Agreement and the documents contemplated hereby, to bind
      Contributor and the Owner Entities to the provisions hereof and to comply with
      the obligations of Contributor and the Owner Entities hereunder and
      thereunder.

     

    8.17  
        No
      Conflicts with Agreements.
      Neither
      the execution and delivery of this Agreement nor the consummation of the
      transactions herein contemplated will, to the best of Contributor’s knowledge,
      conflict with, result in a breach of or constitute (with or without the giving
      of notice or the passing of time, or both) a default under, or otherwise
      adversely affect any Space Lease, Franchise Agreement, or other contract,
      agreement, instrument, license or undertaking to which Contributor or any of
      its
      affiliates or any Owner Entity is a party or by which any of them or any of
      their respective property or assets is or may be bound or that relates to the
      Properties in any respect, other than documents evidencing or securing the
      Existing Debt, provided such violation is waived effective as of the
      Closing.

     

    8.18  
        No
      Options.
      No
      tenant under a Space Lease, holder of a Minority Interest or other person has
      any option, right of first refusal or other right to purchase any Property
      any
      Membership Interest or any other interest in any Owner Entity or any part
      thereof or interest therein, other than, in the case of Minority Interest
      holders, rights of first refusal that will be waived with respect to the
      transaction on or before the Closing Date.

     

    8.19  
        Franchise
      Agreements.
      All
      Franchise Agreements are listed on Exhibit 8.19. All information with
      respect to Franchise Agreements on Exhibit 8.19 is true and complete.
      Each Franchise Agreement is in full force and effect and has not been modified
      or supplemented except as set forth in a recorded instrument. There is no
      default under any Franchise Agreement, and, to Contributors knowledge, no state
      of facts that with notice and/or the passage of time would ripen into a default.
      Contributor has previously delivered to Investor with a true, correct and
      complete copy of each Franchise Agreement.

     

    8.20  
        Existing
      Debt.
      All
      Existing Debt is accurately identified on Exhibit 1.10. With regard to
      the Existing Debt: (i) Contributor has heretofore delivered to Investor true,
      correct and complete copies of each Existing Debt Document, (ii) no event has
      occurred that, with the giving of notice, passing of time, or both, would
      constitute a default that remains uncured on the part of Contributor in the
      due
      performance or observance of any material term, covenant or condition contained
      in the Existing Debt Documents and (iii) the amounts set forth on Exhibit
      1.10, including the amounts shown as escrows, reserves and other deposits
      (other than tax and insurance escrows and reserves) held by lenders of the
      Existing Debt are true and correct as of the effective date stated thereon.
      None
      of the Owner Entities has incurred any Debt that remains outstanding other
      than
      Existing Debt.

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    8.21  
        Owner
      Entities.
      With
      regard to each Owner Entity: (i) Contributor has heretofore delivered to
      Investor true, correct and complete copies of the organizational documents
      of
      such Owner Entity, and (ii) no event has occurred that, with the giving of
      notice, passing of time, or both, would constitute a default that remains
      uncured on the part of Contributor in the due performance or observance of
      any
      term, covenant or condition contained in any Owner Entity organizational
      documents. With respect to each Owner Entity, the information set forth on
      Exhibit 8.21 is true and correct as of the date hereof.

     

    8.22  
        Insurance.
      All of
      the Insurance Policies are listed on Exhibit 8.22. Contributor as
      previously delivered to Investor true, correct and complete copies of all of
      the
      Insurance Policies. All of the Insurance Policies are valid and in full force
      and effect, all premiums for such policies were paid when due and all future
      premiums for such policies (and any replacements thereof) shall be paid by
      Contributor on or before the due date therefor. Contributor shall pay all
      premiums on, and shall not cancel or voluntarily allow to expire, any of the
      Insurance.

     

    8.23  
        Condemnation
      Proceedings; Roadways.
      Neither
      Contributor nor any Owner Entity has received notice of any condemnation or
      eminent domain proceeding pending or threatened against any Property or any
      part
      thereof. Contributor has no knowledge of any change or proposed change in the
      route, grade or width of, or otherwise affecting, any street or road adjacent
      to
      or serving any Property. 

     

    8.24  
        Financial
      Statements.
      The
      consolidated, audited 2002, 2003, and 2004 financial statements and
      internally-prepared Property-level trailing 2005 financial statements provided
      to Investor are true, complete and accurate in all material respects and, with
      respect to such information and the notes thereto, fairly present the assets,
      liabilities and financial condition of the Owner Entities as of the dates and
      for the periods indicated and, with respect to statements of income, fairly
      present the results of operations of Owner Entities for the periods referred
      to
      therein and, in the case of the audited 2004 statements, in accordance with
      GAAP.

     

    8.25  
        Capitalization.
      The
      names of the respective holders of all of the membership interests in the Owner
      Entities, as of the date hereof, are as set forth on Exhibit 8.21. Except
      for the interests of the Part Owned Property Owners, there are no other
      membership or other equity interests in any of the Owner Entities outstanding
      nor are there any outstanding options or other rights to convert any obligation
      into or otherwise acquire any membership interest or other equity interest
      in
      any Owner Entity and Contributor owns all of the membership interests in the
      Owner Entities free and clear of all liens, claims, encumbrances or interests
      of
      others. 

     

    8.26  
        Owner
      Entity Investments.
      Each
      Contributor owns its Membership Interests in the Owner Entities free and clear
      of all liens, claims, encumbrances or interests, of others. Each Owner Entity
      owns its respective Property free and clear of all liens, claims, encumbrances
      or interests of others, other than the Permitted Exceptions, title exceptions
      set forth in Schedule B to the title insurance policies of Contributor made
      available to Investor prior to the date hereof, any state of facts shown on
      surveys of Contributor made available to Investor prior to the date hereof,
      and
      any matter that would be readily apparent from a physical inspection of the
      Properties. The Owner Entities do not own directly or indirectly any interest
      or
      investment (whether equity or debt) in any corporation, partnership, joint
      venture, business, trust, limited liability company or other entity (other
      than
      investments in short-term investment securities).

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    8.27  
        Compliance
      with Legal Requirements.
      Each of
      the Owner Entities is in material compliance with all applicable requirements
      of
      any ordinance, law or regulation or order of any government or any agency,
      body
      or subdivision thereof (including the local building department), other than
      such requirements that, if breached, could not foreseeably have a material
      adverse effect on the relevant Owner Entity or Property.

     

    8.28  
        Liabilities.
      Except
      as set forth on Exhibit 8.28, none of the Owner Entities has any
      Liabilities other than Liabilities reflected on the consolidated, audited 2002,
      2003, and 2004 financial statements and internally-prepared Property-level
      trailing 2005 financial statements provided to Investor prior to the date
      hereof.

     

    8.29  
        Prior
      Activities of the Owner Entities.
      None of
      the Owner Entities has, directly or indirectly, engaged in any business or
      activity other than owning the Properties.

     

    8.30  
        Survival.
      The
      representations and warranties of Contributor contained in or made pursuant
      to
      this Article shall survive the Closing until the first anniversary of the
      Closing Date and, in the case of the representations and warranties made in
      Section 8.14, until 90 days after the expiration of the applicable
      statute of limitations.

    

    
      	
              9.

            	
              REPRESENTATIONS,
                WARRANTIES AND COVENANTS OF
                INVESTOR.

            

    

    

    Investor
      hereby warrants, represents and covenants to Contributor that each of the
      following statements is true and correct as of the date of this Agreement and
      the Closing Date:

     

    9.1   Authority.
      Investor
      has full power and authority to enter into and perform this Agreement in
      accordance with its terms and this Agreement has been duly executed by Investor
      and is enforceable against Investor in accordance with its terms, and the
      documents delivered to Contributor at the Closing will be duly executed by
      the
      Company and enforceable against the Company in accordance with their terms.
      Neither the execution and delivery of this Agreement nor the performance hereof
      will (i) be in violation of the organizational documents of Investor, (ii)
      to
      the best of Investor’s knowledge, conflict with any law, decree, judgment,
      regulation or decree of any court or governmental agency, or (iii) conflict
      with
      any agreement or instrument to which Investor may be bound.

     

    9.2   Signatories.
      The
      persons or parties signing this Agreement on behalf of Investor have the power
      and authority to enter into this Agreement and the documents contemplated
      hereby, to bind Investor to the provisions hereof and to comply with the
      obligations of Investor hereunder and thereunder.

     

    9.3   No
      Litigation.
      No
      litigation is in effect or, to the knowledge of Investor, threatened, affecting
      the transactions contemplated hereby. There is no action or proceeding pending
      or, to the knowledge of Investor, threatened against Investor, before a court
      or
      other governmental authority to restrain, prohibit or otherwise challenge the
      transactions contemplated hereby, or that might result in the consummation
      of a
      judgment against Contributor, the Company or any Owner Entity.

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    9.4   No
      Agency.
      Investor
      is acquiring the limited liability company interests in the Company for its
      own
      account, as principal, for investment, and not with a view toward resale or
      distribution thereof.

     

    9.5   Securities
      Matters.
      Investor
      makes the acknowledgments, representations, warranties and agreements set forth
      on Exhibit 9.5 annexed hereto. In addition, Investor is an “Accredited
      Investor” as that term is defined under Regulation D under the Securities Act of
      1933, as amended (the “1933 Act”).
      Investor understands that the Company has not been registered under the 1933
      Act
      or the securities laws of any state and, as a result thereof, is subject to
      substantial restrictions on transfer. Neither any Investor, nor any Person
      receiving limited liability company interests in the Company, will hold or
      take
      such interests with a view to a distribution of such interests in violation
      of
      the 1933 Act. 

     

    9.6   No
      Registration.
      Investor
      understands that (i) Contributor and the Company have no obligation or intention
      to register the limited liability company interest in the Company issued to
      Investor for resale under any federal or state securities laws, or to take
      any
      action (including the filing of reports or the publication of information
      required by Rule 144 under the 1933 Act) that would make available any exemption
      from the registration requirements of such laws, and (ii) therefore Investor
      may
      be precluded from selling or otherwise transferring or disposing (other than
      pursuant to the terms and provisions of the LLC Agreement) of any limited
      liability company interests in the Company or any portion thereof and may have
      to bear the economic risk of investment in such limited liability company
      interests for an indefinite period.

     

    9.7   Survival.
      The
      representations and warranties of Investor contained in or made pursuant to
      this
      Article shall survive the Closing until the first anniversary of the Closing
      Date.

    

    
      	
              10.

            	
              DAMAGE
                AND DESTRUCTION.

            

    

    

    Until
      the
      Closing, if any damage to or destruction of the Properties (or any portion
      thereof) occurs (notice of which Contributor shall give to Investor as soon
      as
      practicable following its occurrence), then Contributor shall promptly repair
      or
      replace such damage or destruction, except that if the cost of such repair
      or
      replacement exceeds ten percent (10%) of the Contribution Value allocated to
      the
      particular Property in accordance with Exhibit
      1.8,
      or the
      damage or destruction would take more than sixty days to repair or rebuild,
      then
      in either of such cases Contributor shall not be required to commence such
      repair or replacement, but (i) Investor may terminate this Agreement with
      respect to the relevant Property in accordance with Section
      17.1
      by
      giving Contributor written notice of its intention to do so, such notice by
      Investor to Contributor to be given not later than five business days after
      Investor shall have received the notice from Contributor as aforesaid; or (ii)
      if Investor elects not to terminate this Agreement, this Agreement shall
      continue in full force and effect with respect thereto except that at the
      Closing, Contributor shall pay or assign to the Company its rights to collect
      casualty insurance proceeds for such loss, except that Contributor shall retain
      insurance proceeds sufficient to pay costs incurred for repair or replacement
      approved by Investor and completed by Contributor, plus rent loss proceeds
      for
      periods prior to the Closing, and Contributor additionally shall pay to the
      Company at the Closing the amount of the insurance deductible in effect at
      the
      time of the casualty. 

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    

    
      	
              11.

            	
              EMINENT
                DOMAIN.

            

    

    

    If
      any
      eminent domain proceedings affecting the Properties or any material portion
      thereof shall be threatened, contemplated, commenced or consummated prior to
      the
      Closing (notice of which Contributor shall give to Investor as soon as
      practicable after receipt by Contributor), Investor shall have the right by
      written notice given within fifteen days after Contributor has given Investor
      the aforesaid notice, (i) to terminate this Agreement by giving Contributor
      notice thereof (in which event the provisions of Section
      17.1
      shall
      control); or (ii) if Investor elects not to terminate this Agreement with
      respect to the Property so affected, this Agreement shall continue in full
      force
      and effect with respect thereto without any reduction or abatement of the
      Contribution Value. If this Agreement is not terminated, as aforesaid, then
      Contributor at Closing shall assign to the Company its entire right, title
      and
      interest in and to any condemnation award.

    

    
      	
              12.

            	
              EXISTING
                DEBT.

            

    

     

    12.1  
        Repayment
      of Existing Debt.
      Except
      as expressly provided in Section 12.2, Contributor shall repay all Existing
      Debt
      on the Closing Date. The Company shall reimburse Contributor and shall bear,
      as
      a Company expense, all fees and prepayment penalties in connection with such
      prepayment. 

     

    12.2  
        Refinancings.
      Contributor agrees to seek the consent of the Existing Lenders with respect
      to
      the Marriott Mystic Property to increase the amount of Existing Debt encumbering
      the Marriott Mystic, to the following target levels on or prior to the Closing
      Date:

    

    
      	
              Property

            	 	
              Target
                resized amount

            	 
	 	 	 	 
	
              Marriott
                Mystic, Mystic, CT:

            	 	
              $

            	
              34,800,000

            	 

    

    

    Investor
      agrees to seek to refinance each of the following Properties to the following
      target levels on the Closing Date:

    

    
      	
              Property

            	 	
              Target
                new financing amount

            	 
	 	 	 	 
	
              Courtyard
                by Marriott and Rosemont Suites, Norwich CT:

            	 	
              $

            	
              9,400,000

            	 
	
              SpringHill
                Suites by Marriott, Waterford, CT:

            	 	
              $

            	
              6,100,000

            	 
	
              Residence
                Inn by Marriott, Danbury, CT:

            	 	
              $

            	
              8,364,000

            	 
	
              Residence
                Inn Southington, CT:

            	 	
              $

            	
              11,400,000

            	 
	
              Hartford
                Hilton, Hartford, CT:

            	 	
              $

            	
              22,000,000

            	 
	
              Courtyard
                Hotel, Warwick, RI:

            	 	
              $

            	
              7,200,000

            	 
	
              Hartford
                Marriott, Hartford, CT:

            	 	
              $

            	
              45,000,000

            	 
	
               

            	
               $109,464,000
                in the
                aggregate. 

            	 

    

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    

    The
      parties agree to cooperate in considering minor changes to the foregoing
      amounts. Any refinancing proceeds in excess of the repayment of Existing Debt
      and all other amounts payable in respect thereof shall be distributed to
      Contributor (or, in the case of any Part Owned Property), to Contributor and
      the
      Minority Interest holder. The Company shall bear any costs of resizing or
      refinancing Existing Debt (including legal fees and origination charges), which
      shall be considered expenses of the Company and shall be reimbursed by the
      Company at the Closing. All documents, executed in connection with any such
      resizing or refinancing shall be subject to the consent of Contributor and
      Investor, which shall not be unreasonably withheld in either case.

     

    12.3  
        Costs.
      The
      Company shall pay to each Existing Lender in respect of Existing Debt
      outstanding as of the Closing, at or prior to the Closing, the costs of any
      and
      all transfer, assumption, legal, title, and other fees, costs and expenses
      of
      each Existing Lender in connection with delivery of such Existing Lender’s
      consent to assignment of the Membership Interests to the Company. All the
      foregoing payments, costs and expenses shall be expenses of the Company for
      all
      purposes hereof and of the LLC Agreement. The Company shall bear such expenses
      regardless of whether any Existing Lender shall refuse its consent or the
      provisions of this Article shall otherwise be unsatisfied. Any application
      or
      commitment fees incurred prior to the Closing Date shall be paid (subject to
      the
      reimbursement outlined above) first, by Investor, up to the amount of $175,000,
      which Investor represents has been expended as of the date hereof, and then
      by
      Contributor up to the amount of $175,000, then by Contributor and Investor,
      in
      the ratio of 33.3% by Contributor and 66.7% by Investor with respect to
      Stabilized Assets, and 50% by Contributor and 50% by Investor, with respect
      to
      Development Assets. In the event that the Closing does not occur, Contributor
      shall reimburse Investor for all application and commitment fees paid to lenders
      in accordance with this Section.

    

    
      	13.	
              PART
                OWNED PROPERTY.

            

    

    

    The
      parties acknowledge that, on the date hereof, Contributor does not hold the
      100%
      equity interests with respect to the owners of the Part Owned Properties, as
      set
      forth on Exhibit 8.21. The equity interests in the Part Owned Property Owners
      that is not held by Contributor are collectively referred to as the
“Minority
      Interests”.
      Contributor’s and Investor’s obligations at the Closing with respect to the
      Property are not conditioned upon the acquisition by the Company of the Minority
      Interests with respect to the Part Owned Property. However, Contributor shall,
      upon prior notice to Investor, bid on or negotiate to acquire the Minority
      Interests, on or prior to the Closing, at a price and upon other terms
      pre-approved by Investor in its sole discretion. In the event that Contributor
      agrees to so purchase the Minority Interests, then Contributor shall either
      (i)
      assign the respective Minority Interests acquisition agreements to the Company
      at the Closing, or (ii) close on the acquisition of the Minority Interests
      and
      terminate the Minority Interests. In either such event, the Company shall,
      at
      the Closing, reimburse Contributor and bear as a Company expense all reasonable
      third party costs and expenses incurred in acquiring and terminating the
      Minority Interests. “Minority
      Interest Acquisition Expenses”
      shall
      mean the total cost incurred in the acquisition of the Minority Interests
      through the operation of this Article. 

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    
      	
              14.

            	
              CONDITIONS
                TO CLOSING.

            

    

     

    14.1  
        Conditions
      to Investor’s Obligations.
      Investor’s obligations at the Closing with respect to the Properties are
      expressly conditioned upon the following conditions being satisfied or complied
      with (unless waived in writing by Investor).

    

    14.1.1  
        Contributor’s
      warranties and representations set forth herein shall be true and correct in
      all
      material respects as of the relevant Closing Date and Contributor shall have
      performed each and all of its covenants and agreements hereunder within the
      time
      provided.

    

    14.1.2  
        New
      Franchise Agreements or commitments for New Franchise Agreements reasonably
      acceptable to Investor shall have been issued to the Lessee.

    

    14.1.3  
        There
      shall have been no breach on the part of Contributor of any of the covenants
      set
      forth in Article
      5.

    

    14.1.4  
        Subject
      only to payment of its premium for same, the Title Company shall be prepared
      to
      issue at the Closing (or prepared to unconditionally commit to issue at the
      Closing, with no “gap”), its title policy, in the form (including all
      endorsements) contemplated in Article
      7.

    

    14.1.5  
        Contributor
      shall have obtained all necessary consents and approvals of governmental
      authorities or third parties to the consummation of the transactions
      contemplated by this Agreement.

    

    14.1.6  
        Contributor
      and Investor shall have effectuated the resizings and refinancings contemplated
      under Article
      12
      with
      respect to the Existing Debt.

    

    14.1.7  
        No
      order,
      statute, rule, regulation, executive order, injunction, stay, decree or
      restraining order shall have been enacted, entered, promulgated or enforced
      by
      any court of competent jurisdiction or governmental or regulatory authority
      or
      instrumentality that prohibits the consummation of the transactions contemplated
      by this Agreement, and no litigation or governmental proceeding seeking such
      an
      order shall be pending or threatened.

     

    14.2  
        Conditions
      to Contributor’s Obligations.
      Contributor’s obligations at the Closing are expressly conditioned upon the
      following conditions being satisfied or complied with (unless waived in writing
      by Contributor):

    

    14.2.1  
        Investor’s
      warranties and representations set forth herein shall be true and correct in
      all
      material respects as of Closing Date; and

    

    14.2.2  
        Contributor
      and Investor shall have effectuated the resizings and refinancings contemplated
      under Article
      12
      with
      respect to the Existing Debt.

    

    14.2.3  
        No
      order,
      statute, rule, regulation, executive order, injunction, stay, decree or
      restraining order shall have been enacted, entered, promulgated or enforced
      by
      any court of competent jurisdiction or governmental or regulatory authority
      or
      instrumentality that prohibits the consummation of the transactions contemplated
      by this Agreement, and no litigation or governmental proceeding seeking such
      an
      order shall be pending or threatened.

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    

    14.2.4  
        Hartford
      Marriott Deferred Closing.
      The
      parties agree that in the event that the conditions to Investor’s obligations at
      the closing contained in Section
      14.1
      hereof
      are not satisfied solely with respect to the Property known as the Hartford
      Marriott (in such circumstances, the “Deferred
      Property”),
      the
      Deferred Property is not open for business to the public or a valid permanent
      or
      temporary certificate of occupancy has not been issued for the Deferred
      Property, then provided that (x) the conditions to Closing are otherwise
      satisfied with respect to the remainder of the Properties, and (y) Contributor
      has received a forward loan commitment reasonably satisfactory to it and to
      Investor with respect to the permanent financing of the Deferred Property,
      then
      the transaction shall nonetheless proceed and the Closing shall occur with
      respect to all Properties other than the Deferred Property. In such event the
      Contribution Value on the initial Closing Date shall be adjusted (lowered)
      by
      the amount allocated to the Deferred Property on Exhibit
      1.8.
      The
      Closing with respect to the Deferred Property shall occur when (i) the
      conditions to Investor’s obligations with respect to such Deferred Property have
      been satisfied, (ii) the Deferred Property is open for business to the public,
      (iii) a valid permanent or temporary certificate of occupancy has been issued
      for the Deferred Property and (iv) the closing of financing contemplated by
      Section
      12.2
      for the
      Deferred Property. In the event that such conditions are not satisfied on or
      before November 1, 2005 (the “Deferred
      Property Outside Closing Date”),
      then
      such Deferred Property shall be deleted from the transaction and the parties
      shall have no further obligations with respect thereto, except as specifically
      provided in this Agreement. The adjusted Contribution Value with respect to
      the
      Deferred Property shall be calculated in the same manner as all other
      properties, as of the Closing Date with respect to the Deferred Property, and
      based on the Contribution Value allocated to the Deferred Property on
Exhibit
      1.8.
      

    

    
      	
              15.

            	
              THE
                CLOSING.

            

    

     

    15.1  
        Location
      and Date.
      The
      Closing shall occur on a date (the “Closing Date”)
      no
      later than fifteen days following the later to occur of the satisfaction of
      all
      conditions to Closing identified in Article 14 (but in no event later
      than July 15, 2005 (the “Outside Closing Date”)),
      at
      the offices of Contributor’s attorneys, Latham & Watkins LLP, 885 Third
      Avenue, New York, NY 10022-4802 at 10:00 A.M. At the Closing, the parties shall
      perform all obligations required to be performed at the Closing with respect
      to
      the Properties. 

     

    15.2  
        Contributions
      and Payments.
      At the
      Closing:

    

    15.2.1  
        Contributor
      shall contribute the Membership Interests to the Company;

    

    15.2.2  
        Investor
      shall deliver to the Company presently available funds in the amount of the
      Cash
      Payment;

    

    15.2.3  
        The
      Company shall deliver to Contributor presently available funds in the amount
      of
      the Cash Payment;

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    

    15.2.4  
        Contributor
      (or, in the event that either entity constituting Contributor, or any other
      Affiliate of Contributor, has succeeded to the ownership of the Membership
      Interests, then such single entity) and Investor shall execute the LLC Agreement
      evidencing issuance of the various membership interests in the Company;
      and

    

    15.2.5  
        Each
      party shall execute and deliver such instruments as the other party may
      reasonably desire in connection with or to consummate the transactions
      contemplated by this Agreement, or cause the same to be executed and delivered,
      including the LLC Agreement. 

     

    15.3    Contributor’s
      Closing Deliveries.
      At the
      Closing, Contributor shall execute and/or deliver or cause the same to be
      executed and delivered to Investor or the Company (or another Permitted
      Designee, which shall be deemed substituted for “the Company” in the following
      subsections) the following items:

    

    15.3.1  
        Transfer
      documents:

    

    A.    An
      omnibus assignment of all of the Membership Interests in the Owner Entities
      in
      the form attached as Exhibit
      15.3.1,
      which
      shall be joined in by the Company;

    

    B.    
If
      clause
      13(i)
      applies,
      then at the Closing, Contributor shall execute and/or deliver or cause to be
      executed and delivered to the Company an Assignment Agreement (substantially
      similar in the form to Exhibit
      15.3.1),
      to be
      joined in by the Company, by which Contributor assigns to the Company all of
      Contributor’s right, title and interest, in and to the acquisition of the
      Minority Interests.

    

    15.3.2  
        Estoppels,
      consents, notices and New Franchise Agreements:
      Contributor shall deliver:

    

    A.    With
      respect to the Ground Lease, original estoppel certificates, in forms and upon
      terms and conditions to be negotiated by Contributor and approved by Investor
      (which approval shall not be unreasonably withheld) (the “Ground
      Lease Estoppel Certificates”)
      duly
      executed by the ground lessor, which shall provide, among other matters, for
      the
      ground lessors’ certification that (i) true, correct and complete copies of the
      applicable Ground Lease, including all amendments thereto, are attached to
      the
      estoppel certificate, (ii) to the ground lessor’s knowledge, Contributor is not
      then in default under the applicable Ground Lease;

    

    B.    The
      New
      Franchise Agreements or commitments for New Franchise Agreements acceptable
      to
      Investor; and

    

    C.    The
      consents of the Minority Interest holders.

    

    15.3.3  
        Affidavits
      and Certificates:
      Contributor shall deliver: 

    

    A.    An
      affidavit in form reasonably satisfactory to Investor to the effect that
      Contributor is not a “foreign person” (as defined in IRC Section 1445(f)(3) and
      the regulations issued thereunder);

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    

    B.    
All
      real
      property transfer forms, and any other documents, instruments or forms required
      by municipal or other authorities in connection with the transfer of the
      Properties Membership Interests;

    

    C.    
Such
      affidavits; “mechanic’s lien”, “gap”, “parties in possession” or other
      Contributor indemnities; evidence of authority; releases of liens; or other
      instruments as the Title Company may reasonably request to issue a title policy
      satisfactory to the Company in accordance with Article
      7;
      and

    

    D.    The
      pro-forma title insurance policies contemplated by the final Title
      Commitments.

    

    15.3.4  
        At
      the
      Closing, Contributor shall terminate the existing management agreement with
      respect to the Properties.

    

    15.3.5  
        At
      the
      Closing, Contributor shall (i) deliver the consent required from the Existing
      Lenders, as contemplated by Article
      12,
      and
      (ii) execute and deliver such documents and instruments as each Existing Lender
      reasonably requests to evidence or effectuate the transfer to the Company and
      the Company’s assumption of the Existing Debt (provided, however, that
      Investor and the Company will not be obligated to assume any obligations or
      liabilities in connection therewith (other than obligations under the loan
      documents, as currently existing, that accrue following the Closing, and subject
      to the exculpation provisions thereof)) and (iii) deliver an assignment of
      the
      Mortgage escrows in form reasonably acceptable to Investor.

     

    15.4  
        Management
      Agreements.
      At the
      Closing, the Company shall enter into the Asset Management Agreement with Asset
      Manager and the Management Agreement with Manager.

     

    15.5  
        Lessee
      Formation and Leases.
      At the
      Closing,

    

    15.5.1  
        Investor
      Lessee Member and Contributor shall execute a Lessee LLC Agreement in the case
      of any Property that is not a Part Owned Property, and Lessee Company and the
      holder of the Minority Interests with respect to any Part Owned Property shall
      execute a limited liability company agreement under the laws of the State of
      Delaware (in each case, a “Part
      Owned Property Lessee Company”)
      on
      terms mutually acceptable to Contributor, Investor and the holder of the
      relevant Minority Interest; and

    

    15.5.2  
        Lessee
      Company or the Part Owned Property Lessee Company (on one side) and each of
      the
      Owner Entities (on the other side) shall execute a Lease Agreement demising
      the
      Property owned by such Owner Entity to the Lessee.

     

    15.6  
        Fees
      and Costs.
      At the
      Closing, 

    

    15.6.1  
        the
      Company shall pay, as Company expenses, (a) all costs of the owners title policy
      (i.e., the
      cost
      of the Title Commitment and cost of converting same to a title policy or
      endorsement to the existing title policy, including search and/or exam fees
      and
      premium costs) to be issued in the amount of the adjusted Contribution Value,
      (b) all transfer, assumption, legal, title and other fees to each Existing
      Lender as set forth in Article
      12,
      (c) all
      costs of any Survey for the Properties required by any lender, as well as any
      reasonable costs of its due diligence paid to third party consultants, but
      excluding any internal costs, any travel costs of the parties or their
      professional advisors, and (d) all reasonable third-party out of pocket costs
      of
      Investor and Contributor incurred in forming the Company, including preparing
      and negotiating this Agreement and the LLC Agreement, including, but not limited
      to, professional advisors, attorneys, and closing costs (including legal),
      but
      excluding any travel costs of the parties or their professional advisors,
      and

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    

    15.6.2  
        Contributor
      shall pay any transfer taxes in connection with the contribution of the
      Membership Interests, whether state, city or local. The Company shall pay any
      sales taxes in connection with the contribution of the Membership Interests,
      to
      the extent such obligation is ordinarily imposed upon the buyer as a matter
      of
      local custom.

     

    15.7  
        Further
      Assurances Regarding Documentation.
      During
      the term of this Agreement, Contributor and Investor hereby agree to cooperate
      in good faith to negotiate, and on or prior to the Outside Closing Date to
      execute and deliver the LLC Agreement, the Lessee LLC Agreements, the Leases,
      the Management Agreements, and the Asset Management Agreements, substantially
      in
      the forms attached hereto as Exhibits 1.3 - 1.7, subject to conforming changes
      and other revisions reasonably necessary or requested to effect the intent
      of
      the transactions contemplated hereby.

    

    
      	16.	
              ASSIGNMENT;
                DESIGNATION OF GRANTEES.

            

    

    

    Neither
      party hereto shall assign its rights or its interests in and to this Agreement,
      unless such assignment is necessary to comply with the terms of the Existing
      Debt and, upon such assignment such assignee shall, in writing, affirmatively
      assume Investor’s obligations hereunder. Neither party hereto shall be deemed to
      be discharged of any of its duties hereunder as a result of any assignment
      or of
      any delegation by such party of any such duties.

    

    
      	17.	
              TERMINATION
                OF THE AGREEMENT; DEFAULT REMEDIES;
                INDEMNITIES.

            

    

     

    17.1  
        Failure
      to Satisfy Conditions Precedent.
      If by
      the Outside Closing Date not all of the conditions precedent to Investor’s
      Closing obligations have been fulfilled, including the satisfaction of any
      representations or warranties intended to be fulfilled between the date hereof
      and the Closing, but Section 17.2 hereof is not applicable, then Investor
      shall have only the following rights and remedies: (i) to close the transactions
      contemplated by this Agreement without any abatement of the Contribution Value
      (except as specifically set forth in this Agreement to the contrary), or (ii)
      to
      treat this Agreement as terminated and of no further force or effect. If
      Investor elects to exercise its rights under clause (i), above, such defect,
      exception, condition, matter or thing shall thereafter be deemed waived by
      Investor with the same force and effect as if such defect, exception, condition,
      matter or thing had at all times been a Permitted Exception (provided the same
      has been disclosed to Investor in writing or Investor has other written notice
      thereof) and, in such event, Investor shall close the transactions contemplated
      by this Agreement in accordance with the provisions of this Agreement without
      any reduction or abatement in the Contribution Value (except as specifically
      set
      forth in this Agreement to the contrary). If, however, Investor shall elect
      to
      exercise its rights under clause (ii) above, then (A) all costs incurred by
      either Contributor or Investor that would have been payable by the Company
      pursuant to Section 15.6.1 (if a Closing had occurred) shall be paid
      42.04% by Contributor and 57.96% by Investor, unless any particular cost may
      reasonably be attributed to a specific Property, in which case Investor shall
      pay to the Company 50% of the costs, with respect to Development Assets, and
      66.7% of the costs, with respect to Stabilized Assets, and Contributor shall
      pay
      to the Company 50% of the costs, with respect to Development Assets, and 33.3%
      of the costs, with respect to Stabilized Assets other than fees paid in respect
      of refinancings, pursuant to Section 12.3, which shall be for the account
      of Contributor, (B) Investor shall receive a refund of the portion of the
      Initial Deposit deposited by it and all interest accrued thereon in accordance
      with Article 4 as its sole remedy hereunder and (C) Contributor shall
      receive a refund of the portion of the Initial Deposit deposited by it and
      all
      interest accrued thereon in accordance with Article 4 as its sole remedy
      hereunder. 

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    17.2  
        Investor’s
      Remedies.
      If
      Investor shall have performed all of its obligations under this Agreement and
      all conditions to Contributor’s obligation to proceed with the Closing shall
      have been satisfied or waived, and if Contributor shall fail or refuse to close
      as required by the terms of this Agreement, or shall intentionally or
      negligently fail to satisfy the conditions precedent to the Closing, which
      default shall continue unremedied for seven business days after notice thereof
      from Investor, or shall be in material breach of any representation or warranty
      made by Contributor hereunder then Investor shall be entitled to the following:
      a payment of the entire Initial Deposit and all interest accrued thereon to
      Investor in accordance with the provisions of Article 4, and, in
      addition, Contributor shall be liable to pay to Investor a “break up fee” in the
      amount of Two Hundred Fifty Thousand Dollars ($250,000), as liquidated damages.
      In such event, this Agreement shall terminate, be null and void and of no
      further force or effect. It is specifically understood that specific performance
      and injunctive relief shall not be available remedies.

     

    17.3  
        Contributor’s
      Remedies.
      If
      Contributor shall have performed all of its obligations under this Agreement
      and
      all conditions to Investor’s obligation to proceed with the Closing shall have
      been satisfied or waived, and if Investor shall fail or refuse to close as
      required by the terms of this Agreement, or if Investor shall otherwise be
      in
      material breach of any representation, warranty or covenant hereunder, the
      parties hereto agree that the damages that Contributor would sustain as a result
      thereof would be substantial, but would be difficult to ascertain. Accordingly,
      the parties hereto agree that in the event of such default, failure or refusal
      by Investor, Contributor’s sole remedy shall be payment to it of the entire
      Initial Deposit and all interest accrued thereon in accordance with the
      provisions of Article 4, and in addition, Investor shall be liable to pay
      to Contributor a “break up fee” in the amount of One Million Dollars
      ($1,000,000), as liquidated damages. It is specifically understood that specific
      performance and injunctive relief shall not be available remedies. 

     

    17.4  
        Nature
      of Liquidated Damages.
      Each
      party recognizes that, if it fails to perform its obligations hereunder, then
      the other party shall be entitled to compensation for the detriment caused
      thereby. However, the parties agree that it is extremely difficult and
      impractical to ascertain the extent of the detriment and, to avoid such
      difficulties, the parties agree that if either party fails to perform its
      obligations hereunder and this Agreement is terminated by reason thereof, the
      party not in default may retain the Initial Deposit (plus all interest and
      dividends earned thereon) and shall be entitled to the “break up” fees
      enumerated above as liquidated damages for default. All parties agree that
      such
      amount stated as liquidated damages shall be in lieu of any other relief to
      which the party not in default might otherwise be entitled to by virtue of
      this
      Agreement or by operation of law.

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    17.5  
        Legal
      Fees.
      If
      either party brings an action to recover the Initial Deposit, the non-prevailing
      party shall (notwithstanding the “exclusive remedies” language above set forth
      in Section 4.5) pay the prevailing party’s reasonable legal fees,
      disbursements and court costs expended to obtain a judgment.

     

    17.6  
        Agreements
      to Indemnify.

    

    17.6.1  
        In
      the
      event Closing occurs, the entities constituting Contributor, jointly and
      severally, hereby agree to indemnify and hold harmless Investor, its officers,
      directors, employees, members, representatives, agents, shareholders, partners
      and affiliates (and their respective officers, directors, employees, members,
      representatives, agents, shareholders, partners and affiliates) (the
“Investor Indemnified
      Parties”),
      from
      and against all Liability, damage, deficiency, loss, costs, claims, encumbrances
      or expense, including interest or reasonable attorneys’ fees and disbursements
      (collectively, “Damages”)
      incurred by any of them arising prior to the first anniversary of the Closing
      Date (or 90 days after the expiration of the applicable statute of limitations
      with respect to a breach of the representation and warranty made by Contributor
      in Section
      8.14)
      and
      that arise out of or as a result of (i) any breach of the representations and
      warranties made by Contributor in Article
      8
      hereof,
      (ii) any breach of any other representation or warranty made by Contributor
      herein or (iii) any breach or nonperformance of any covenant or agreement made
      by Contributor herein,
      unless,
      in the case of any of the foregoing items (i) through (iii), the indemnified
      party had written notice of such breach or nonperformance in advance of the
      Closing Date.

    

    17.6.2  
        In
      the
      event Closing occurs, Investor hereby agrees to indemnify and hold harmless
      Contributor, its respective officers, directors, employees, members,
      representatives, agents, shareholders, partners and affiliates (and their
      respective officers, directors, employees, members, representatives, agents,
      shareholders, partners and affiliates) (the “Contributor Indemnified
      Parties”)
      from
      and against all Damages incurred by any of them and which arise prior to the
      first anniversary of the Closing Date and that arise out of or as a result
      of
      (i) any breach of the representations and warranties of Investor in Article
      hereof, (ii)  any
      breach of any other representation or warranty made by Investor herein or (iii)
      any breach or nonperformance of any covenant or agreement made by Investor
      herein,
      unless,
      in the case of any of the foregoing items (i) through (iii), the indemnified
      party had written notice of such breach or nonperformance in advance of the
      Closing Date.

    

    17.6.3  
        If
      any
      Person benefited by Section
      17.6
      (an
“Indemnified
      Person”)
      is
      threatened with any claim, or any claim is presented to or made to an
      Indemnified Person, or any action is commenced against an Indemnified Person,
      that may give rise to a right to indemnification hereunder, such Indemnified
      Person shall, with reasonable promptness, give written notice of such claim
      to
      the Person obligated to provide indemnification with respect thereto pursuant
      to
Section
      17.6
      (the
“Indemnifying
      Person”)
      and,
      without prejudice to the Indemnified Person’s right of indemnification under
      this Section
      17.6
      shall,
      before taking any action with respect to the subject claim, make itself
      available to meet with the Indemnifying Person and, along with the Indemnifying
      Person, attempt to resolve and/or settle the subject claim.

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    

    17.6.4  
        The
      Indemnifying Person may elect before the earlier of the 30th
      day
      after receipt of such notice or the fifth day before the return date required
      by
      any claim, citation or other statute, to contest and defend against such claim
      at the Indemnifying Person’s expense, and shall give written notice to the
      Indemnified Person of the commencement of such contest or defense with
      reasonable promptness after the giving of the written notice of such claim
      by
      the Indemnified Person. The Indemnified Person shall be entitled to participate
      with the Indemnifying Person in such event, but shall not be entitled in any
      way
      to release, waive, settle, modify or pay such claim without the written consent
      of the Indemnifying Person if the Indemnifying Person shall have assumed the
      defense of, or otherwise be contesting, such claim (provided
      that
      such written consent shall not be unreasonably withheld). If the Indemnifying
      Person shall have assumed the defense of any claim, and has employed counsel
      with respect thereto, the Indemnified Person shall also be entitled to employ
      counsel at its own cost and expense.

    

    17.6.5  
        If
      the
      Indemnifying Person does not elect to contest or defend the claim as provided
      in
      this Section
      17.6,
      the
      Indemnified Person, shall have the exclusive right to prosecute, defend,
      compromise, settle or pay the claim in its sole discretion and pursue its rights
      under this Agreement. If the Indemnifying Person shall assume the defense,
      the
      parties hereto shall cooperate in the defense of such action and the records
      of
      each shall be available to the other and to the Indemnified Person with respect
      to such defense.

    

    
      	
              18.

            	
              BROKERS.

            

    

    

    Investor
      and Contributor each represents and warrants that it has dealt with no broker
      or
      finder in connection with this transaction, except that Contributor has dealt
      with Hodges Ward Elliott, whom Contributor will pay pursuant to a separate
      agreement. Investor and Contributor agree to defend, indemnify and hold the
      other harmless from and against any and all loss, liability and expense,
      including reasonable attorney’s fees, the indemnified party may incur arising by
      reason of the above representation being false. The provisions of this Article
      shall survive the Closing.

    

    

    
      	
              19.

            	
              PRESS
                RELEASES; CONFIDENTIALITY.

            

    

    

    Prior
      to
      the Closing, neither Investor nor Contributor shall issue any press releases
      regarding the LLC Agreement or this Agreement without the mutual prior consent
      of both parties, except that if the parties are unable to agree on a press
      release and legal counsel for one party determines that such press release
      is
      required by law, then such party may issue the legally required press release.
      The terms and conditions of this Agreement and the proposed transaction,
      including the identities of all parties referred to herein, will be held by
      the
      parties in strict confidence and will not be disclosed to anyone, other than
      directors, officers, partners, employees, agents or representatives including
      attorneys, accountants, partners, experts, consultants and other agents and
      representatives (collectively, “Representatives”)
      who
      need to know such information in connection with the transaction, or otherwise
      as advisable, except if legal counsel for one party determines that such
      disclosure is required by applicable law, then such party may make such legally
      required disclosure (which may be in the form of a filing with the Securities
      and Exchange Commission) without the prior consent of the other party, which
      consent shall not be unreasonably withheld or delayed. In addition, each of
      the
      parties hereto will be furnishing to each other certain information that is
      either non-public, confidential or proprietary in nature. Each of the parties
      agrees that all such information furnished or otherwise obtained, directly
      or
      indirectly, by such party, its Representatives, and all reports, analysis,
      compilations, data, studies or other documents prepared by such party or its
      Representatives containing or based, in whole or in part, on any such furnished
      information (collectively, the “Information”)
      will
      be kept strictly confidential and will not, without the prior written consent
      of
      the other party, be disclosed to any other individual or entity in any manner
      whatsoever, in whole or in part, and will not be used for any purpose other
      than
      evaluating the transaction described herein; provided that if either party
      is
      advised by its counsel that it is legally obligated to release the Information,
      such party may do so after notice to and consultation with the other party.
      

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

       

    

    
      	
              20.

            	
              MISCELLANEOUS.

            

    

     

    20.1  
        Amendment.
      The
      written approval of each party hereto shall be required to amend or waive any
      provision of this Agreement.

     

    20.2  
        Waivers.
      No
      waiver by any party of any default with respect to any provision, condition
      or
      requirement hereof shall be deemed to be a waiver of any other provision,
      condition or requirement hereof; nor shall any delay or omission of any party
      to
      exercise any right hereunder in any manner impair the exercise of any such
      right
      accruing to it hereafter.

     

    20.3  
        No
      Assignments; Binding Effect.
      This
      Agreement shall not be assigned or otherwise transferred (by operation of law
      or
      otherwise) by any party (except as may be expressly permitted in this
      Agreement). This Agreement shall be binding upon and inure to the benefit of
      the
      parties hereto and their heirs, executors, administrators, successors, legal
      representatives and assigns permitted in accordance with this Agreement and
      the
      Act.

     

    20.4  
        Notices.
      Any
      notice, approval, consent or other communication required or permitted to any
      party under this Agreement shall be in writing and shall be deemed to have
      been
      duly given or made: (i) if delivered personally by courier or otherwise, then
      as
      of the date delivered (the “Effective Date”)
      or if
      delivery is refused, then as of the date presented (also an “Effective
      Date”),
      or
      (ii) if sent or mailed by Federal Express, Express Mail or other overnight
      mail
      service to the Company and to each party, then as of the first Business Day
      after the date so mailed (also an “Effective Date”). Each communication
      shall be addressed as follows:

    

    
      	
              If
                to Investor:

            	
              Hersha
                Hospitality Limited Partnership

            
	 	
              510
                Walnut Street, 9th
                fl.

            
	 	
              Philadelphia,
                PA 19106

            
	 	
              Attn:
                Jay A. Shah

            
	 	 
	
              with
                a copy to:

            	
              Hunton
                & Williams LLP

            
	 	
              1900
                K Street, NW Suite 1200

            
	 	
              Washington,
                DC 20006

            
	 	
              Attn:
                John M. Ratino

            

    

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    

    
      	
              If
                to Contributor:

            	
              c/o
                Waterford Group, LLC

            
	 	
              914
                Hartford Turnpike

            
	 	
              P.O.
                Box 715

            
	 	
              Waterford,
                CT 06385

            
	 	
              Attn:
                Len Wolman

            
	 	 
	
              with
                a copy to:

            	
              Latham
                & Watkins LLP

            
	 	
              885
                Third Ave.

            
	 	
              New
                York, NY 10022

            
	 	
              Attn:
                Raymond Lin (024576-0017)

            

    

    

    The
      parties may change their addresses for subsequent notice, by a notice sent
      to
      each other party. The parties may also send courtesy notices by facsimile to
      Investor party at (215) 238-0157, or to Contributor at (860) 447-8554, although
      such facsimile notices shall not be considered to have been officially given
      hereunder.

     

    20.5  Certain
      Waivers.
      The
      parties waive any and all rights they may have to a jury trial, and any and
      all
      rights they may have to punitive, special, exemplary, or consequential damages,
      in respect of any dispute based on this Agreement.

     

    20.6  Preservation
      of Intent.
      If any
      provision of this Agreement is determined by any court having jurisdiction
      to be
      illegal or in conflict with any laws of any state or jurisdiction, then the
      parties agree that such provision shall be modified to the extent legally
      possible so that the intent of this Agreement may be legally carried out. If
      any
      one or more of the provisions contained herein, or the application thereof
      in
      any circumstances, is held invalid, illegal or unenforceable in any respect
      or
      for any reason, then the validity, legality and enforceability of any such
      provision in every other respect and of the remaining provisions hereof shall
      not be in any way impaired or affected, it being intended that all of the
      parties’ rights and privileges shall be enforceable to the fullest extent
      permitted by law.

     

    20.7  Entire
      Agreement.
      This
      Agreement sets forth the entire and only agreement or understanding between
      the
      parties relating to the subject matter hereof and supersedes and cancels all
      previous agreements negotiations, commitments and representations in respect
      thereof among them, and no party shall be bound by any conditions, definitions,
      warranties or representations with respect to the subject matter of this
      Agreement.

     

    20.8  Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed an original, but all of which shall constitute one and the same
      instrument.

     

    20.9  Governing
      Law; Venue.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York.

    

    [SIGNATURES
      COMMENCE ON FOLLOWING PAGE]

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      Contributor, Investor and Escrow Agent have executed this Agreement as of the
      day and year first above written.

    

    

    
      	 	
              CONTRIBUTOR:

            
	 	
              WATERFORD
                HOSPITALITY GROUP, LLC

            
	 	 
	 	
              By: 
                Slavik Suites, Inc., its member

            
	 	 	 
	 	 	 
	 	 	
              By:____________________________

            
	 	 	
              Name:
                Del Lauria

            
	 	 	
              Title:
                Vice President

            
	 	 	 
	 	 	
              By: 
                LMW Investments, Inc., its member

            
	 	 	 
	 	 	
              By:____________________________

            
	 	 	
              Name:
                Len Wolman

            
	 	 	
              Title:
                President

            
	 	 	 
	 	
              By: 
                MYSTIC HOTEL INVESTORS, LLC

            
	 	 	 
	 	 	 
	 	
              By: 
                Waterford Hospitality Group, LLC, Member

            
	 	 	 
	 	 	
              By: 
                Slavik Suites, Inc., its member

            
	 	 	 
	 	 	
              By:____________________________

            
	 	 	
              Name: 
                Del Lauria

            
	 	 	
              Title: 
                Vice President

            
	 	 	 
	 	 	
              By: 
                LMW Investments, Inc., its member

            
	 	 	 
	 	 	
              By:____________________________

            
	 	 	
              Name: 
                Len Wolman

            
	 	 	
              Title: 
                President

            
	 	 	 
	 	
              By: 
                Norwich Lodgings, LLC, Member

            
	 	 	 
	 	 	
              By:____________________________

            
	 	 	
              Name: 
                Glenn A. Jette

            
	 	 	
              Title: 
                Member Manager

            

    

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    

    
      	 	 	 
	 	 	
              By: 
                Mystic Suites, LLC

            
	 	 	 
	 	 	
              By:____________________________

            
	 	 	
              Name: 
                Len Wolman, Member

            
	 	 	 
	 	 	
              By:____________________________

            
	 	 	
              Name: 
                Alan Angel, Member

            
	 	 	 
	 	 	
              By:____________________________
                

            
	 	 	
              Name: 
                Mark Wolman, Member

            
	 	 	 
	 	 	 
	 	 	
              By: 
                EWHG, LLC, Member

            
	 	 	 
	 	 	
              By:____________________________

            
	 	 	
              Name:__________________________

            
	 	 	
              Title:___________________________

            
	 	 	 
	 	 	 
	 	 	
              By: 
                Glenn A. Jette, Member

            
	 	 	 
	 	 	___________________
	 	 	
              Name: 
                Glenn A. Jette

            
	 	 	 
	 	 	
              By: 
                Slavik, Inc., Member

            
	 	 	 
	 	 	
              By:____________________________

            
	 	 	
              Name: 
                Del Lauria

            
	 	 	
              Title: 
                Vice President

            
	 	 	 
	 	 	
              By: 
                Slavik Suites, Inc., Member

            
	 	 	 
	 	 	
              By:____________________________

            
	 	 	
              Name: 
                Del Lauria

            
	 	 	
              Title: 
                Vice President

            
	 	 	 
	 	 	
              INVESTOR:

            
	 	 	
              HERSHA
                HOSPITALITY LIMITED PARTNERSHIP

            
	 	 	
              By:  Hersha
                Hospitability Trust,

            
	 	 	
                  its
                general partner

            

    

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

       

    

    
      
        	 	 	 
	 	 	
                
                  By:____________________________

                

              
	 	 	
                
                  Name:__________________________

                

              
	 	 	
                
                  Title:___________________________

                

              
	 	 	 
	 	 	
                ESCROW
                  AGENT:

              
	 	 	
                FIRST
                  AMERICAN TITLE INSURANCE COMPANY

              
	 	 	 
	 	 	
                By:____________________________

              
	 	 	
                Name:__________________________

              
	 	 	
                Title:___________________________

              

      

       

    

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

        
        

      

    

     

    
      EXHIBIT
        1.1

      MEMBERSHIP
        INTERESTS AND OWNER ENTITIES

      
 

      
        
          	
                  Property

                	
                  Ownership

                   

                
	
                  1.
                    Hartford Marriott (ground leased)

                  Columbus
                    Blvd

                  Hartford,
                    CT 06106

                	
                  Adriaen's
                    Landing Hotel, LLC, composed of: 

                  46.875%
                    Mystic Hotel Investors, LLC

                  46.875%
                    Waterford Hospitality Group, LLC

                  (Approximation:
                    fractional interests change as construction progresses)

                   

                
	
                  2.
                    Hartford Hilton (ground leased)

                  315
                    Trumbull St.

                  Hartford,
                    CT 06103

                	
                  315
                    Trumbull Street Associates, LLC, composed of:

                  5%
                    Norwich Lodgings, LLC

                  5%
                    Slavik, Inc.

                  78%
                    Waterford Hospitality Group, LLC

                   

                
	
                  3.
                    Residence Inn Southington

                  778
                    West St.

                  Southington,
                    CT 06489

                   

                	
                  Southington
                    Suites, LLC, composed of:

                  67%
                    Mystic Hotel Investors, LLC

                
	
                  4.
                    Dunkin Donuts

                  790
                    West St.

                  Southington,
                    CT 06489

                   

                	
                  790
                    West Street LLC, composed of:

                  67%
                    Mystic Hotel Investors, LLC

                
	
                  5.
                    Residence Inn by Marriott

                  22
                    Segar St.

                  Danbury,
                    CT 06810

                   

                	
                  Danbury
                    Suites, LLC, composed of:

                  40%
                    Danbury Hotel, LLC (Danbury Hotel, LLC is 100% owned by Mystic
                    Hotel
                    Investors, LLC)

                
	
                  6.
                    Mystic Marriott Hotel and Spa

                  625
                    North Road

                  Groton,
                    CT 06320

                	
                  Exit
                    88 Hotel, LLC composed of:

                  99.9%
                    Mystic Hotel Investors, LLC

                  0.10%
                    Mystic Hotel Investors Remote Entity, Inc.

                
	
                  7.
                    Courtyard Hotel Warwick

                  55
                    Jefferson Park Road

                  Warwick,
                    RI 02888

                   

                	
                  Warwick
                    Lodgings, LLC, composed of: 

                  100%
                    Mystic Hotel Investors, LLC

                
	
                  8.
                    Residence Inn by Marriott and Whitehall Mansion

                  40-42
                    Whitehall Ave.

                  Mystic,
                    CT 06355

                	
                  Whitehall
                    Mansion Partners, LLC, composed of: 100% Mystic Hotel Investors,
                    LLC

                
	
                  9.
                    Courtyard by Marriott and Rosemont Suites

                  181
                    West Town St.

                  Norwich,
                    CT 06360

                   

                	
                  Norwich
                    Hotel, LLC, composed of:

                  100%
                    Mystic Hotel Investors, LLC

                
	
                  10.
                    Springhill Suites by Marriott

                  401
                    North Frontage Road

                  Waterford,
                    CT 06385

                	
                  Waterford
                    Suites, LLC, composed of:

                  100%
                    Mystic Hotel Investors, LLC

                

        

      

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

    

    EXHIBIT
      1.8

    ALLOCATION
      OF THE CONTRIBUTION VALUE

    

    

    

    Courtyard
      by Marriott, Warwick, RI: $9,300,000.

    

    Residence
      Inn by Marriott and Whitehall Mansion, Mystic, CT: $17,800,000.

    

    Courtyard
      by Marriott and Rosemont Suites, Norwich, CT: $12,600,000.

    

    SpringHill
      Suites by Marriott, Waterford, CT: $8,000,000.

    

    Mystic
      Marriott Hotel and Spa, Groton, CT: $54,500,000.

    

    Hartford
      Marriott, Hartford, CT: $87,150,000.

    

    Hartford
      Hilton, Hartford, CT: $35,175,000.

    

    Dunkin
      Donuts, 790 West St., Southington, CT: combined with Residence Inn by Marriott,
      Southington, CT.

    

    Residence
      Inn by Marriott, Southington, CT: $14,100,000

    

    Residence
      Inn by Marriott, Danbury, CT: $9,700,000.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]