Document:

1999 Employee Stock Purchase Plan

 
Exhibit 4.07

 
KANA SOFTWARE, INC. 
1999 EMPLOYEE STOCK PURCHASE PLAN 
 
As Amended and Restated July 31, 2002 
 
I. PURPOSE OF THE PLAN 
 
This Employee Stock Purchase Plan is intended to promote the interests of Kana Software, Inc., a Delaware corporation, by providing eligible employees
with the opportunity to acquire a proprietary interest in the Corporation through participation in a payroll deduction based employee stock purchase plan designed to qualify under Section 423 of the Code. Capitalized terms herein shall have the
meanings assigned to such terms in the attached Appendix. The provisions of the April 26, 2001 restatement of this Plan (the “2001 Restatement”) were approved by the Company’s stockholders on July 3, 2001 and became effective with the
offering period commencing on November 1, 2001. The provisions of the July 31, 2002 restatement of this Plan will become effective with the offering period commencing on November 1, 2002. All share numbers contained herein reflect the two-for-one
stock dividend effected on February 22, 2000 and the ten-for-one reverse stock split effected on December 11, 2001. 
 
II. ADMINISTRATION OF THE PLAN 
 
The Plan Administrator shall have full authority to interpret and construe any provision of the Plan and to adopt such rules and regulations for
administering the Plan as it may deem necessary in order to comply with the requirements of Code Section 423. Decisions of the Plan Administrator shall be final and binding on all parties having an interest in the Plan. 
 
III. STOCK SUBJECT TO PLAN 
 
A. The stock purchasable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including shares of Common Stock purchased on the open market. Subject to the automatic share increase provisions of Section III.B., the total number of shares of Common Stock reserved for issuance
over the term of the Plan shall be limited to 1,529,603 shares (subject to adjustment under subparagraph (B) below). Such share reserve includes (i) the initial share reserve of 100,000 shares, (ii) the January 3, 2000 automatic increase of
45,584 shares, (iii) the January 2, 2001 automatic increase of 66,666 shares, (iv) the increase of 1,000,000 shares authorized by the Board on April 26, 2001 and approved by the stockholders on July 3, 2001, (v) the January 2, 2002 automatic
increase of 45,483 shares, and (vi) the January 2, 2003 automatic increase of 71,870 shares. 
 
B. The number of shares of Common Stock available for issuance under the Plan shall automatically increase on the first trading day of January each calendar year during the term of the Plan, beginning
with calendar year 2000, by an amount equal to three-fourths of one percent (0.75%) of the total number of shares of Common Stock outstanding on the last trading 

 
day in December of the
immediately preceding calendar year, but in no event shall any such annual increase exceed 400,000 shares.1

 
C. Should any change be made to the Common Stock
by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and class of securities issuable under the Plan, (ii) the maximum number and class of securities purchasable per Participant on any one Purchase Date, (iii) the maximum number and class of
securities purchasable in total by all Participants on any one Purchase Date, (iv) the maximum number and/or class of securities by which the share reserve is to increase automatically each calendar year pursuant to the provisions of Section III.B
of this Article One and (v) the number and class of securities and the price per share in effect under each outstanding purchase right in order to prevent the dilution or enlargement of benefits thereunder. 
 
IV. OFFERING PERIODS 
 
A. Shares of Common Stock shall be offered for purchase under
the Plan through a series of overlapping offering periods until such time as (i) the maximum number of shares of Common Stock available for issuance under the Plan shall have been purchased or (ii) the Plan shall have been sooner terminated.

 
B. Each offering period shall be of such
duration (not to exceed twenty-four (24) months) as determined by the Plan Administrator prior to the start date of such offering period. Offering periods shall commence at semi-annual intervals on the first business day of May and on the first
business day of November each year over the term of the Plan. Accordingly, two (2) separate offering periods shall commence in each calendar year the 2001 Restatement remains in existence. However, the initial offering period under the 2001
Restatement shall begin on the first business day in November 2001 and end on the last business day in October 2003. 
 
C. Each offering period shall be comprised of a series of one or more successive Purchase Intervals. Purchase Intervals shall run from the
first business day in May to the last business day in October each year and from the first business day in November each year to the last business day in April in the following year. 
 
D. Should the Fair Market Value per share of Common Stock on any Purchase Date within a particular offering
period be less than the Fair Market Value per share of Common Stock on the start date of that offering period, then the individuals participating in such offering period shall, immediately after the purchase of shares of Common Stock on their behalf
on such Purchase Date, be transferred from that offering period and automatically enrolled in the next offering period commencing after such Purchase Date. 

	1	 	For the 2000 and 2001 calendar years, the annual increase was limited to 66,666 shares. The increase to 400,000 shares became effective for the 2002 calendar year
and each subsequent calendar year. 

V. ELIGIBILITY 
 
A. Each individual who is an Eligible Employee on the start date of any offering period under the Plan may
enter that offering period on such start date. However, an Eligible Employee may participate in only one offering period at a time. 
 
B. Except as otherwise provided in Section IV.D. above, an Eligible Employee must, in order to participate in a particular offering
period, complete the enrollment forms prescribed by the Plan Administrator (including a stock purchase agreement and a payroll deduction authorization) and file such forms with the Plan Administrator (or its designate) on or before the start date of
that offering period. 
 
VI. PAYROLL DEDUCTIONS

 
A. The payroll deduction authorized by the
Participant for purposes of acquiring shares of Common Stock during an offering period may be any multiple of one percent (1%) of the Cash Earnings paid to the Participant during each Purchase Interval within that offering period, up to a maximum of
fifteen percent (15%). The deduction rate so authorized shall continue in effect throughout the offering period, except to the extent such rate is changed in accordance with the following guidelines: 
 
(i) The Participant may, at any time during
the offering period, reduce his or her rate of payroll deduction to become effective as soon as possible after filing the appropriate form with the Plan Administrator. The Participant may not, however, effect more than one (1) such reduction per
Purchase Interval. 
 
(ii) The
Participant may, prior to the commencement of any new Purchase Interval within the offering period, increase the rate of his or her payroll deduction by filing the appropriate form with the Plan Administrator. The new rate (which may not exceed the
fifteen percent (15%) maximum) shall become effective on the start date of the first Purchase Interval following the filing of such form. 
 
B. Payroll deductions shall begin on the first pay day administratively feasible following the start date of the offering period and shall
(unless sooner terminated by the Participant) continue through the pay day ending with or immediately prior to the last day of that offering period. The amounts so collected shall be credited to the Participant’s book account under the Plan,
but no interest shall be paid on the balance from time to time outstanding in such account. The amounts collected from the Participant shall not be required to be held in any segregated account or trust fund and may be commingled with the general
assets of the Corporation and used for general corporate purposes. 
 
C. Payroll deductions shall automatically cease upon the termination of the Participant’s purchase right in accordance with the provisions of the Plan. 
 
D. The Participant’s acquisition of Common Stock under the Plan on any Purchase Date shall neither limit
nor require the Participant’s acquisition of Common Stock on any subsequent Purchase Date, whether within the same or a different offering period. 

 
VII. PURCHASE RIGHTS

 
A. Grant of Purchase Rights. A Participant
shall be granted a separate purchase right for each offering period in which he or she participates. The purchase right shall be granted on the start date of the offering period and shall provide the Participant with the right to purchase shares of
Common Stock, in a series of successive installments during that offering period, upon the terms set forth below. The Participant shall execute a stock purchase agreement embodying such terms and such other provisions (not inconsistent with the
Plan) as the Plan Administrator may deem advisable. 
 
Under no circumstances shall purchase rights be granted under the Plan to any Eligible Employee if such individual would, immediately after the grant, own (within the meaning of Code Section 424(d)) or hold outstanding options or
other rights to purchase, stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Corporation or any Corporate Affiliate. 
 
B. Exercise of the Purchase Right. Each purchase right shall be automatically exercised in installments on
each successive Purchase Date within the offering period, and shares of Common Stock shall accordingly be purchased on behalf of each Participant on each such Purchase Date. The purchase shall be effected by applying the Participant’s payroll
deductions for the Purchase Interval ending on such Purchase Date to the purchase of whole shares of Common Stock at the purchase price in effect for the Participant for that Purchase Date. 
 
C. Purchase Price. The purchase price per share at which
Common Stock will be purchased on the Participant’s behalf on each Purchase Date within the particular offering period in which he or she is enrolled shall be equal to eighty-five percent (85%) of the lower of (i) the Fair Market Value per
share of Common Stock on the start date of that offering period or (ii) the Fair Market Value per share of Common Stock on that Purchase Date. 
 
D. Number of Purchasable Shares. The number of shares of Common Stock purchasable by a Participant on each Purchase Date during the
particular offering period in which he or she is enrolled shall be the number of whole shares obtained by dividing the amount collected from the Participant through payroll deductions during the Purchase Interval ending with that Purchase Date by
the purchase price in effect for the Participant for that Purchase Date. However, the Plan Administrator shall have the discretionary authority, exercisable prior to the start of any offering period under the Plan, to impose limitations (or to
increase, decrease or remove such limitations) to be in effect for the number of shares purchasable per Participant and in total by all Participants enrolled in that particular offering period on each Purchase Date which occurs during that offering
period. 
 
E. Excess Payroll Deductions. Any
payroll deductions not applied to the purchase of shares of Common Stock on any Purchase Date because they are not sufficient to purchase a whole share of Common Stock shall be held for the purchase of Common Stock on the next Purchase Date in the
same offering period. Any payroll deductions not applied to the purchase of shares on the last Purchase Date in the offering period shall be promptly refunded. Furthermore, any payroll deductions not applied to the purchase of Common Stock by reason
of 

 
the limitation on the maximum
number of shares purchasable per Participant Orin total by all Participants on the Purchase Date shall be promptly refunded. 
 
F. Withdrawal/Termination of Purchase Right. The following provisions shall govern the withdrawal from participation in the Plan and the
termination of outstanding purchase rights: 
 
(i) A Participant may withdraw from the offering period in which he or she is enrolled by filing the appropriate form with the Plan Administrator (or its designate) at any time prior to the next scheduled Purchase Date in that
offering period, and no further payroll deductions under the Plan shall be collected from the Participant with respect to that offering period. Any payroll deductions previously collected during the Purchase Interval in which such withdrawal occurs
shall, at the Participant’s election, be immediately refunded or held for the purchase of shares on the next Purchase Date. If no such election is made at the time of such withdrawal, then the payroll deductions collected from the Participant
with respect to the Purchase Interval in which such withdrawal occurs shall be refunded as soon as possible. 
 
(ii) The Participant’s withdrawal from the offering period shall be irrevocable, and the Participant may not
subsequently rejoin that offering period. In order to resume participation in any subsequent offering period, such individual must re-enroll in the Plan (by making a timely filing of the prescribed enrollment forms) on or before the start date of
that offering period. 
 
(iii)
Should the Participant cease to remain an Eligible Employee for any reason (including death, disability or change in status) while his or her purchase right remains outstanding, then that purchase right shall immediately terminate, and all of the
Participant’s payroll deductions for the Purchase Interval in which the purchase right so terminates shall be immediately refunded. However, should the Participant cease to remain in active service by reason of an approved unpaid leave of
absence, then the Participant shall have the right, exercisable up until the last business day of the Purchase Interval in which such leave commences, to (a) withdraw all the payroll deductions collected to date on his or her behalf for that
Purchase Interval or (b) have such funds held for the purchase of shares on his or her behalf on the next scheduled Purchase Date. In no event, however, shall any further payroll deductions be collected on the Participant’s behalf during such
leave. Upon the Participant’s return to active service (x) within ninety (90) days following the commencement of such leave or (y) prior to the expiration of any longer period for which such Participant’s right to reemployment with the
Corporation is guaranteed by statute or contract, his or her payroll deductions under the Plan shall automatically resume at the rate in effect at the time the leave began, unless the Participant withdraws from the Plan prior to his or her return.
An individual who returns to active employment following a leave of absence which exceeds in duration the applicable (x) or (y) time period will be treated as a new Employee for purposes of subsequent participation in the Plan and must accordingly
re-enroll in the Plan (by making a timely filing of the prescribed enrollment forms) on or before the start date of any subsequent offering period in which he or she wishes to participate. 

 
G. Change in
Control. Each outstanding purchase right shall automatically be exercised, immediately prior to the effective date of any Change in Control, by applying the payroll deductions of each Participant for the Purchase Interval in which such Change in
Control occurs to the purchase of whole shares of Common Stock at a purchase price per share for each Participant equal to eighty-five percent (85%) of the lower of (i) the Fair Market Value per share of Common Stock on the start date of the
particular offering period in which the Participant is enrolled at the time such Change in Control occurs or (ii) the Fair Market Value per share of Common Stock immediately prior to the effective date of such Change in Control. However, the
applicable limitation on the number of shares of Common Stock purchasable per Participant shall continue to apply to any such purchase, but not the limitation applicable to the maximum number of shares of Common Stock purchasable in total by all
Participants on any one Purchase Date. 
 
The
Corporation shall use its best efforts to provide at least ten (10)-days prior written notice of the occurrence of any Change in Control, and Participants shall, following the receipt of such notice, have the right to terminate their outstanding
purchase rights prior to the effective date of the Change in Control. 
 
H. Proration of Purchase Rights. Should the total number of shares of Common Stock to be purchased pursuant to outstanding purchase rights on any particular date exceed the number of shares then available for issuance under
the Plan, the Plan Administrator shall make a pro-rata allocation of the available shares on a uniform and nondiscriminatory basis, and the payroll deductions of each Participant, to the extent in excess of the aggregate purchase price payable for
the Common Stock pro-rated to such individual, shall be refunded. 
 
I. Assignability. The purchase right shall be exercisable only by the Participant and shall not be assignable or transferable by the Participant. 
 
J. Stockholder Rights. A Participant shall have no stockholder rights with respect to the shares subject to
his or her outstanding purchase right until the shares are purchased on the Participant’s behalf in accordance with the provisions of the Plan and the Participant has become a holder of record of the purchased shares. 
 
VIII. ACCRUAL LIMITATIONS 
 
A. No Participant shall be entitled to accrue rights to
acquire Common Stock pursuant to any purchase right outstanding under this Plan if and to the extent such accrual, when aggregated with (i) rights to purchase Common Stock accrued under any other purchase right granted under this Plan and (ii)
similar rights accrued under other employee stock purchase plans (within the meaning of Code Section 423)) of the Corporation or any Corporate Affiliate, would otherwise permit such Participant to purchase more than Twenty-Five Thousand Dollars
($25,000.00) worth of stock of the Corporation or any Corporate Affiliate (determined on the basis of the Fair Market Value per share on the date or dates such rights are granted) for each calendar year such rights are at anytime outstanding.

 
B. For purposes of applying such accrual
limitations to the purchase rights granted under the Plan, the following provisions shall be in effect: 

 
(i) The right to acquire Common Stock under each outstanding purchase right shall accrue in a series of installments on each successive Purchase Date during the offering period on which such right remains outstanding. 
 
(ii) No right to acquire Common Stock under
any outstanding purchase right shall accrue to the extent the Participant has already accrued in the same calendar year the right to acquire Common Stock under one or more other purchase rights at a rate equal to Twenty-Five Thousand Dollars
($25,000.00) worth of Common Stock (determined on the basis of the Fair Market Value per share on the date or dates of grant) for each calendar year such rights were at any time outstanding. 
 
C. If by reason of such accrual limitations, any purchase
right of a Participant does not accrue for a particular Purchase Interval, then the payroll deductions which the Participant made during that Purchase Interval with respect to such purchase right shall be promptly refunded. 
 
D. In the event there is any conflict between the provisions
of this Article and one or more provisions of the Plan or any instrument issued thereunder, the provisions of this Article shall be controlling. 
 
IX. EFFECTIVE DATE AND TERM OF THE PLAN 
 
A. The Plan was adopted by the Board on July 7, 1999, approved by the sole stockholder on August 16, 1999, and became effective at the
Effective Time, September 21, 1999. 
 
B. The Plan
was amended and restated by the 2001 Restatement to effect the following changes to the Plan: (i) increase the number of shares of Common Stock authorized for issuance over the term of the Plan by an additional 1,000,000 shares, (ii) increase the
limit on the maximum number of shares by which the share reserve under the Plan may automatically increase each calendar year, beginning with the 2002 calendar year, from 66,666 shares to 400,000 shares, (iii) implement a series of overlapping
twenty-four (24)-month offering periods beginning at semi-annual intervals each year, (iv) establish a series of semi-annual purchase dates within each such offering period, (v) increase the maximum number of shares of Common Stock purchasable in
total by all Participants on any one Purchase Date from 25,000 shares to 100,000 shares and (vi) revise certain provisions of the Plan document in order to facilitate administration of the Plan. 
 
C. The Plan was amended and restated on July 31, 2002 to (i)
remove the limitation on the maximum number of shares purchasable per Participant on any one Purchase Date, and (ii) remove the limitation on the maximum number of shares purchasable by all Participants on any one Purchase Date. 
 
D. Unless sooner terminated by the Board, the Plan shall
terminate upon the earliest of (i) the last business day in October 2009, (ii) the date on which all shares available for issuance under the Plan shall have been sold pursuant to purchase rights exercised under the Plan or (iii) the date on which
all purchase rights are exercised in connection with a Change in 

 
Control. No further purchase
rights shall be granted or exercised, and no further payroll deductions shall be collected, under the Plan following such termination. 
 
X. AMENDMENT OF THE PLAN 
 
A. The Board may alter, amend, suspend or terminate the Plan at any time to become effective immediately following the close of any
Purchase Interval. However, the Plan may be amended or terminated immediately upon Board action, if and to the extent necessary to assure that the Corporation will not recognize, for financial reporting purposes, any compensation expense in
connection with the shares of Common Stock offered for purchase under the Plan, should the financial accounting rules applicable to the Plan at the Effective Time be subsequently revised so as to require the Corporation to recognize compensation
expense in the absence of such amendment or termination. 
 
B. In no event may the Board effect any of the following amendments or revisions to the Plan without the approval of the Corporation’s stockholders:(i) increase the number of shares of Common Stock issuable under the Plan,
except for permissible adjustments in the event of certain changes in the Corporation’s capitalization, (ii) alter the purchase price formula so as to reduce the purchase price payable for the shares of Common Stock purchasable under the Plan
or (iii) modify the eligibility requirements for participation in the Plan. 
 
XI. GENERAL PROVISIONS 
 
A. All costs and expenses incurred in the administration of the Plan shall be paid by the Corporation; however, each Plan Participant shall bear all costs and expenses incurred by such individual in the sale or other disposition of
any shares purchased under the Plan. 
 
B. Nothing
in the Plan shall confer upon the Participant any right to continue in the employ of the Corporation or any Corporate Affiliate for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or
any Corporate Affiliate employing such person) or of the Participant, which rights are hereby expressly reserved by each, to terminate such person’s employment at any time for any reason, with or without cause. 
 
C. The provisions of the Plan shall be governed by the laws of
the State of California without resort to that State’s conflict-of-laws rules. 
 

 
SCHEDULE A

 
CORPORATIONS PARTICIPATING IN

EMPLOYEE STOCK PURCHASE PLAN 
AS OF THE EFFECTIVE TIME 
 
Kana Software, Inc. 
 

 
APPENDIX

 
The following definitions shall be in effect
under the Plan: 
 
A. Board shall mean the
Corporation’s Board of Directors. 
 
B. Cash
Earnings shall mean the (i) regular base salary paid to a Participant by one or more Participating Companies during such individual’s period of participation in one or more offering periods under the Plan plus(ii) all overtime payments,
bonuses, commissions, profit-sharing distributions and other incentive-type payments received during such period. Such Cash Earnings shall be calculated before deduction of (A) any income or employment tax withholdings or (B) any contributions made
by the Participant to any Code Section 401(k) salary deferral plan or Code Section 125 cafeteria benefit program now or hereafter established by the Corporation or any Corporate Affiliate. However, Cash Earnings shall not include any contributions
made on the Participant’s behalf by the Corporation or any Corporate Affiliate to any employee benefit or welfare plan now or hereafter established (other than Code Section 401(k) or Code Section 125 contributions deducted from such Cash
Earnings). 
 
C. Change in Control shall mean a
change in ownership of the Corporation pursuant to any of the following transactions: 
 
(i) a merger or consolidation in which securities possessing more than fifty percent (50%) of the total combined voting
power of the Corporation’s outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction, or 
 
(ii) the sale, transfer or other disposition of all or substantially all of the assets of the
Corporation in complete liquidation or dissolution of the Corporation, or 
 
(iii) the acquisition, directly or indirectly, by a person or related group of persons (other than the Corporation or a person that directly or indirectly controls, is controlled by or is under common
control with the Corporation) of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation’s outstanding securities
pursuant to a tender or exchange offer made directly to the Corporation’s stockholders. 
 
D. Code shall mean the Internal Revenue Code of 1986, as amended. 
 
E. Common Stock shall mean the Corporation’s common stock, $0.001 par value. 
 
F. Corporate Affiliate shall mean any parent or subsidiary
corporation of the Corporation (as determined in accordance with Code Section 424), whether now existing or subsequently established. 
 
G. Corporation shall mean Kana Software, Inc., a Delaware corporation, and any corporate successor to all or substantially all of the
assets or voting stock of Kana Software, Inc. which shall by appropriate action adopt the Plan. 

 
H. Effective
Time shall mean the time at which the Underwriting Agreement for the initial public offering of the Common Stock was executed and finally priced. Any Corporate Affiliate which becomes a Participating Corporation after such Effective Time shall
designate a subsequent Effective Time with respect to its employee-Participants. 
 
I. Eligible Employee shall mean any person who is employed by a Participating Corporation on a basis under which he or she is regularly expected to render more than twenty (20) hours of service per
week for more than five (5) months per calendar year for earnings considered wages under Code Section 3401 (a). 
 
J. Fair Market Value per share of Common Stock on any relevant valuation date shall be determined in accordance with the following
provisions: 
 
(i) If the Common
Stock is at the time traded on the Nasdaq National Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question, as such price is reported by the National Association of Securities Dealers
on the Nasdaq National Market and published in The Wall Street Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for
which such quotation exists. 
 
(ii) If the Common Stock is at the time listed on any Stock Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the Stock Exchange determined by the Plan
Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such exchange and published in The Wall Street Journal. If there is no closing selling price for the Common
Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. 
 
K. 1933 Act shall mean the Securities Act of 1933, as amended. 
 
L. Participant shall mean any Eligible Employee of a Participating Corporation who is actively participating
in the Plan. 
 
M. Participating Corporation shall
mean the Corporation and such Corporate Affiliate or Affiliates as may be authorized from time to time by the Board to extend the benefits of the Plan to their Eligible Employees. The Participating Corporations in the Plan are listed in attached
Schedule A. 
 
N. Plan shall mean the
Corporation’s 1999 Employee Stock Purchase Plan, asset forth in this document. 
 
O. Plan Administrator shall mean the committee of two (2) or more Board members appointed by the Board to administer the Plan. 
 
P. Purchase Date shall mean the last business day of each Purchase Interval. The initial Purchase Date shall
be April 30, 2002. 

 
Q. Purchase
Interval shall mean each successive six (6)-month period within a particular offering period at the end of which there shall be purchased shares of Common Stock on behalf of each Participant. 
 
R. Stock Exchange shall mean either the American Stock
Exchange or the New York Stock Exchange. 
 
S.
Underwriting Agreement shall mean the agreement between the Corporation and the underwriter or underwriters that managed the initial public offering of the Common Stock.================================================================================

                            EXCEPTED HOLDER AGREEMENT

                                     BETWEEN

                        CNL HOSPITALITY PROPERTIES, INC.,

                         CNL HOSPITALITY PARTNERS, L.P.

                                       AND

                            HERSHA HOSPITALITY TRUST

                              DATED  APRIL 21, 2003

================================================================================

<PAGE>
     This  EXCEPTED HOLDER AGREEMENT (this "Agreement") is made and entered into
                                            ---------
as  of  April 21, 2003, by and between Hersha Hospitality Trust, a Maryland real
estate  investment  trust  ("HT"),  CNL Hospitality Properties, Inc., a Maryland
                             --
corporation  ("CHP")  and  CNL  Hospitality  Partners,  L.P., a Delaware limited
               ---
partnership  ("CHPLP").
               ----

     WHEREAS,  CHPLP  proposes  to  purchase  from  HT's  subsidiary  (the
"Acquisition")  preferred  limited  partnership  interests of Hersha Hospitality
 -----------
Limited  Partnership,  a  limited  partnership  organized  under the laws of the
Commonwealth of Virginia ("HLP"), and preferred limited partnership interests of
                           ---
HT/CNL  Metro  Hotels,  L.P.,  a limited partnership organized under the laws of
Delaware  ("JV"), pursuant to that certain Securities Purchase Agreement entered
            --
into  by  CHPLP,  HT  and  HLP  as  of  April  21,  2003.

     WHEREAS, the preferred limited partnership interests of HLP (the "Preferred
                                                                       ---------
OP  Units")  are  exchangeable for shares of HT's Series A Preferred Shares, par
---------
value  $.01  per share (the "Series A Preferred Shares"), and for shares of HT's
                             -------------------------
Class  A  Common Shares, par value $.01 per share (the "Class A Common Shares"),
                                                        ---------------------
and  the  preferred  limited  partnership  interests  of JV (the "JV Units") are
                                                                  --------
exchangeable  for  Class  A  Common  Shares.

     WHEREAS,  HT's  Articles of Amendment and Restatement of its Declaration of
Trust  (the "Declaration"), imposes certain limitations on the ownership of HT's
             -----------
shares  of  beneficial interest, which limitations include a general restriction
prohibiting  any  Person  from  "Beneficially Owning" or "Constructively Owning"
more  than  9.9%  of any class or series of "Equity Shares" of HT, as such terms
are  defined  therein  (the  "Ownership Limit").  Capitalized terms used in this
                              ---------------
Agreement  that  are not otherwise defined shall have the meanings given to them
in the Declaration and in that certain Securities Purchase Agreement dated April
21,  2003  by  and  among  CHPLP,  HT  and  HLP  (the  "Purchase  Agreement").
                                                        -------------------

     WHEREAS,  pursuant  to  Article  VII, Section 1(G) of the Declaration, HT's
Board  of  Trustees is permitted to exempt a Person from the Ownership Limit (as
to such Person, an "Excepted Holder Limit") and allow ownership of Equity Shares
                    ---------------------
by  such Person in excess of the Ownership Limit if certain conditions described
in  Article  VII,  Section  1(G)  of  the  Declaration  are  satisfied.

     WHEREAS,  the Board of Trustees of HT has resolved to exempt CHPLP from the
Ownership  Limit  conditioned upon each of CHP and CHPLP agreeing to be bound by
the  terms  of  this  Agreement.

     NOW,  THEREFORE,  in  consideration  of  the  mutual  provisions  and
representations,  warranties,  agreements  and  covenants  herein contained, the
parties  hereto,  intending  to  be  legally  bound,  hereby  agree  as follows:

1.   REPRESENTATIONS  AND  COVENANTS  OF  CHP  AND  CHPLP

     Commencing  on  the  date  hereof,  and  during any period that an Excepted
Holder Limit established pursuant to this Agreement (as may be amended from time
to  time)  remains in effect, CHP and CHPLP represent and agree as follows, and,
to  the  extent  set  forth  in  paragraph  1.6  below,  HT  agrees:

<PAGE>
     1.1     No  "individual",  as such term is defined in  Section 542(a)(2) of
the  Internal  Revenue  Code  of 1986, as amended (the "Code"), (hereinafter, an
"Individual"),  owns, or will own at any time while the Excepted Holder Limit is
 ----------
in  effect,  directly  (including  through  a nominee or similar arrangement) or
indirectly,  after taking into account the provisions of Section 544 of Code, as
modified  by  Section  856(h)(3)  of  the Code (such ownership being referred to
herein  as  "Beneficial  Ownership" or variations thereof), in excess of 9.8% of
any  class  of  the  issued and outstanding common or preferred equity shares of
CHP.

     1.2     Article  VII  of  CHP's  Articles  of  Incorporation  restricts any
"Person",  as defined therein, from Beneficially Owning in excess of 9.8% of any
class  of  CHP's  issued  and  outstanding  common and preferred stock (the "CHP
Ownership  Limitation"),  unless  the  CHP  Ownership  Limitation is waived by a
majority  of  the  Board  of Directors of CHP, provided any such waiver will not
jeopardize CHP's status as a REIT.  CHP's Board of Directors has not granted any
such  waiver  of  the CHP Ownership Limitation so as to permit any Individual to
Beneficially  Own in excess of 9.8% of any class of CHP's issued and outstanding
common  or preferred stock; and CHP hereby covenants and agrees not to grant any
such  waiver  of  the  CHP  Ownership Limitation if such waiver would jeopardize
CHP's  status  as  a  REIT.

     1.3     (a)  After applying the constructive ownership rules of Section 318
of  the  Code,  as modified by Section 856(d)(5) of the Code, the Acquisition or
ownership by CHPLP of the Preferred OP Units, the Series A Preferred Shares, the
Class  A  Common  Shares  or  the  JV  Units  as  contemplated by this Agreement
(excluding, for this purpose, constructive ownership of any such Units or Shares
by CHPLP or any other Person as a direct or indirect result of CHPLP's ownership
of  interests  in  HLP or the JV as contemplated by the Purchase Agreement) will
not cause HT to be treated as "related" to any tenant of HT or any subsidiary of
HT  within  the  meaning  of  Section 856(d)(2)(B) of the Code.  Each of CHP and
CHPLP  agrees  that, to the extent that its Beneficial or Constructive Ownership
of  Equity  Shares would cause HT to be treated as "related" to any tenant of HT
or  any subsidiary of HT within the meaning of Section 856(d)(2)(B) of the Code,
the  Equity Shares the ownership of which otherwise would cause HT to be treated
as  "related"  to any tenant of HT or any subsidiary of HT within the meaning of
Section  856(d)(2)(B)  of the Code will be subject to the treatment described in
Article  VII, Section 1(C) of the Declaration to the extent that the application
of  such  provision of the Declaration is necessary to maintain HT's status as a
REIT;  provided, however, such treatment shall not be applied to the extent that
CHPLP  is  treated  as  constructively  owning  Equity Shares as a result of its
ownership  of  interests  in  HLP  or  the  JV  as  contemplated by the Purchase
Agreement.

     (b)     The  Acquisition  or  ownership by CHPLP of the Preferred OP Units,
the  Series  A  Preferred  Shares,  the Class A Common Shares or the JV Units as
contemplated  by  this  Agreement  will  not  cause (i) persons owning, or being
deemed  to own, directly or indirectly (determined after applying the provisions
of  Section 318 of the Code, as modified, by the provisions of Section 856(d)(5)
of the Code), 35% or more of the voting stock or value of the shares of HT to be
deemed  to own, directly or indirectly (determined after applying the provisions
of  Section 318 of the Code, as modified, by the provisions of Section 856(d)(5)
of the Code), 35% or more of (x) the voting stock or total number of shares of a
corporate  independent

                                        3
<PAGE>
contractor  providing  services  to  a tenant of HT, HLP, or any other entity in
which  either  HT or HLP has an equity interest or (y) the net assets or profits
of  a non-corporate independent contractor providing services to a tenant of HT,
HLP,  or any other entity in which either HT or HLP has an equity interest, each
within  the  meaning  of  Section  856(d)(3)  of  the  Code  (an  "Independent
                                                                   -----------
Contractor"),  or  (ii)  an  Independent  Contractor to own or be deemed to own,
----------
directly  or indirectly (determined after applying the provisions of Section 318
of  the  Code, as modified, by the provisions of Section 856(d)(5) of the Code),
35%  or  more  of  the voting stock or value of the shares of HT (excluding, for
this  purpose,  constructive  ownership  of shares of HT as a direct or indirect
result  of  constructive ownership of Preferred OP Units, the Series A Preferred
Shares,  the Class A Common Shares or the JV Units by CHPLP or any other Person,
or  CHPLP's  ownership  of  interests  in  HLP  or the JV as contemplated by the
Purchase  Agreement).  Each of CHP and CHPLP agrees that, to the extent that its
Beneficial or Constructive Ownership of Equity Shares would cause an Independent
Contractor  not  to  satisfy the requirements described above, the Equity Shares
the  ownership  of which otherwise would cause the Independent Contractor not to
meet  those  requirements  will be subject to the treatment described in Article
VII,  Section 1(C) of the Declaration to the extent that the application of such
provision  of  the  Declaration  is necessary to maintain HT's status as a REIT;
provided,  however,  such  treatment shall not be applied to the extent that the
Independent  Contractor  requirements  are  not satisfied as a result of CHPLP's
ownership  of  interests  in  HLP  or  the  JV  as  contemplated by the Purchase
Agreement.

     1.4     In  the  event that CHPLP is no longer a wholly-owned subsidiary of
CHP  at any time after the date of this Agreement when the Excepted Holder Limit
is in effect, no partner of CHPLP other than CHP will own a partnership interest
in  CHPLP  that would cause any individual to Beneficially Own or Constructively
Own  (as  determined  pursuant  to  Article VII of the Articles), as a result of
CHPLP's  ownership  of  Preferred  OP  Units, Series A Preferred Shares, Class A
Common  Shares,  or JV Units, more than 9.9% of the outstanding Equity Shares at
any  time.

     1.5     CHPLP  agrees  that it shall not Beneficially Own or Constructively
Own  Equity  Shares that would violate the Excepted Holder Limit established for
CHPLP  pursuant  to this Agreement and the resolutions of HT's Board of Trustees
or cause any Individual to Beneficially Own Equity Shares that would violate the
Ownership  Limit and acknowledges that the exemption of CHPLP from the Ownership
Limit  and  granting  of  the Excepted Holder Limit to CHPLP is made in reliance
upon  the  representations  contained  herein and shall be effective only for so
long as and to the extent such representations continue to be true, accurate and
complete,  and further agrees that any violation or attempted violation by CHPLP
of  the  Excepted  Holder  Limit  granted  pursuant  to  this  Agreement  or the
provisions of HT's Board of Trustees' resolution implementing this Agreement (or
other  action  contrary  to  the  ownership  restrictions  imposed  under  the
Declaration  except  as  otherwise permitted pursuant to CHPLP's Excepted Holder
Limit,  this  Agreement  or the provisions of HT's Board of Trustees' resolution
implementing  this  Agreement)  will  automatically  subject  that number of the
Equity Shares Beneficially Owned or Constructively Owned by CHPLP that otherwise
would  result  in  the  violation,  to  the  treatment described in Article VII,
Section  1(C)  of  the  Declaration.

     1.6     Each  of  HT and CHPLP agrees that if at any time subsequent to the
date  hereof,  any  Person  would  be  treated  as  Beneficially  Owning  or
Constructively  Owning  Equity  Shares  in  excess of the Ownership Limit or, if
applicable,  the Excepted Holder Limit with respect to such Person, in violation
of  Article  VII of the Declaration, then it is agreed that Article VII, Section

                                        4
<PAGE>
1(C)  of  the  Declaration  shall be applied first to the Equity Shares actually
owned  by  any  such  Person  other  than  CHPLP,  second  to  the Equity Shares
Beneficially  Owned  or  Constructively  Owned  by such Person other than Equity
Shares actually owned by CHPLP, and third to the Equity Shares actually owned by
CHPLP.

2.   ESTABLISHMENT  OF  AN  EXCEPTED  HOLDER  LIMIT  FOR  CHPLP

     Based  on  the  representations and agreements contained in this Agreement,
HT, effective as of the execution of this Agreement, is exempting CHPLP from the
Ownership  Limit,  by adopting a resolution of its Board of Trustees in the form
attached  hereto  as  Exhibit  A,  provided,  however, that as set forth in such
                                   --------   -------
resolution,  in  no  event  shall  CHPLP's  Beneficial Ownership or Constructive
Ownership  of Series A Preferred Shares and Class A Common Shares exceed 100% of
the  issued  and  outstanding Series A Preferred Shares or 60% of the issued and
outstanding  Class A Common Shares of HT outstanding at any time (or such higher
percentage  as  is  necessary  to accommodate the issuance of additional Class A
Common  Shares  due  to  an  adjustment  of  the  applicable  exchange  price or
conversion  price  of the Series A Preferred Units, Series A Preferred Shares or
JV  Units);  provided  however that there shall be no limit on CHP's and CHPLP's
Beneficial Ownership or Constructive Ownership of Class A Common Shares, subject
to  CHP's  and  CHPLP's  compliance  with  the  representations,  warranties and
covenants  contained  in  this Agreement, if (x) HT fails to pay in full for two
consecutive quarters the dividend required pursuant to Section 2 of the Articles
Supplementary  designating the Series A Preferred Shares, or HLP fails to pay in
full  for  two  consecutive quarters the distributions with respect to its 10.5%
Series  A  Preferred  Units  required by the Second Amendment to the Amended and
Restated  Limited  Partnership Agreement of HLP, or (y) HT fails to maintain its
status  as  a  real  estate  investment trust under the Internal Revenue Code of
1986,  as  amended,  (the  "Code").
                            ----

3.   RELATED  PARTIES

     3.1     For  purposes  of  the  representation  contained  in paragraph 1.3
above,  each  of  CHP  and  CHPLP  hereby  represent  that,  to  the best of its
knowledge, none of CHP, CHPLP, and each Indirect Equity Owner (as defined below)
owns  an  interest  in any Tenant of HT or its subsidiaries listed on Schedule 1
attached  hereto  that would cause HT to own (directly or constructively through
the  application  of  Code  Section 318, as modified by Code Section 856(d)(5)),
more  than  a  9.9%  interest (within the meaning of Section 856(d)(2)(B) of the
Code) in such entity.  CHP has reviewed the most recently received copies of all
financial  reports  received  from  (i)  each  partnership  or limited liability
company in which CHP directly holds an equity interest and (ii) each corporation
or  trust in which CHP, as the case may be, directly or indirectly owns a 10% or
greater  equity interest (which financial reports describe all entities in which
such  partnerships,  limited liability companies, corporations and trusts own an
equity  interest  as  of  the date of such reports) and compared the information
contained  in  such  financial  reports  to  Schedule  1.  For  purposes of this
Agreement,  an  "Indirect  Equity  Owner" means any Person (i) that is deemed to
                 -----------------------
Beneficially Own or Constructively Own an interest in shares of HT that are held
by  CHP or CHPLP, and (ii) whose direct or indirect ownership of any interest in
any  tenant  of  HT would be attributed to HT through the application of Section
318  of  the  Code,  as  modified by Code Section 856(d)(5) (excluding, for this
purpose, constructive ownership as a result of CHPLP's ownership of interests in
HLP  or the JV as contemplated by the Purchase

                                        5
<PAGE>
Agreement).  In  addition,  CHP  has  received  representations from each of its
Indirect  Equity  Owners that the Indirect Equity Owner does not own more than a
9.9%  interest  (within  the  meaning of Section 856(d)(2)(B) of the Code) in an
entity described on Schedule 1. These representations are made only with respect
to  the  date hereof assuming the Acquisition has already taken place and do not
constitute  continuing  representations or covenants with respect to the matters
described  in  this  Section 3.1, provided that CHP will provide the information
described  in  Section  3.2  to  HT  on  a  continuing  basis.

     3.2     CHP  will  provide  the  following  information  to  HT and HT will
provide  the  following  information  to  CHP  and  CHPLP:

          (a)     No  later than the last business day of each calendar quarter,
     HT shall update the information contained in Schedule 1 (the "Tenant List")
                                                                   -----------
     and provide such information to CHP, who agrees to provide such information
     to  each  of  CHPLP  and  to  any  Indirect  Equity  Owner;

          (b)     No  later  than 30 days after receipt of the Tenant List, CHP,
     CHPLP  and any Indirect Equity Owner shall inform HT of their direct equity
     ownership  of  any entity in which it owns a 10% or greater equity interest
     (as  described in Section 856(d)(2)(B) of the Code), and whose name appears
     on  the  Tenant  List;

          (c)     No  later than the last day of each calendar quarter (but only
     for  so  long  as  CHP or CHPLP Beneficially Owns or Constructively Owns at
     least  10% of the Equity Shares of HT), CHP and CHPLP shall deliver to HT a
     certification  stating  that  each  of  CHP  and  CHPLP  has  reviewed  the
     information  regarding  investments  of  each  (i)  partnership  or limited
     liability  company  in  which  CHP,  CHPLP,  or  any  Indirect Equity Owner
     directly  or indirectly holds an equity interest; and (ii) each corporation
     or  trust  in  which  CHP,  CHPLP, or any Indirect Equity Owner directly or
     indirectly  owns  a  10% or greater equity interest (each such partnership,
     limited  liability  company,  corporation  or  trust  referred to as a "CHP
                                                                             ---
     Entity"),  together  with the Tenant List most recently provided by HT, and
     ------
     that, to the best of its knowledge, none of CHP, CHPLP, any Indirect Equity
     Owner  and  any  CHP  Entity  owns  (directly or constructively through the
     application  of  Section  318  (as modified by Code Section 856(d)(5)) more
     than  a  9.9%  equity interest (as described in Section 856(d)(2)(B) of the
     Code)  in  any  such  entity.

     3.3     No  later  than 20 days after receipt of the Tenant List, CHP shall
provide  the  Tenant List to each CHP Entity and any Indirect Equity Owner.  CHP
agrees  and CHP will cause each CHP Entity and Indirect Equity Owner to agree on
or  prior to the First Closing Date (as defined in the Purchase Agreement), that
they  shall  not acquire an equity interest in any of the entities listed on the
Tenant  List  without  the  consent  of  HT.

4.   MISCELLANEOUS

     4.1     Amendment  and  Modification.  This Agreement may not be amended or
             ----------------------------
modified except by an instrument in writing signed by all of the parties hereto.

     4.2     Specific  Performance.  The parties recognize that in the event the
             ---------------------
other  should refuse to perform under the provisions of this Agreement, monetary
damages  alone  will  not  be

                                        6
<PAGE>
adequate. Accordingly, each shall be entitled, in addition to any other remedies
which  may be available, including money damages, to obtain specific performance
of  the  terms  of  this  Agreement.  In the event of any action to enforce this
Agreement  specifically,  each  party hereby waives the defense that there is an
adequate  remedy  at  law.

     4.3     Parties  in  Interest.  This  Agreement  shall be binding upon and,
             ---------------------
except  as  provided below, inure solely to the benefit of each party hereto and
their successors, assigns and transferees, and nothing in this Agreement, except
as  set  forth  below,  express or implied, is intended to confer upon any other
person  any  rights  or  remedies of any nature whatsoever under or by reason of
this  Agreement.

     4.4     Communications.  All  communications  hereunder shall be in writing
             --------------
and  shall  be  deemed  given  if delivered personally, telecopied, or mailed by
registered  or  certified  mail  (return  receipt requested), or sent by Federal
Express  or  other recognized overnight courier, to the parties at the following
addresses  (or  at  such other address for a party as shall be specified by like
notice):

          (a)  If to CHP or CHPLP, to:
               CNL Hospitality Properties, Inc.
               CNL Center at City Commons
               450 South Orange Avenue
               Orlando, Florida 32801-3336
               Facsimile: 407-650-1085
               Attn: Brian Strickland

               with a copy to:

               Greenberg Traurig, LLP
               The MetLife Building
               200 Park Avenue
               New York, New York 10166
               Facsimile: 212-801-6400
               Attn: Judith Fryer, Esq.
                     Alan S. Gaynor, Esq.

          (b)  If to HT, to:

               Hersha Hospitality Trust
               148 Sheraton Drive
               Box A
               New Cumberland, Pennsylvania 17070
               Facsimile: 717-974-7383
               Attn: Hasu P. Shah

                                        7
<PAGE>
               with a copy to:

               Hunton & Williams
               951 East Byrd Street
               Richmond, Virginia 23219
               Facsimile: 804-788-8218
               Attn: Randall S. Parks, Esq.
                     Cameron N. Cosby, Esq.

Any  of  the  above  addresses  may  be  changed  at any time by notice given as
provided  above;  provided,  however,  that any such notice of change of address
shall  be  effective  only upon receipt.  All communications given in accordance
herewith shall be deemed received on the date of delivery, if hand delivered, on
the  date  of  receipt,  if  telecopied,  three  Business Days after the date of
mailing,  if  mailed  by registered or certified mail, return receipt requested,
and  one  Business  Day after the date of sending, if sent by Federal Express or
other  recognized  overnight  courier.

     4.5     Counterparts.  This  Agreement  may  be  executed  and  delivered
             ------------
(including  by facsimile transmission) in one or more counterparts, all of which
shall  be  considered one and the same agreement and shall become effective when
one  or  more counterparts have been signed by each of the parties and delivered
to  the  other  parties,  it being understood that all parties need not sign the
same  counterpart.

     4.6     Entire Agreement.  This Agreement (which term, for purposes of this
             ----------------
Section,  shall  be  deemed to include the exhibits and schedules hereto and the
other certificates, documents and instruments delivered hereunder) together with
the  Purchase Agreement and other agreements, instruments and documents referred
to  therein,  constitutes  the  entire  agreement  of  the  parties  hereto  and
supersedes  all  prior  agreements,  letters  of intent and understandings, both
written  and  oral, among the parties with respect to the subject matter hereof.

     4.7     Assignment.  Neither  this  Agreement  nor  any  of  the  rights,
             ----------
interests,  or  obligations  hereunder  shall  be assigned by any of the parties
hereto,  whether  by  operation  of  law  or  otherwise.

     4.8     Headings.  The  headings  of  this Agreement are for convenience of
             --------
reference  only  and  are  not  part  of  the  substance  of  this  Agreement.

     4.9     Governing  Law.  This  Agreement  shall  be construed in accordance
             --------------
with  and governed by the internal laws of the State of Maryland (without giving
effect  to  such  State's  conflicts  of  laws  principles).

                                        8
<PAGE>
IN  WITNESS  WHEREOF, the parties hereto have caused this Agreement to be signed
by  its  duly  authorized  officers  as  of  the  date  first  written  above.

                                       HERSHA  HOSPITALITY  TRUST,
                                       a  Maryland real estate investment trust

                                       By:    /s/ Ashish R. Parikh
                                       Name:  Ashish  R.  Parikh
                                       Title: Chief  Financial  Officer

                                       CNL  HOSPITALITY  PARTNERS,  L.P.
                                       By: CNL HOSPITALITY GP CORP., its general
                                           partner

                                       By:    /s/ Tammie A. Quinlan
                                       Name:  Tammie  A.  Quinlan
                                       Title: Senior  Vice  President

                                       CNL  HOSPITALITY  PROPERTIES,  INC.

                                       By:    /s/ Tammie A. Quinlan
                                       Name:  Tammie  A.  Quinlan
                                       Title: Senior  Vice  President

                                        9
<PAGE>
                                   SCHEDULE 1
                                   ----------

HHMLP Hunters Point, LLC
Hersha Hospitality Management, LP
Hersha Hospitality Conduit Management, LP
Noble Investments - Leaseback, LLC
Noble Investments - Leaseback South, LLC
HHMLP JFK III, LLC

<PAGE>
                                    EXHIBIT A
                EXCERPTS FROM ACTION BY UNANIMOUS WRITTEN CONSENT
                            OF THE BOARD OF TRUSTEES
                                       OF
                            HERSHA HOSPITALITY TRUST

The Board of Trustees (the "Board") of Hersha Hospitality Trust, a Maryland real
estate investment trust (the "Trust") hereby adopt and approve, on behalf of the
Trust  in  its  own  capacity  and  as the General Partner of Hersha Hospitality
Limited  Partnership,  a  Virginia  limited  partnership  (the  "Operating
Partnership"), the following resolutions by unanimous written consent in lieu of
a  meeting:

OWNERSHIP  LIMITATION

WHEREAS,  in  accordance  with  Article  VII,  Section  1(G)  of the Articles of
Amendment  and  Restatement  of  the  Trust's  Declaration  of  Trust  (the
"Declaration"),  the  Board, having received the advice of counsel to the effect
that  the restrictions contained in Article VII of the Declaration of Trust will
not  be  violated and the Trust's REIT status will not otherwise be lost and the
representations and undertakings of CNL Hospitality Properties, Inc., a Maryland
corporation  ("CHP")  and  CNL  Hospitality  Partners,  L.P., a Delaware limited
partnership  ("CHP  LP")  required  by  said  Article  VII,  Section 1(G) of the
Declaration  of  Trust  being  contained  in  the Excepted Holder Agreement, has
determined  to  authorize an exemption from the Ownership Limit set forth in the
Declaration,  effective  upon  the  purchase  by CHP of Series A Preferred Units
pursuant  to  the  terms  of  the  Purchase  Agreement;

NOW  THEREFORE,  BE  IT  RESOLVED,  that  any  capitalized  terms  used  in this
resolution that are not otherwise defined shall have the meanings given to those
terms  in  the  Declaration;  and  further

RESOLVED,  that,  the  Board  hereby  exempts  CHP  (the  "Exemption")  from the
Ownership  Limit set forth in the Declaration with respect to the Beneficial and
Constructive  Ownership  (as  determined  pursuant  to  Article  VII  of  the
Declaration)  by  CHP  of  Series  A  Preferred  Shares or Class A Common Shares
issuable  in exchange for the Series A Preferred Units and the JV Units, subject
to  the  terms  and  conditions  described  in  these  resolutions;  and further

RESOLVED,  that  the  Exemption  is  conditioned  on neither CHP Inc. nor CHP LP
Owning,  Beneficially  or  Constructively  more  than  100%  of  the  issued and
outstanding Series A Preferred Shares or 60% of the issued and outstanding Class
A  Common  Shares  at  any  time  (or  such higher percentage as is necessary to
accommodate  the  issuance  of  additional  Class  A  Common  Shares  due  to an
adjustment  of the applicable exchange price or conversion price of the Series A
Preferred Units, Series A Preferred Shares or JV Units); provided, however, that
there  shall  be  no  limit  on  CHP Inc.'s and CHP LP's Beneficial Ownership or
Constructive  Ownership  of Class A Common Shares, subject to CHP's and CHP LP's
compliance  with  the representations, warranties and covenants contained in the
Excepted  Holder  Agreement,  if  (x)  the  Trust  fails  to pay in full for two
consecutive quarters the dividend required pursuant to Section 2 of the Articles
Supplementary,  or  the  Operating  Partnership  fails  to  pay  in full for two
consecutive  quarters  the  distributions with respect to the Series A Preferred
Units  required  by the Second

<PAGE>
Amendment,  or  (y)  the  Trust  fails  to  maintain its status as a real estate
investment  trust  under  the  Internal  Revenue  Code of 1986, as amended, (the
"Code");  and  further

RESOLVED, that the Exemption is further conditioned on (A) no individual Owning,
Beneficially or Constructively, as a result of CHP Inc.'s and CHP LP's ownership
of  the  Series  A Preferred Shares and Class A Common Shares, more than 9.8% of
any  class  or series of the outstanding equity shares of the Trust at any time,
and  (B)  the  representations, warranties, agreements and covenants of CHP Inc.
and  CHP  LP contained in the Excepted Holder Agreement and Standstill Agreement
continuing  to  be  accurate  and  to  be  performed and complied with while the
Exemption  is  in  place;  and  further

RESOLVED,  that  as  a  further  condition to the Exemption, CHP Inc. and CHP LP
shall  execute  and deliver each of the Excepted Holder Agreement and Standstill
Agreement;  and  further

RESOLVED,  that  the  Exemption will be automatically revoked to the extent that
any  of  the  conditions  specified  above  are  breached;  and  further

RESOLVED,  that the Board retains the right to revoke or modify the Exemption in
order to prevent disqualification of the Trust as a real estate investment trust
(a  "REIT")  under the Internal Revenue Code, and the rules, regulations, orders
and  rulings  thereunder;  and  further

RESOLVED,  that the Authorized Officers shall notify CHP Inc. and CHP LP as soon
as  possible  prior  to  any  revocation  or  modification of the Exemption; and
further

RESOLVED,  that  the  Authorized  Officers are authorized and directed to review
periodically  the  level  of  ownership of the Series A Preferred Shares and the
Class  A  Common Shares by CHP Inc. and CHP LP, and their transferees, including
if  necessary,  making  appropriate  inquiries of CHP Inc. and CHP LP, and their
transferees,  and  report to the Board any facts or circumstances as a result of
which  ownership  of  Series A Preferred Shares and Class A Common Shares by CHP
Inc.  and  CHP  LP,  and  their transferees threatens or jeopardizes the Trust's
status  as  a  REIT.

<PAGE>

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