Document:

Exhibit 10.1

    
      

    

     

    Exhibit
      10.1

     

    HERSHA
      HOSPITALITY TRUST

     

    2,000,000
      COMMON SHARES OF BENEFICIAL INTEREST

     

    CONTROLLED
      EQUITY OFFERINGSM

     

    SALES
      AGREEMENT

     

    

     

    April
      5,
      2007

     

     

    CANTOR
      FITZGERALD & CO.

    110
      East
      59th Street

    New
      York,
      NY 10022

    

    Ladies
      and Gentlemen:

    

    HERSHA
      HOSPITALITY TRUST a Maryland real estate investment trust (the “Company”)
      and
      Hersha Hospitality Limited Partnership, a Virginia limited partnership (the
“Operating
      Partnership”) ,
       confirms
      its agreement (this “Agreement”)
      with
      Cantor Fitzgerald & Co. (“CF&Co”),
      as
      follows:

     

    1.   Issuance
      and Sale of Shares.
      The
      Company agrees that, from time to time during the term of this Agreement, on
      the
      terms and subject to the conditions set forth herein, it may issue and sell
      through CF&Co, acting as agent and/or principal, up to 2,000,000 of the
      Company’s common shares of beneficial interest, par value $0.01 per
      share (the
      “Shares”).
      The
      issuance and sale of Shares through CF&Co will be effected pursuant to the
      Registration Statement (as defined below) filed by the Company and declared
      effective by the Securities and Exchange Commission (the “Commission”),
      although nothing in this Agreement shall be construed as requiring the Company
      to use the Registration Statement to issue the Shares. 

     

    The
      Company has filed, in accordance with the provisions of the Securities Act
      of
      1933, as amended, and the rules and regulations thereunder (collectively, the
      “Securities
      Act”),
      with
      the Commission a registration statement on Form S-3 (File No. 333-138038),
      including a base prospectus, relating to certain securities, including the
      Shares to be issued from time to time by the Company, and which incorporates
      by
      reference documents that the Company has filed or will file in accordance with
      the provisions of the Securities Exchange Act of 1934, as amended, and the
      rules
      and regulations thereunder (collectively, the “Exchange
      Act”).
      The
      Company has prepared a prospectus supplement specifically relating to the Shares
      (the “Prospectus
      Supplement”)
      to the
      base prospectus included as part of such registration statement. The Company
      has
      furnished to CF&Co, for use by CF&Co, copies of the prospectus included
      as part of such registration statement, as supplemented by the Prospectus
      Supplement, relating to the Shares. Except where the context otherwise requires,
      such registration statement, as amended when it became effective, including
      all
      documents filed as part thereof or incorporated by reference therein, and
      including any information contained in a Prospectus (as defined below)
      subsequently filed with the Commission pursuant to Rule 424(b) under the
      Securities Act or deemed to be a part of such registration statement pursuant
      to
      Rule 430B of the Securities Act, is herein called the “Registration
      Statement.”
The
      base prospectus, including all documents incorporated therein by reference,
      included in the Registration Statement, as it may be supplemented by the
      Prospectus Supplement, in the form in which such prospectus and/or Prospectus
      Supplement have most recently been filed by the Company with the Commission
      pursuant to Rule 424(b) under the Securities Act, together with any “issuer free
      writing prospectus,” as defined in Rule 433 of the Securities Act Regulations
      (“Rule
      433”),
      relating to the Shares that (i) is required to be filed with the Commission
      by
      the Company or (ii) is exempt from filing pursuant to Rule 433(d)(5)(i), in
      each
      case in the form filed or required to be filed with the Commission or, if not
      required to be filed, in the form retained in the Company’s records pursuant to
      Rule 433(g), is herein called the “Prospectus.”
Any
      reference herein to the Registration Statement, the Prospectus or any amendment
      or supplement thereto shall be deemed to refer to and include the documents
      incorporated by reference therein, and any reference herein to the terms
“amend,” “amendment” or “supplement” with respect to the Registration Statement
      or the Prospectus shall be deemed to refer to and include the filing after
      the
      execution hereof of any document with the Commission deemed to be incorporated
      by reference therein. For purposes of this Agreement, all references to the
      Registration Statement, the Prospectus or to any amendment or supplement thereto
      shall be deemed to include any copy filed with the Commission pursuant to its
      Electronic Data Gathering Analysis and Retrieval System (“EDGAR”).

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    2.   Placements.
      Each
      time that the Company wishes to issue and sell Shares hereunder (each, a
“Placement”),
      it
      will notify CF&Co by email notice (or other method mutually agreed to in
      writing by the parties) containing the parameters in accordance with which
      it
      desires the Shares to be sold, which shall at a minimum include the number
      of
      Shares to be issued (the “Placement
      Shares”),
      the
      time period during which sales are requested to be made, any limitation on
      the
      number of Shares that may be sold in any one day and any minimum price below
      which sales may not be made (a “Placement
      Notice”),
      a
      form of which containing such minimum sales parameters necessary is attached
      hereto as Schedule
      1.
      The
      Placement Notice shall originate from any of the individuals from the Company
      set forth on Schedule
      2 (with
      a
      copy to each of the other individuals from the Company listed on such schedule),
      and shall be addressed to each of the individuals from CF&Co set forth on
Schedule
      2,
      as such
Schedule
      2
      may be
      amended from time to time. The Placement Notice shall be effective upon receipt
      by CF&Co unless and until (i) in accordance with the notice requirements set
      forth in Section
      4,
      CF&Co declines to accept the terms contained therein for any reason, in its
      sole discretion, (ii) the entire amount of the Placement Shares have been sold,
      (iii) in accordance with the notice requirements set forth in Section
      4,
      the
      Company suspends or terminates the Placement Notice, (iv) the Company issues
      a
      subsequent Placement Notice with parameters superseding those on the earlier
      dated Placement Notice, or (iv) the Agreement has been terminated under the
      provisions of Section
      11.
      The
      amount of any discount, commission or other compensation to be paid by the
      Company to CF&Co in connection with the sale of the Placement Shares shall
      be calculated in accordance with the terms set forth in Schedule
      3.
      It is
      expressly acknowledged and agreed that neither the Company nor CF&Co will
      have any obligation whatsoever with respect to a Placement or any Placement
      Shares unless and until the Company delivers a Placement Notice to CF&Co and
      CF&Co does not decline such Placement Notice pursuant to the terms set forth
      above, and then only upon the terms specified therein and herein. In the event
      of a conflict between the terms of this Agreement and the terms of a Placement
      Notice, the terms of the Placement Notice will control.

     

    3.   Sale
      of Placement Shares by CF&Co.
      Subject
      to the terms and conditions herein set forth, upon the Company’s issuance of a
      Placement Notice, and unless the sale of the Placement Shares described therein
      has been declined, suspended, or otherwise terminated in accordance with the
      terms of this Agreement, CF&Co, for the period specified in the Placement
      Notice, will use its commercially reasonable efforts consistent with its normal
      trading and sales practices to sell such Placement Shares up to the amount
      specified, and otherwise in accordance with the terms of such Placement Notice.
      CF&Co will provide written confirmation to the Company no later than the
      opening of the Trading Day (as defined below) immediately following the Trading
      Day on which it has made sales of Placement Shares hereunder setting forth
      the
      number of Placement Shares sold on such day, the compensation payable by the
      Company to CF&Co pursuant to Section
      2
      with
      respect to such sales, and the Net Proceeds (as defined below) payable to the
      Company, with an itemization of the deductions made by CF&Co (as set forth
      in Section
      5(a))
      from
      the gross proceeds that it receives from such sales. After consultation to
      the
      Company and subject to the terms of the Placement Notice, CF&Co may sell
      Placement Shares by any method permitted by law deemed to be an “at the market”
offering as defined in Rule 415 of the Securities Act, including without
      limitation sales made directly on the American Stock Exchange (the
      “Exchange”),
      on
      any other existing trading market for the Shares or to or through a market
      maker. After consultation with the Company and subject to the terms of the
      Placement Notice, CF&Co may also sell Placement Shares in privately
      negotiated transactions. The Company acknowledges and agrees that (i) there
      can
      be no assurance that CF&Co will be successful in selling Placement Shares,
      and (ii) CF&Co will incur no liability or obligation to the Company or any
      other person or entity if it does not sell Placement Shares for any reason
      other
      than a failure by CF&Co to use its commercially reasonable efforts
      consistent with its normal trading and sales practices to sell such Placement
      Shares as required under this Section
      3.
      For the
      purposes hereof, “Trading
      Day”
means
      any day on which the Company’s common shares of beneficial interest are
      purchased and sold on the principal market on which the common shares of
      beneficial interest are listed or quoted.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    4.   Suspension
      of Sales.
      The
      Company or CF&Co may, upon notice (the “Suspension
      Notice”)
      to the
      other party in writing (including by email correspondence to each of the
      individuals of the other Party set forth on Schedule
      2,
      if
      receipt of such correspondence is actually acknowledged by any of the
      individuals to whom the notice is sent, other than via auto-reply) or by
      telephone (confirmed immediately by verifiable facsimile transmission or email
      correspondence to each of the individuals of the other Party set forth on
Schedule
      2),
      suspend any sale of Placement Shares; provided,
      however,
      that
      such suspension shall not affect or impair either party’s obligations with
      respect to any Placement Shares sold hereunder prior to the receipt of such
      notice. Each of the Parties agrees that no such notice under this Section
      4
      shall be
      effective against the other unless it is made to one of the individuals named
      on
Schedule
      2
      hereto,
      as such Schedule may be amended from time to time.

     

    5.   Settlement.

     

    (a)       
       Settlement
      of Placement Shares.
      Unless
      otherwise specified in the applicable Placement Notice, settlement for sales
      of
      Placement Shares will occur on the third (3rd)
      Trading
      Day (or such earlier day as is industry practice for regular-way trading)
      following the date on which such sales are made (each, a “Settlement
      Date”).
      The
      amount of proceeds to be delivered to the Company on a Settlement Date against
      receipt of the Placement Shares sold (the “Net
      Proceeds”)
      will
      be equal to the aggregate sales price received by CF&Co at which such
      Placement Shares were sold, after deduction for (i) CF&Co’s commission,
      discount or other compensation for such sales payable by the Company pursuant
      to
Section
      2
      hereof,
      (ii) any other amounts due and payable by the Company to CF&Co hereunder
      pursuant to Section
      7(h)
      (Expenses) hereof, and (iii) any transaction fees imposed by any governmental
      or
      self-regulatory organization in respect of such sales. 

     

    (b)        
      Delivery
      of Placement Shares.
      On or
      before each Settlement Date, the Company will, or will cause its transfer agent
      to, electronically transfer the Placement Shares being sold by crediting
      CF&Co’s or its designee’s account (provided CF&Co
      shall
      have given the Company written notice of such designee prior to the Settlement
      Date) at The Depository Trust Company through its Deposit and Withdrawal at
      Custodian System or by such other means of delivery as may be mutually agreed
      upon by the parties hereto which in all cases shall be freely tradeable,
      transferable, registered shares in good deliverable form. On each Settlement
      Date, CF&Co will deliver the related Net Proceeds in same day funds to an
      account designated by the Company on, or prior to, the Settlement Date. The
      Company agrees that if the Company, or its transfer agent (if applicable),
      defaults in its obligation to deliver Placement Shares on a Settlement Date,
      the
      Company agrees that in addition to and in no way limiting the rights and
      obligations set forth in Section
      9(a)
      (Indemnification and Contribution) hereto, it will (i) hold CF&Co
      harmless against any loss, claim, damage, or expense (including reasonable
      legal
      fees and expenses), as incurred, arising out of or in connection with such
      default by the Company and (ii) pay to CF&Co any commission, discount, or
      other compensation to which it would otherwise have been entitled absent such
      default.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    6.   Representations
      and Warranties of the Company and the Operating Partnership.
      The
      Company and Hersha Hospitality Limited Partnership, a Virginia limited
      partnership (the “Operating
      Partnership”), jointly
      and severally represent and warrant to, and agree with, CF&Co that as of the
      date of this Agreement and as of each Representation Date (as defined in
Section
      7(n)
      below)
      on which a certificate is required to be delivered pursuant to Section
      7(n)
      of this
      Agreement and as of each Applicable Time, as the case may be:

     

    (a)         The
      Company satisfies all of the requirements of the Securities Act for use of
      Form
      S-3 for the offering of the Shares contemplated hereby. 

     

    (b)        
      The
      Registration Statement has been filed with the Commission and has been declared
      effective under the Securities Act. No stop order suspending the effectiveness
      of the Registration Statement has been issued under the Securities Act and
      no
      proceedings for that purpose have been instituted or are pending or, to the
      knowledge of the Company, are contemplated by the Commission, and any request
      on
      the part of the Commission for additional information has been complied
      with.

     

    (c)         
      Intentionally
      omitted. 

     

    (d)       
      The
      Company has delivered to CF&Co one complete copy of the Registration
      Statement and a copy of each consent and certificate of experts filed as a
      part
      thereof, and conformed copies of the Registration Statement (without exhibits)
      and the Prospectus, as amended or supplemented, in such quantities and at such
      places as CF&Co has reasonably requested. The Prospectus delivered to
      CF&Co for use in connection with the offering of Shares will, at the time of
      such delivery, be identical to the electronically transmitted copies thereof
      filed with the Commission pursuant to EDGAR, except to the extent permitted
      by
      Regulation S-T.

     

    (e)        
      At
      the
      respective times the Registration Statement and each amendment thereto became
      effective, at each deemed effective date with respect to CF&Co pursuant to
      Rule 430B(f)(2) of the Securities Act, as the case may be, the Registration
      Statement complied and will comply in all material respects with the
      requirements of the Securities Act, and did not and will not contain an untrue
      statement of a material fact or omit to state a material fact required to be
      stated therein or necessary to make the statements therein not misleading.
      The
      preceding sentence does not apply to statements in or omissions from the
      Registration Statement or any amendment thereto in reliance upon and in
      conformity with written information relating to CF&Co furnished to the
      Company in writing by CF&Co expressly for use therein, it being understood
      and agreed that the only such information furnished by CF&Co consists of the
      information described as such in Schedule
      4
      hereto.

     

    (f)        
      Neither
      the Prospectus nor any amendments or supplements thereto, at the time the
      Prospectus or any such amendment or supplement was issued, as of the date
      hereof, each Applicable Time, and at each Representation Date, as the case
      may
      be, included or will include an untrue statement of a material fact or omitted
      or will omit to state a material fact necessary in order to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading. The preceding sentence does not apply to statements in or omissions
      from the Prospectus, as amended or supplemented, in reliance upon and in
      conformity with written information relating to CF&Co furnished to the
      Company in writing by CF&Co expressly for use therein, it being understood
      and agreed that the only such information furnished by CF&Co consists of the
      information described as such in Schedule
      4
      hereto.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (g)        
      Each
      document incorporated by reference in the Registration Statement or the
      Prospectus heretofore filed, when it was filed (or, if any amendment with
      respect to any such document was filed, when such amendment was filed),
      conformed in all material respects with the requirements of the Exchange Act
      and
      the rules and regulations thereunder, and any further documents so filed and
      incorporated after the date of this Agreement will, when they are filed, conform
      in all material respects with the requirements of the Exchange Act and the
      rules
      and regulations thereunder; no such document when it was filed (or, if an
      amendment with respect to any such document was filed, when such amendment
      was
      filed), contained an untrue statement of a material fact or omitted to state
      a
      material fact required to be stated therein or necessary in order to make the
      statements therein not misleading; and no such document, when it is filed,
      will
      contain an untrue statement of a material fact or will omit to state a material
      fact required to be stated therein or necessary in order to make the statements
      therein not misleading.

     

    (h)        
      Each
      issuer free writing prospectus (as defined in Rule 433), as of its issue date
      and at all subsequent times through the completion of the public offer and
      sale
      of the Shares or until any earlier date that the Company notifies CF&Co in
      writing, did not, does not and will not include any information that conflicted,
      conflicts or will conflict with the information contained in the Registration
      Statement or the Prospectus, including any incorporated document deemed to
      be a
      part thereof that has not been superseded or modified. The foregoing sentence
      does not apply to statements in or omissions from any issuer free writing
      prospectus based upon and in conformity with written information furnished
      to
      the Company by CF&Co specifically for use therein, it being understood and
      agreed that the only such information furnished by CF&Co consists of the
      information described as such in Schedule
      4
      hereto.

     

    (i)         
      All
      of
      the issued and outstanding shares of capital stock of the Company have been
      duly
      authorized and validly issued, are fully paid and nonassessable and have been
      issued in compliance with applicable federal and state securities laws. None
      of
      the Company’s outstanding common shares or preferred stock were issued in
      violation of any preemptive rights, rights of first refusal or other similar
      rights; except as set forth in the Prospectus, the Company is not a party to
      or
      bound by any outstanding options, warrants or similar rights to subscribe for,
      or contractual obligations to issue, sell, transfer or acquire, any of its
      capital stock or any securities convertible into or exchangeable for any of
      such
      capital stock; the Shares to be issued and sold by the Company hereunder have
      been duly authorized and, when issued and delivered against full payment
      therefor in accordance with the terms hereof will be validly issued, fully
      paid
      and nonassessable and free of any preemptive rights, rights of first refusal
      or
      other or similar rights; the capital stock (including the Shares) of the Company
      conforms to the description thereof contained in the Prospectus; and the
      delivery of the Shares being sold by the Company against payment therefor
      pursuant to the terms of this Agreement will pass valid title to the Shares
      being sold by the Company, free and clear of any claim, encumbrance or defect
      in
      title, and without notice of any lien, claim or encumbrance. The certificates
      used by the Company to evidence the common shares or the preferred stock are
      in
      valid and sufficient form.

     

    (j)         
      Immediately
      after the transactions contemplated by this Agreement, all of the issued and
      outstanding Common Units and Preferred Units (as defined below) will be validly
      issued, fully paid and nonassessable. Immediately after the transactions
      contemplated by this Agreement, none of the outstanding common units of limited
      partnership interest in the Operating Partnership (“Common
      Units”)
      or
      preferred units of limited partnership interest in the Operating Partnership
      (“Preferred
      Units”)
      has
      been issued in violation of any preemptive right, right of first refusal or
      other similar right; and the outstanding Common Units and Preferred Units have
      been offered, sold and issued by the Operating Partnership in compliance with
      applicable federal and state securities laws.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (k)        
      Each
      of
      the Company and its subsidiaries is duly organized and validly existing in
      good
      standing under the laws of the state of its incorporation or organization with
      full corporate, partnership or entity power and authority, as the case may
      be,
      to own, lease and operate its properties and to conduct its business as
      presently conducted and as described in the Prospectus and is duly registered
      and qualified to conduct its business and is in good standing in each
      jurisdiction or place where the nature of its properties or the conduct of
      its
      business requires such registration or qualification, except where the failure
      to so register or qualify has not had or will not have a material adverse effect
      on the condition (financial or other), business, properties, results of
      operations or prospects of the Company and its subsidiaries, taken as a whole
      (a
“Material
      Adverse Effect”).
      

     

    (l)        
      The
      outstanding equity interests of each of the Company's subsidiaries have been
      duly authorized and validly issued, are fully paid and nonassessable and are
      owned by the Company, directly or through subsidiaries, free and clear of any
      security interests, liens, encumbrances, equities or claims. The Company does
      not have any subsidiaries and does not own a material interest in or control,
      directly or indirectly, any other corporation, partnership, joint venture,
      association, trust or other business organization, except as set forth in
      Exhibit 21 to the Company's most recent Annual Report on Form 10-K incorporated
      by reference into the Registration Statement, other than HT/PRA Glastonbury,
      LLC
      and those subsidiaries formed, or in which the Company has acquired a direct
      or
      indirect ownership interest, subsequent to the filing of the Company’s most
      recent Annual Report on Form 10-K. As used in this Agreement, subsidiaries
      shall
      mean direct and indirect subsidiaries of the Company.

     

    (m)      
       Except
      as
      described in the Prospectus, there is no action, suit, inquiry, proceeding
      or
      investigation by or before any court or governmental or other regulatory or
      administrative agency or commission pending or, to the best knowledge of the
      Company, threatened, against or involving the Company or its subsidiaries,
      which
      might individually or in the aggregate prevent or adversely affect the
      transactions contemplated by this Agreement or result in a Material Adverse
      Effect, nor to the Company's knowledge, is there any basis for any such action,
      suit, inquiry, proceeding or investigation. There are no agreements, contracts,
      indentures, leases or other instruments that are required to be described in
      the
      Prospectus or to be filed as an exhibit to the Registration Statement that
      are
      not described, filed or incorporated by reference in the Registration Statement
      and the Prospectus as required by the Securities Act. All such contracts to
      which the Company or any of its subsidiaries is a party have been duly
      authorized, executed and delivered by the Company or the applicable subsidiary,
      constitute valid and binding agreements of the Company or the applicable
      subsidiary and are enforceable against the Company or the applicable subsidiary
      in accordance with the terms thereof, except as enforceability thereof may
      be
      limited by (i) the application of bankruptcy, reorganization, insolvency and
      other laws affecting creditors' rights generally and (ii) equitable principles
      being applied at the discretion of a court before which any proceeding may
      be
      brought. Neither the Company nor the applicable subsidiary has received notice
      or been made aware that any other party is in breach of or default to the
      Company or its subsidiaries under any of such contracts.

     

    (n)        
      Neither
      the Company nor any of its subsidiaries is (i) in violation of (A) its
      Organizational Documents, (B) to the Company's knowledge any law, ordinance,
      administrative or governmental rule or regulation applicable to the Company
      or
      any of its subsidiaries, the violation of which would have a Material Adverse
      Effect or (C) any decree of any court or governmental agency or body having
      jurisdiction over the Company or any of its subsidiaries; or (ii) in default
      in
      any material respect in the performance of any obligation, agreement or
      condition contained in (A) any bond, debenture, note or any other evidence
      of
      indebtedness or (B) any agreement, indenture, lease or other instrument (each
      of
      (A) and (B), an “Existing
      Instrument”)
      to
      which the Company or any of its subsidiaries is a party or by which any of
      their
      properties may be bound, which default would have a Material Adverse Effect;
      and
      to the Company’s knowledge, there does not exist any state of facts that
      constitutes a default or an event of default on the part of the Company or
      any
      of its subsidiaries as defined in such documents or that, with notice or lapse
      of time or both, would constitute such a default or event of default which
      would
      have a Material Adverse Effect.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (o)        
      The
      Company and the Operating Partnership have full legal right, power and authority
      to enter into and perform this Agreement and to consummate the transactions
      contemplated herein, including the issuance, sale and delivery of the Shares
      as
      provided herein and the Operating Partnership’s issuance of the Common Units to
      the Company. The Company's and the Operating Partnership's execution and
      delivery of this Agreement and the performance by the Company and the Operating
      Partnership of their obligations under this Agreement have been duly and validly
      authorized by the Company and the Operating Partnership and this Agreement
      has
      been duly executed and delivered by the Company and the Operating Partnership,
      and constitutes a valid and legally binding agreement of the Company and the
      Operating Partnership, enforceable against the Company and the Operating
      Partnership in accordance with its terms, except to the extent enforceability
      may be limited by (i) the application of bankruptcy, reorganization, insolvency
      and other laws affecting creditors' rights generally and (ii) equitable
      principles being applied at the discretion of a court before which any
      proceeding may be brought, and except as rights to indemnity and contribution
      hereunder may be limited by federal or state securities laws.

     

    (p)        
      The
      Amended and Restated Agreement of Limited Partnership of the Operating
      Partnership, including all amendments thereto (the “Partnership
      Agreement”),
      has
      been duly and validly authorized, executed and delivered by the general partner
      of the Operating Partnership and constitutes a valid and binding agreement
      of
      the general partner, enforceable in accordance with its terms, except to the
      extent that enforceability may be limited by bankruptcy, insolvency,
      reorganization or other laws of general applicability relating to or affecting
      creditors' rights or by general equity principles.

     

    (q)        
      No
      consent, approval, authorization, order, license, certificate, permit,
      registration, designation or filing by or with any governmental agency or body
      is required for the execution, delivery and performance by the Company and
      the
      Operating Partnership of their respective obligations under this Agreement
      and
      the consummation by the Company and the Operating Partnership of the
      transactions contemplated hereby, including the valid authorization, issuance,
      sale and delivery of the Shares, except such as may be required by (i) the
      Exchange, (ii) the securities or Blue Sky laws of the various states in
      connection with the offer and sale of the Shares or (iii) the Company’s
      Organizational Documents, all of which will be, or have been effected, in
      accordance with this Agreement.

     

    (r)         
      Neither
      the issuance and sale of the Shares by the Company, the execution, delivery
      or
      performance of this Agreement by the Company and the Operating Partnership
      nor
      the consummation by the Company and the Operating Partnership of the
      transactions contemplated hereby (i) conflicts with or will conflict with or
      constitutes or will constitute a breach of, or a default under, the Company's
      charter or bylaws, the Operating Partnership's certificate of limited
      partnership or the Partnership Agreement, or any Existing Instrument to which
      the Company or any of its subsidiaries is a party or by which any of its or
      their properties may be bound, (iii) violates any statute, law, regulation,
      ruling, filing, judgment, injunction, order or decree applicable to the Company
      or any of its subsidiaries or any of their properties, or (iv) results in a
      breach of, or default or Debt Repayment Triggering Event (as defined below)
      under, or results in the creation or imposition of any lien, charge or
      encumbrance upon any property or assets of the Company or any of its
      subsidiaries pursuant to, or requires the consent of any other party to, any
      Existing Instrument, except for such conflicts, breaches, defaults, liens,
      charges or encumbrances that will not, individually or in the aggregate, result
      in a Material Adverse Effect. As used herein, a “Debt
      Repayment Triggering Event”
means
      any event or condition that gives, or with the giving of notice or lapse of
      time
      would give, the holder of any note, debenture or other evidence of indebtedness
      (or any person acting on such holder's behalf) the right to require the
      repurchase, redemption or repayment of all or a portion of such indebtedness
      by
      the Company or any of its subsidiaries.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (s)        
      Other
      than owners of Common Units by persons other than the Company, no holder of
      any
      securities of the Company has rights to the registration of any securities
      of
      the Company or other similar rights as a result of or in connection with the
      filing of the Registration Statement or the consummation of the transactions
      contemplated hereby that have not been satisfied or heretofore waived in
      writing. No person or entity has a right of participation or first refusal
      with
      respect to the sale of the Shares by the Company.

     

    (t)         
      KPMG
      LLP
      has audited the financial statements (including the related notes thereto and
      supporting schedules) incorporated by reference in the Registration Statement
      and the Prospectus, are and were, during the periods covered by their reports
      incorporated by reference in the Registration Statement and the Prospectus,
      independent registered public accountants as required by the Securities Act,
      the
      Exchange Act and the Public Company Accounting Oversight Board (“PCAOB”).

     

    (u)        
      The
      financial statements, together with related schedules and notes, included or
      incorporated by reference in the Registration Statement and the Prospectus,
      present fairly the financial condition, results of operations, cash flows and
      changes in financial position of the Company on the basis stated in the
      Registration Statement at the respective dates or for the respective periods
      to
      which they apply; such statements and related schedules and notes have been
      prepared in accordance with generally accepted accounting principles
      consistently applied throughout the periods involved, except as disclosed
      therein; and the other financial and statistical information and data set forth
      in the Registration Statement and Prospectus is accurately presented and
      prepared on a basis consistent with such financial statements and the books
      and
      records of the Company. No other financial statements or schedules are required
      by Form S-3 or otherwise to be included in the Registration Statement or the
      Prospectus. 

     

    (v)        
      Except
      as
      disclosed in the Registration Statement and the Prospectus, subsequent to the
      respective dates as of which such information is given in the Registration
      Statement and the Prospectus, (i) neither the Company nor any of its
      subsidiaries has incurred any material liabilities or obligations, indirect,
      direct or contingent, or entered into any transaction that is not in the
      ordinary course of business, (ii) neither the Company nor any of its
      subsidiaries has sustained any material loss or interference with its business
      or properties from fire, flood, windstorm, accident or other calamity, whether
      or not covered by insurance, (iii) except for the normal quarterly dividend
      on
      the common shares of beneficial interest and preferred shares of the Company,
      neither the Company nor any of its subsidiaries has paid or declared any
      dividends or other distributions with respect to its capital stock and the
      Company is not in default under the terms of any class of capital stock of
      the
      Company or any outstanding debt obligations, (iv) there has not been any change
      in the authorized or outstanding capital stock of the Company or any material
      change in the indebtedness of the Company (other than in the ordinary course
      of
      business) and (v) there has not been any material adverse change, or any
      development involving or that may reasonably be expected to result in a Material
      Adverse Effect.

     

    (w)       
      The
      Shares to be sold under this Agreement have been approved for trading and
      listing on the Exchange and are registered pursuant to Section 12(b) of the
      Exchange Act, and the Company has taken no action designed to, or likely to
      have
      the effect of, terminating the registration of the Shares under the Exchange
      Act
      or delisting any such securities from the Exchange, nor has the Company received
      any notification that the Commission or the Exchange is contemplating
      terminating such registration or listing. 

     

    (x)         
      The
      Company has not distributed and will not distribute any offering material in
      connection with the offering and sale of the Shares to be sold hereunder by
      CF&Co as principal or agent for the Company, other than the Prospectus and
      the Registration Statement.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (y)        
      Other
      than excepted activity pursuant to Regulation M under the Exchange Act, the
      Company has not taken and will not take, directly or indirectly, any action
      that
      constituted, or any action designed to, or that might reasonably be expected
      to
      cause or result in or constitute stabilization or manipulation of the price
      of
      any security of the Company to facilitate the sale or resale of the Shares
      or
      for any other purpose.

     

    (z)         
      The
      Company and each of its subsidiaries have filed all tax returns required to
      be
      filed (other than certain state or local tax returns, as to which the failure
      to
      file, individually or in the aggregate, would not have a Material Adverse
      Effect), which returns are complete and correct in all material respects, and
      neither the Company nor any subsidiary is in default in the payment of any
      taxes
      that were payable pursuant to said returns or any assessments with respect
      thereto. Except as disclosed in the Prospectus (as amended or supplemented),
      all
      deficiencies asserted as a result of any federal, state, local or foreign tax
      audits have been paid or finally settled and no issue has been raised in any
      such audit that, by application of the same or similar principles, reasonably
      could be expected to result in a proposed deficiency for any other period not
      so
      audited. There are no outstanding agreements or waivers extending the statutory
      period of limitation applicable to any federal, state, local or foreign tax
      return for any period. On each Settlement Date, all stock transfer and other
      taxes that are required to be paid in connection with the sale of the Shares
      will have been fully paid by the Company and all laws imposing such taxes will
      have been complied with.

     

    (aa)      
      Except
      as
      set forth in the Prospectus (as amended or supplemented), there are no
      transactions with “affiliates” (as defined in Rule 405 promulgated under the
      Securities Act) or any officer, director or security holder of the Company
      (whether or not an affiliate) that are required by the Securities Act to be
      disclosed in the Prospectus that have not been disclosed as required.
      Additionally, no relationship, direct or indirect, exists between the Company
      or
      any of its subsidiaries on the one hand, and the directors, officers,
      stockholders, customers or suppliers of the Company or any subsidiary on the
      other hand that is required by the Securities Act to be disclosed in the
      Prospectus that is not so disclosed.

     

    (bb)     
      None
      of
      the Company nor any of its subsidiaries is an “investment company”, a company
“controlled” by an “investment company” or an “affiliated person” of, or
“promoter” or “principal underwriter” for, an investment company within the
      meaning of the Investment Company Act of 1940, as amended.

     

    (cc)      
      Each
      of
      the Company and its subsidiaries has good and valid title to all property (real
      and personal) described in the Prospectus as being owned by it, free and clear
      of all liens, claims, security interests or other encumbrances except (i) such
      as are described in the Prospectus or (ii) such as are not materially burdensome
      and do not have or will not materially adversely affect the Company's or
      subsidiaries' use of the property or the conduct of the business of the Company.
      All property (real and personal) leased by the Company and its subsidiaries
      is
      held under valid, subsisting and enforceable leases with only such exceptions
      as
      in the aggregate are not materially burdensome and do not or will not adversely
      affect the use of the property or the conduct of the business of the
      Company.

     

    (dd)      The
      Company and its subsidiaries have all permits, licenses, franchises, approvals,
      consents and authorizations of governmental or regulatory authorities
      (hereinafter “permit” or “permits”) as are necessary to own their properties and
      to conduct their business in the manner described in the Prospectus, subject
      to
      such qualifications as may be set forth in the Prospectus, except where the
      failure to have obtained any such permit has not had and will not have a
      Material Adverse Effect; each of the Company and its subsidiaries has operated
      and is operating its business in material compliance with all of its obligations
      with respect to each such permit and no event has occurred that allows, or
      after
      notice or lapse of time would allow, revocation or termination of any such
      permit and except where such revocation or termination would not have a Material
      Adverse Effect or result in any other material impairment of the rights of
      any
      such permit, subject in each case to such qualification as may be set forth
      in
      the Prospectus; and, except as described in the Prospectus, such permits contain
      no restrictions that are materially burdensome to the Company or any of its
      subsidiaries.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (ee)     
      The
      Company has established, maintains and evaluates disclosure controls and
      procedures (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange
      Act) and “internal control over financial reporting” (as such term is defined in
      Rule 13a-15 and 15d-15 under the Exchange Act) in accordance with such rules
      and
      any related rules of the Commission or the Exchange; such disclosure controls
      and procedures are designed to ensure that material information relating to
      the
      Company, including its consolidated subsidiaries, is made known to the Company’s
      Chief Executive Officer and its Chief Financial Officer by others within those
      entities, and except as disclosed in the Company’s Annual Report on Form 10-K
      for the year ended December 31, 2006, as amended, such disclosure controls
      and
      procedures are effective to perform the functions for which they were
      established.

     

    (ff)        Except
      as
      disclosed in the Prospectus or any Permitted Free Writing Prospectuses, the
      Company and its subsidiaries maintains a system of internal accounting controls
      sufficient to provide reasonable assurance that (i) transactions are
      executed in accordance with management’s general or specific authorization;
      (ii) transactions are recorded as necessary to permit preparation of
      financial statements in conformity with generally accepted accounting principles
      and to maintain accountability for assets; (iii) access to assets is
      permitted only in accordance with management’s general or specific
      authorization; and (iv) the recorded accountability for assets is compared
      with existing assets at reasonable intervals and appropriate action is taken
      with respect to any differences; and, to the Company’s and the Operating
      Partnership’s knowledge, neither the Company, the Operating Partnership nor any
      subsidiary, employee or agent thereof, has made any payment of funds of the
      Company, the Operating Partnership or any of the subsidiaries, as the case
      may
      be, or received or retained any funds, and no funds of the Company, the
      Operating Partnership or any of the subsidiaries, as the case may be, have
      been
      set aside to be used for any payment, in each case in violation of any law,
      rule
      or regulation.

     

    (gg)      
      Based
      on
      evaluations of its internal controls over financial reporting, the Company
      is
      not aware of (i) any material weakness in the design or operation of internal
      control over financial reporting which are reasonably likely to adversely affect
      the Company's ability to record, process, summarize and report financial
      information; or (ii) any fraud, whether or not material, that involves
      management or other employees who have a significant role in the Company's
      internal control over financial reporting.

     

    (hh)       Neither
      the Company nor any of its subsidiaries, since each has been a subsidiary of
      the
      Company, nor, to the Company's knowledge, any employee or agent of the Company
      or any of its subsidiaries, has, directly or indirectly, (i) made any unlawful
      contribution to any candidate for political office, or failed to disclose fully
      any contribution in violation of law or (ii) made any payment to any federal,
      state, local or foreign governmental official, or other person charged with
      similar public or quasi-public duties, other than payments required or permitted
      by the laws of the United States or any jurisdiction thereof or applicable
      foreign jurisdictions.

     

    (ii)        
      The
      Company and its subsidiaries are (i) in compliance with any and all applicable
      federal, state, local and foreign laws and regulations relating to the
      protection of human health and safety, the environment or hazardous or toxic
      substances or wastes, pollutants or contaminants (“Environmental
      Laws”),
      (ii)
      have received all permits, licenses or other approvals required of them under
      applicable Environmental Laws to conduct their respective businesses and (iii)
      are in compliance with all terms and conditions of any such permit, license
      or
      approval, except in each case as would not, individually or in the aggregate,
      have a Material Adverse Effect. Neither the Company nor any of its subsidiaries
      has been named as a “potentially responsible party” under the Comprehensive
      Environmental Response Compensation and Liability Act of 1980, as amended.
      Neither the Company nor any of its subsidiaries owns, leases or occupies any
      property that appears on any list of hazardous sites compiled by any state
      or
      local governmental agency.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (jj)        
      There
      are
      no costs or liabilities associated with Environmental Laws (including, without
      limitation, any capital or operating expenditures required for clean-up, closure
      of properties or compliance with Environmental Laws or any permit, license
      or
      approval, any related constraints on operating activities and any potential
      liabilities to third parties) which would, singly or in the aggregate, have
      a
      Material Adverse Effect.

     

    (kk)      
      The
      Company has been organized and has operated in conformity with the requirements
      for qualification and taxation as a real estate investment trust under the
      Internal Revenue Code of 1986, as amended (the “Code”)
      for its
      taxable years ended December 31, 1999 through December 31, 2006, and the
      Company's current and proposed method of operation will enable it to continue
      to
      meet the requirements for taxation as a real estate investment trust under
      the
      Code for its taxable year ending December 31, 2007 and in the future. The
      subsidiaries of the Company that are partnerships have been and will continue
      to
      be treated as partnerships for federal income tax purposes and not as
      corporations, associations taxable as corporations or as publicly traded
      partnerships.

     

    (ll)         
      Intentionally
      Omitted.

     

    (mm)    
      The
      Company and its subsidiaries own and have full right, title and interest in
      and
      to, or has valid licenses to use, each material trade name, trademark, service
      mark, patent, copyright, approval, trade secret and other similar rights
      (collectively “Intellectual
      Property”)
      under
      which the Company and its subsidiaries conduct all or any material part of
      their
      business, and none of the Company and its subsidiaries has created any lien
      or
      encumbrance on, or granted any right or license with respect to, any such
      Intellectual Property except where the failure to own or obtain a license or
      right to use any such Intellectual Property has not and will not have a Material
      Adverse Effect; there is no claim pending against the Company or any of its
      subsidiaries with respect to any Intellectual Property, and none of the Company
      and its subsidiaries has received notice or otherwise become aware that any
      Intellectual Property that it uses or has used in the conduct of its business
      infringes upon or conflicts with the rights of any third party. Neither the
      Company nor any of its subsidiaries has become aware that any material
      Intellectual Property that it uses or has used in the conduct of its business
      infringes upon or conflicts with the rights of any third party.

     

    (nn)      
      No
      officer, director or nominee for director of the Company has a direct or
      indirect affiliation or association with any member of the NASD.

     

    (oo)      
      The
      Company and its subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are prudent
      and customary in the businesses in which they are engaged; and neither the
      Company nor any of its subsidiaries has reason to believe that it will not
      be
      able to renew its existing insurance coverage as and when such coverage expires
      or to obtain similar coverage from similar insurers as may be necessary to
      continue its business at a comparable cost.

     

    (pp)     
      Title
      insurance in favor of the Company, the Operating Partnership and the
      subsidiaries has been obtained with respect to each property owned by any such
      entity in an amount at least equal to (A) the cost of acquisition of such
      property or (B) the cost of construction of such property (measured at the
      time of such construction), except where the failure to maintain such title
      insurance would not have a Material Adverse Effect.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (qq)      
      In
      the
      ordinary course of its business, the Company conducts a periodic review of
      the
      effect of Environmental Laws on the business, operations and properties of
      the
      Company and its subsidiaries, in the course of which it identifies and evaluates
      associated costs and liabilities (including any capital or operating
      expenditures required for clean-up, closure of properties or compliance with
      Environmental Laws or any permit, license or approval, any related constraints
      on operating activities and any potential liabilities to third parties). On
      the
      basis of such review and amount of its established reserves, the Company has
      reasonably concluded that such associated costs and liabilities would not,
      individually or in the aggregate, result in a Material Adverse
      Effect.

     

    (rr)        
      Except
      for matters which would not, individually or in the aggregate, have a Material
      Adverse Effect, (i) neither the Company, the Partnership nor any of the
      subsidiaries is engaged in any unfair labor practice; (ii) there is
      (A) no unfair labor practice complaint pending or, to the Company’s or the
      Partnership’s knowledge after due inquiry, threatened against the Company, the
      Partnership or any of the subsidiaries before the National Labor Relations
      Board, and no grievance or arbitration proceeding arising out of or under
      collective bargaining agreements is pending or threatened, (B) no strike,
      labor dispute, slowdown or stoppage pending or, to the Company’s or the
      Partnership’s knowledge after due inquiry, threatened against the Company, the
      Partnership or any of the subsidiaries and (C) no union representation
      dispute currently existing concerning the employees of the Company, the
      Partnership, HHMLP or any of the subsidiaries, and (iii) to the Company’s
      knowledge after due inquiry, (A) no union organizing activities are
      currently taking place concerning the employees of the Company, the Partnership,
      or any of the subsidiaries and (B) there has been no violation of any
      federal, state, local or foreign law relating to discrimination in the hiring,
      promotion or pay of employees, any applicable wage or hour laws or any provision
      of the Employee Retirement Income Security Act of 1974 (“ERISA”)
      or the
      rules and regulations promulgated thereunder concerning the employees of the
      Company, the Partnership, HHMLP or any of the Subsidiaries;

     

    (ss)      
      The
      Company and its subsidiaries have complied and will comply in all material
      respects with wage and hour determinations issued by the U.S. Department of
      Labor under the Service Contract Act of 1965 and the Fair Labor Standards Act
      in
      paying its employees' salaries, fringe benefits and other compensation for
      the
      performance of work or other duties in connection with contracts with the U.S.
      government, and have complied and will comply in all material respects with
      the
      requirements of the Americans with Disabilities Act of 1990, the Family and
      Medical Leave Act of 1993, the Civil Rights Act of 1964 (Title VII), the
      National Labor Relations Act, the Vietnam Era Veteran's Readjustment Act, the
      Age Discrimination in Employment Act, as amended by the Older Workers' Benefit
      Protection Act, and federal, state and local labor laws, each as amended except
      where the failure to comply with any such requirements has not, and will not,
      have a Material Adverse Effect.

     

    (tt)        
      Except
      with respect to non-timely filings of reports pursuant to Section 16(a) of
      the
      Exchange Act by certain of the Company's officers as described in the Company's
      Definitive Proxy Statement dated April 25, 2006 under the caption “Section 16(a)
      Beneficial Ownership Reporting Compliance,” there is and has been no failure on
      the part of the Company, the Operating Partnership and the subsidiaries and
      any
      of the officers and directors of the Company, the Operating Partnership and
      any
      of the subsidiaries, in their capacities as such, to comply in all material
      respects with the provisions of the Sarbanes-Oxley Act of 2002 and the rules
      and
      regulations promulgated thereunder.

     

    (uu)      
      Other
      than this Agreement, there are no contracts, agreements or understandings
      between the Company or any of its subsidiaries and any person that would give
      rise to a valid claim against the Company or any of its subsidiaries or
      CF&Co for a brokerage commission, finder’s fee or other like payment with
      respect to the consummation of the transactions contemplated by this
      Agreement.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (vv)     
      The
      Company acknowledges and agrees that CF&Co has informed the Company that
      CF&Co may, to the extent permitted under the
      Securities Act
      and the
      Exchange Act, purchase and sell common shares or preferred stock of the Company
      for its own account while this Agreement is in effect.

     

    (ww)     Any
      certificate signed by an officer of the Company and delivered to CF&Co or to
      counsel for CF&Co shall be deemed to be a representation and warranty by the
      Company and/or the Operating Partnership, as applicable, to CF&Co as to the
      matters set forth therein.

     

    (xx)       
      The
      Company and the Operating Partnership acknowledge that CF&Co and, for
      purposes of the opinions to be delivered pursuant to Section
      7
      hereof,
      counsel to the Company and counsel to CF&Co, will rely upon the accuracy and
      truthfulness of the foregoing representations and hereby consents to such
      reliance.

     

    7.   Covenants
      of the Company.
      The
      Company and the Operating Partnership, jointly and severally, covenant and
      agree
      with CF&Co that:

     

    (a)        
      Registration
      Statement Amendments; Payment of Fees.
      After
      the date of this Agreement and during any period in which a Prospectus relating
      to any Placement Shares is required to be delivered by CF&Co under the
      Securities Act (including in circumstances where such requirement may be
      satisfied pursuant to Rule 172 under the Securities Act), (i) the
      Company will notify CF&Co promptly of the time when any subsequent amendment
      to the Registration Statement, other than documents incorporated by reference,
      has been filed with the Commission and/or has become effective or any subsequent
      supplement to the Prospectus has been filed and of any comment letter from
      the
      Commission or any request by the Commission for any amendment or supplement
      to
      the Registration Statement or Prospectus or for additional information, (ii)
      the
      Company will prepare and file with the Commission, promptly upon CF&Co’s
      request, any amendments or supplements to the Registration Statement or
      Prospectus that, in CF&Co’s reasonable opinion, may be necessary or
      advisable in connection with the distribution of the Placement Shares by
      CF&Co (provided,
      however,
      that
      the failure of CF&Co to make such request shall not relieve the Company of
      any obligation or liability hereunder, or affect CF&Co’s right to rely on
      the representations and warranties made by the Company in this Agreement);
      (iii)
      the Company will not file any amendment or supplement to the Registration
      Statement or Prospectus, other than documents incorporated by reference,
      relating to the Placement Shares or a security convertible into the Placement
      Shares unless a copy thereof has been submitted to CF&Co within a reasonable
      period of time before the filing and CF&Co has not reasonably objected
      thereto (provided,
      however,
      that
      the failure of CF&Co to make such objection shall not relieve the Company of
      any obligation or liability hereunder, or affect CF&Co’s right to rely on
      the representations and warranties made by the Company in this Agreement) and
      the Company will furnish to CF&Co at the time of filing thereof a copy of
      any document that upon filing is deemed to be incorporated by reference into
      the
      Registration Statement or Prospectus, except for those documents available
      via
      EDGAR; and (iv) the Company will cause each amendment or supplement to the
      Prospectus, other than documents incorporated by reference, to be filed with
      the
      Commission as required pursuant to the applicable paragraph of Rule 424(b)
      of
      the Securities Act (without reliance on Rule 424(b)(8) of the Securities
      Act).

     

    (b)        
      Notice
      of Commission Stop Orders.
      The
      Company will advise CF&Co, promptly after it receives notice or obtains
      knowledge thereof, of the issuance or threatened issuance by the Commission
      of
      any stop order suspending the effectiveness of the Registration Statement or
      any
      other order preventing or suspending the use of the Prospectus, of the
      suspension of the qualification of the Placement Shares for offering or sale
      in
      any jurisdiction, or of the initiation or threatening of any proceeding for
      any
      such purpose or any examination pursuant to Section 8(e) of the Securities
      Act,
      or if the Company becomes the subject of a proceeding under Section 8A of the
      Securities Act in connection with the offering of the Shares; and it will
      promptly use its commercially reasonable efforts to prevent the issuance of
      any
      stop or other order or to obtain its withdrawal if such a stop or other order
      should be issued.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (c)         Delivery
      of Prospectus; Subsequent Changes.
      During
      any period in which a Prospectus relating to the Placement Shares is required
      to
      be delivered by CF&Co under the Securities Act with respect to a pending
      sale of the Placement Shares, (including in circumstances where such requirement
      may be satisfied pursuant to Rule 172 under the Securities Act), the Company
      will comply with all requirements imposed upon it by the Securities Act, as
      from
      time to time in force, and to file on or before their respective due dates
      all
      reports and any definitive proxy or information statements required to be filed
      by the Company with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d)
      or any other provision of or under the Exchange Act. If during such period
      any
      event occurs as a result of which the Prospectus as then amended or supplemented
      would include an untrue statement of a material fact or omit to state a material
      fact necessary to make the statements therein, in the light of the circumstances
      then existing, not misleading, or if during such period it is necessary to
      amend
      or supplement the Registration Statement or Prospectus to comply with the
      Securities Act, the Company will promptly notify CF&Co to suspend the
      offering of Placement Shares during such period and the Company will promptly
      amend or supplement the Registration Statement or Prospectus (at the expense
      of
      the Company) so as to correct such statement or omission or effect such
      compliance.

     

    (d)        
      Listing
      of Placement Shares.
      During
      any period in which the Prospectus relating to the Placement Shares is required
      to be delivered by CF&Co under the Securities Act with respect to a pending
      sale of the Placement Shares (including in circumstances where such requirement
      may be satisfied pursuant to Rule 172 under the Securities Act), the Company
      will use its commercially reasonable efforts to cause the Placement Shares
      to be
      listed on the Exchange and to qualify the Placement Shares for sale under the
      securities laws of such jurisdictions as CF&Co reasonably designates and to
      continue such qualifications in effect so long as required for the distribution
      of the Placement Shares; provided,
      however,
      that the
      Company shall not be required in connection therewith to qualify as a foreign
      entity or dealer in securities or file a general consent to service of process
      in any jurisdiction.

     

    (e)         
      Filings
      with the Exchange.
      The
      Company will timely file with the Exchange all documents and notices required
      by
      the Exchange of companies that have or will issue securities that are traded
      on
      the Exchange.

     

    (f)         
      Delivery
      of Registration Statement and Prospectus.
      The
      Company will furnish to CF&Co and its counsel (at the expense of the
      Company) copies of the Registration Statement, the Prospectus (including all
      documents incorporated by reference therein) and all amendments and supplements
      to the Registration Statement or Prospectus that are filed with the Commission
      during any period in which a Prospectus relating to the Placement Shares is
      required to be delivered under the Securities Act (including all documents
      filed
      with the Commission during such period that are deemed to be incorporated by
      reference therein), in each case as soon as reasonably practicable and in such
      quantities as CF&Co may from time to time reasonably request and, at
      CF&Co’s request, will also furnish copies of the Prospectus to each exchange
      or market on which sales of the Placement Shares may be made. The copies of
      the
      Registration Statement and the Prospectus and any supplements or amendments
      thereto furnished to CF&Co will be identical to the electronically
      transmitted copies thereof filed with the Commission pursuant to EDGAR, except
      to the extent permitted by Regulation S-T. 

     

    (g)         Earnings
      Statement.
      The
      Company will make generally available to its security holders as soon as
      practicable, but in any event not later than 15 months after the end of the
      Company’s current fiscal quarter, an earnings statement covering a 12-month
      period that satisfies the provisions of Section 11(a) and Rule 158 of the
      Securities Act.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (h)        
      Expenses.
      The
      Company, whether or not the transactions contemplated hereunder are consummated
      or this Agreement is terminated, in accordance with the provisions of Section
      11
      hereunder, will pay all expenses incident to the performance of its obligations
      hereunder, including, but not limited to, expenses relating to (i) the
      preparation, printing and filing of the Registration Statement and each
      amendment and supplement thereto, of each Prospectus and of each amendment
      and
      supplement thereto, (ii) the preparation, issuance and delivery of the Placement
      Shares, (iii) the qualification of the Placement Shares under securities laws
      in
      accordance with the provisions of Section
      7(d)
      of this
      Agreement, including filing fees, (iv) the printing and delivery to CF&Co of
      copies of the Prospectus and any amendments or supplements thereto, and of
      this
      Agreement, (v) the fees and expenses incurred in connection with the listing
      or
      qualification of the Placement Shares for trading on the Exchange, and (vi)
      filing fees and expenses, if any, of the Commission and the NASD Corporate
      Financing Department. 

     

    (i)   Use
      of
      Proceeds.
      The
      Company will apply the net proceeds from the sale of the Shares to be sold
      by it
      hereunder in accordance in all material respects with the statements under
      the
      caption “Use of Proceeds” in the Prospectus. The Company will effect the
      issuance to the Company by the Operating Partnership of a number of Common
      Units
      equal to the number of Shares sold pursuant to this Agreement upon the Company's
      contribution to the Operating Partnership of the proceeds from the sale of
      the
      Shares.

     

    (j)   Notice
      of Other Sales.
      During
      the pendency of any Placement Notice given hereunder, the Company shall provide
      CF&Co notice as promptly as reasonably possible before it offers to sell,
      contracts to sell, sells, grants any option to sell or otherwise disposes of
      any
      Shares (other than Placement Shares offered pursuant to the provisions of this
      Agreement) or securities convertible into or exchangeable for Shares, warrants
      or any rights to purchase or acquire Shares; provided,
      that
      such notice shall not be required in connection with the (i) issuance, grant
      or
      sale of the Company’s common shares, options to purchase the Company’s common
      shares or the Company’s common shares issuable upon the exercise of options or
      other equity awards pursuant to the any stock option, stock bonus or other
      stock
      plan or arrangement described in the Prospectus, (ii) the issuance of securities
      in connection with an acquisition, merger, joint venture or sale or purchase
      of
      assets described in the Prospectus, (iii) the issuance or sale of the Company’s
      common shares pursuant to any dividend reinvestment plan that the Company may
      adopt from time to time provided the implementation of such is disclosed to
      CF&Co in advance, (iv) any of the Company’s common shares issuable upon the
      redemption of outstanding Common Units in accordance with the Operating
      Partnership Agreement and (v) the issuance of Common Units by the Operating
      Partnership in exchange for properties.

     

    (k)        
      Change
      of Circumstances.
      The
      Company will, at any time during a fiscal quarter in which the Company intends
      to tender a Placement Notice or sell Placement Shares, advise CF&Co promptly
      after it shall have received notice or obtained knowledge thereof, of any
      information or fact that would alter or affect in any material respect any
      opinion, certificate, letter or other document provided to CF&Co pursuant to
      this Agreement.

     

    (l)         
      Due
      Diligence Cooperation.
      The
      Company and the Operating Partnership will cooperate with any reasonable due
      diligence review conducted by CF&Co or its agents in connection with the
      transactions contemplated hereby, including, without limitation, providing
      information and making available documents and senior officers, during regular
      business hours and at the Company’s principal offices, as CF&Co may
      reasonably request.

     

    (m)         Required
      Filings Relating to Placement of Placement Shares.
      The
      Company agrees that on such dates as the Securities Act shall require, the
      Company will (i) file a prospectus supplement with the Commission under the
      applicable paragraph of Rule 424(b) under the Securities Act, which prospectus
      supplement will set forth, within the relevant period, the amount of Placement
      Shares sold through CF&Co, the Net Proceeds to the Company and the
      compensation payable by the Company to CF&Co with respect to such Placement
      Shares, and (ii) deliver such number of copies of each such prospectus
      supplement to each exchange or market on which such sales were effected as
      may
      be required by the rules or regulations of such exchange or market.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (n)        
      Representation
      Dates; Certificate.
      On or
      prior to the date that the first Shares are sold pursuant to the terms of this
      Agreement and each time the Company (i) files the Prospectus relating to the
      Placement Shares or amends or supplements the Registration Statement or the
      Prospectus relating to the Placement Shares (other than a prospectus supplement
      filed in accordance with Section
      7(m)
      of this
      Agreement) by means of a post-effective amendment, sticker, or supplement but
      not by means of incorporation of documents by reference to the Registration
      Statement or the Prospectus relating to the Placement Shares; (ii) files an
      annual report on Form 10-K under the Exchange Act; (iii) files its quarterly
      reports on Form 10-Q under the Exchange Act; or (iv) files a report on Form
      8-K
      containing amended financial information (other than an earnings release, to
      “furnish” information pursuant to Items 2.02 or 7.01 of Form 8-K or to provide
      disclosure pursuant to Item 8.01 of Form 8-K relating to the reclassifications
      of certain properties as discontinued operations in accordance with Statement
      of
      Financial Accounting Standards No. 144) under the Exchange Act (each date of
      filing of one or more of the documents referred to in clauses (i) through (iv)
      shall be a "Representation
      Date");
      the
      Company shall furnish CF&Co with a certificate, in the form attached hereto
      as Exhibit
      7(n)
      within
      ten (10) Trading Days of any Representation Date if requested by CF&Co.
      The
      requirement to provide a certificate under this Section
      7(n)
      shall be
      waived for any Representation Date occurring at a time at which no Placement
      Notice is pending, which waiver shall continue until the earlier to occur of
      the
      date the Company delivers a Placement Notice hereunder (which for such calendar
      quarter shall be considered a Representation Date) and the next occurring
      Representation Date. Notwithstanding the foregoing, if the Company subsequently
      decides to sell Placement Shares following a Representation Date when the
      Company relied on such waiver and did not provide CF&Co with a certificate
      under this Section
      7(n),
      then
      before the Company delivers the Placement Notice or CF&Co sells any
      Placement Shares, the Company shall provide CF&Co with a certificate, in the
      form attached hereto as Exhibit
      7(n),
      dated
      the date of the Placement Notice.

     

    (o)         Legal
      Opinion.
      On
      or
      prior to the date that the first Shares are sold pursuant to the terms of this
      Agreement,
      the
      Company shall cause to be furnished to CF&Co (i) a written opinion of Hunton
& Williams LLP (“Company
      Counsel”),
      or
      other counsel satisfactory to CF&Co, in form and substance satisfactory to
      CF&Co and its counsel, dated the date that the opinion is required to be
      delivered, substantially similar to the form attached hereto as Exhibit
      7(o)-A
      and (ii)
      a letter of Company Counsel or other counsel satisfactory to CF&Co, in form
      and substance satisfactory to CF&Co and its counsel, dated the date that the
      letter is required to be delivered, substantially similar to the form attached
      hereto as Exhibit
      7(o)-B.
      Within
      ten (10) Trading Days of each Representation Date with respect to which the
      Company is obligated to deliver a certificate in the form attached hereto as
      Exhibit
      7(n)
      for
      which no waiver is applicable, the Company shall cause to be furnished to
      CF&Co (i) a written opinion of Company Counsel, or other counsel
      satisfactory to CF&Co, in form and substance satisfactory to CF&Co and
      its counsel, dated the date that the opinion is required to be delivered,
      substantially similar to the form attached hereto as Exhibit
      7(o)-C
      and (ii)
      a letter of Company Counsel or other counsel satisfactory to CF&Co, in form
      and substance satisfactory to CF&Co and its counsel, dated the date that the
      letter is required to be delivered, substantially similar to the form attached
      hereto as Exhibit
      7(o)-C
      modified, as necessary, to relate to the Registration Statement and the
      Prospectus as then amended or supplemented; provided,
      however,
      that in
      lieu of such opinions for subsequent Representation Dates, counsel may furnish
      CF&Co with a letter (a “Reliance
      Letter”)
      to the
      effect that CF&Co may rely on a prior opinion delivered under this
Section
      7(o)
      to the
      same extent as if it were dated the date of such letter (except that statements
      in such prior opinion shall be deemed to relate to the Registration Statement
      and the Prospectus as amended or supplemented at such Representation Date).
      

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (p)        
      Comfort
      Letter.
      On or
      prior to the date that the first Shares are sold pursuant to the terms of this
      Agreement and within ten (10) Trading Days of each Representation Date with
      respect to which the Company is obligated to deliver a certificate in the form
      attached hereto as Exhibit
      7(n)
      for
      which no waiver is applicable, the Company shall cause its independent
      accountants (and any other independent accountants whose report is included
      in
      the Registration Statement or the Prospectus) to furnish CF&Co letters (the
"Comfort
      Letters"),
      dated
      the date of the Comfort Letter is delivered, in form and substance satisfactory
      to CF&Co, (i) confirming that they are an independent registered public
      accounting firm within the meaning of the Securities Act, the Exchange Act
      and
      the PCAOB, (ii) stating, as of such date, the conclusions and findings of such
      firm with respect to the financial information and other matters ordinarily
      covered by accountants’ “comfort letters” to underwriters in connection with
      registered public offerings (the first such letter, the “Initial
      Comfort Letter”)
      and
      (iii) updating the Initial Comfort Letter with any information that would have
      been included in the Initial Comfort Letter had it been given on such date
      and
      modified as necessary to relate to the Registration Statement and the
      Prospectus, as amended and supplemented to the date of such letter.

     

    (q)        
      Non-Delivery
      of Materials.
      Failure
      to deliver any of the certificates, opinion, letters or comfort letters required
      by and at the times set forth in paragraphs (m), (n), (o) or (p) above shall
      be
      deemed as the delivery by the Company of a Suspension Notice. 

     

    (r)         
      Market
      Activities.
      The
      Company will not, directly or indirectly, (i) take any action designed to cause
      or result in, or that constitutes or might reasonably be expected to constitute,
      the stabilization or manipulation of the price of any security of the Company
      to
      facilitate the sale or resale of the Shares or (ii) sell, bid for, or purchase
      the Shares to be issued and sold pursuant to this Agreement, or pay anyone
      any
      compensation for soliciting purchases of the Shares to be issued and sold
      pursuant to this Agreement other than CF&Co; provided, however, that the
      Company may bid for and purchase its common shares in accordance with Rule
      10b-18 under the Exchange Act.

     

    (s)        
      Insurance.
      The
      Company and its subsidiaries shall maintain, or caused to be maintained,
      insurance in such amounts and covering such risks as is reasonable and customary
      for companies engaged in similar businesses in similar industries.

     

    (t)         
      Compliance
      with Laws.
      The
      Company and each of its subsidiaries shall maintain, or cause to be maintained,
      all material environmental permits, licenses and other authorizations required
      by federal, state and local law in order to conduct their businesses as
      described in the Prospectus, and the Company and each of its subsidiaries shall
      conduct their businesses, or cause their businesses to be conducted, in
      substantial compliance with such permits, licenses and authorizations and with
      applicable environmental laws, except where the failure to maintain or be in
      compliance with such permits, licenses and authorizations could not reasonably
      be expected to have a Material Adverse Effect.

     

    (u)        
      REIT
      Treatment.
      The
      Company will take all commercially reasonable efforts to enable the Company
      to
      continue to meet the requirements for qualification and taxation as a REIT
      under
      the Code for subsequent tax years that include any portion of the term of this
      Agreement.

     

    (v)        
      Investment
      Company Act.
      The
      Company will conduct its affairs in such a manner so as to reasonably ensure
      that neither it nor its subsidiaries will be or become, at any time prior to
      the
      termination of this Agreement, an “investment company,” as such term is defined
      in the Investment Company Act, assuming no change in the Commission’s current
      interpretation as to entities that are not considered an investment
      company.

     

    (w)        Securities
      Act and Exchange Act.
      The
      Company will use its best efforts to comply with all requirements imposed upon
      it by the Securities Act and the Exchange Act as from time to time in force,
      so
      far as necessary to permit the continuance of sales of, or dealings in, the
      Placement Shares as contemplated by the provisions hereof and the
      Prospectus.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (x)         
      No
      Offer to Sell.
      Other
      than a free writing prospectus (as defined in Rule 405 under the Securities
      Act)
      approved in advance by the Company and CF&Co in its capacity as principal or
      agent hereunder, neither CF&Co nor the Company (including its agents and
      representatives, other than CF&Co in its capacity as such) will, directly or
      indirectly, make, use, prepare, authorize, approve or refer to any free writing
      prospectus relating to the Shares to be sold by CF&Co as principal or agent
      hereunder.

     

    (y)        
      Sarbanes-Oxley
      Act.
      The
      Company and its subsidiaries will use their best efforts to comply with all
      effective applicable provisions of the Sarbanes-Oxley Act of 2002.

     

    8.   Conditions
      to CF&Co’s Obligations.
      The
      obligations of CF&Co hereunder with respect to a Placement will be subject
      to the continuing accuracy and completeness of the representations and
      warranties made by the Company and the Operating Partnership herein, to the
      due
      performance by the Company and the Operating Partnership of their respective
      obligations hereunder, to the completion by CF&Co of a due diligence review
      satisfactory to CF&Co in its reasonable judgment, and to the continuing
      satisfaction (or waiver by CF&Co in its sole discretion) of the following
      additional conditions:

     

    (a)        
      Registration
      Statement Effective.
      The
      Registration Statement shall be effective and shall be available for (i) all
      sales of Placement Shares issued pursuant to all prior Placement Notices and
      (ii) the sale of all Placement Shares contemplated to be issued by any Placement
      Notice.

     

    (b)         No
      Material Notices.
      None of
      the following events shall have occurred and be continuing: (i) receipt by
      the
      Company or any of its subsidiaries of any request for additional information
      from the Commission or any other federal or state governmental authority during
      the period of effectiveness of the Registration Statement, the response to
      which
      would require any post-effective amendments or supplements to the Registration
      Statement or the Prospectus; (ii) the issuance by the Commission or any
      other federal or state governmental authority of any stop order suspending
      the
      effectiveness of the Registration Statement or the initiation of any proceedings
      for that purpose; (iii) receipt by the Company of any notification with respect
      to the suspension of the qualification or exemption from qualification of any
      of
      the Placement Shares for sale in any jurisdiction or the initiation or
      threatening of any proceeding for such purpose; (iv) the occurrence of any
      event
      that makes any material statement made in the Registration Statement or the
      Prospectus or any document incorporated or deemed to be incorporated therein
      by
      reference untrue in any material respect or that requires the making of any
      changes in the Registration Statement, related Prospectus or such documents
      so
      that, in the case of the Registration Statement, it will not contain any
      materially untrue statement of a material fact or omit to state any material
      fact required to be stated therein or necessary to make the statements therein
      not misleading and, that in the case of the Prospectus, it will not contain
      any
      materially untrue statement of a material fact or omit to state any material
      fact required to be stated therein or necessary to make the statements therein,
      in the light of the circumstances under which they were made, not misleading.
      

     

    (c)        
      No
      Misstatement or Material Omission.
      CF&Co shall not have advised the Company that the Registration Statement or
      Prospectus, or any amendment or supplement thereto, contains an untrue statement
      of fact that in CF&Co’s reasonable opinion is material, or omits to state a
      fact that in CF&Co’s opinion is material and is required to be stated
      therein or is necessary to make the statements therein not
      misleading.

     

    (d)        
      Material
      Changes.
      Except
      as disclosed in the Prospectus, there shall not have been any material adverse
      change, on a consolidated basis, in the authorized equity or long-term debt
      of
      the Company or the Operating Partnership or any Material Adverse Effect, or
      any
      development that could reasonably be expected to cause a Material Adverse
      Effect, or any downgrading in or withdrawal of the rating assigned to any of
      the
      Company’s or the Operating Partnership’s securities (other than asset backed
      securities) by any rating organization or a public announcement by any rating
      organization that it has under surveillance or review its rating of any of
      the
      Company’s or the Operating Partnership’s securities (other than asset backed
      securities), the effect of which, in the case of any such action by a rating
      organization described above, in the reasonable judgment of CF&Co (without
      relieving the Company or the Operating Partnership of any obligation or
      liability it may otherwise have), is so material as to make it impracticable
      or
      inadvisable to proceed with the offering of the Placement Shares on the terms
      and in the manner contemplated in the Prospectus.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (e)         Legal
      Opinion and Letter.
      CF&Co shall have received the opinions and letter of Company Counsel
      required to be delivered pursuant Section
      7(o)
      on or
      before the date on which such delivery of such opinion and letter is required
      pursuant to Section
      7(o).

     

    (f)         
      Comfort
      Letter.
      CF&Co shall have received the Comfort Letter required to be delivered
      pursuant Section
      7(p)
      on or
      before the date on which such delivery of such opinion is required pursuant
      to
Section
      7(p).

     

    (g)        
      Representation
      Certificate.
      CF&Co shall have received the certificate required to be delivered pursuant
      to Section 7(n)
      on or
      before the date on which delivery of such certificate is required pursuant
      to
Section
      7(n).

     

    (h)        
      No
      Suspension.
      Trading
      in the Shares shall not have been suspended on the Exchange.

     

    (i)         
      Other
      Materials.
      On each
      date on which the Company is required to deliver a certificate pursuant to
      Section
      7(n),
      the
      Company and the Operating Partnership shall have furnished to CF&Co such
      appropriate further information, certificates and documents as CF&Co may
      have reasonably requested. All such opinions, certificates, letters and other
      documents shall have been in compliance with the provisions hereof. The Company
      and the Operating Partnership shall have furnished CF&Co with such conformed
      copies of such opinions, certificates, letters and other documents as CF&Co
      shall have reasonably requested.

     

    (j)         
      Securities
      Act Filings Made.
      All
      filings with the Commission required by Rule 424 under the Securities Act to
      have been filed prior to the issuance of any Placement Notice hereunder shall
      have been made within the applicable time period prescribed for such filing
      by
      Rule 424.

     

    (k)        
      Approval
      for Listing.
      The
      Placement Shares shall either have been (i) approved for listing on the
      Exchange, subject only to notice of issuance, or (ii) the Company shall have
      filed an application for listing of the Placement Shares on the Exchange at,
      or
      prior to, the issuance of any Placement Notice.

     

    (l)          
      No
      Termination Event.
      There
      shall not have occurred any event that would permit CF&Co to terminate this
      Agreement pursuant to Section
      11(a).

     

    9.   Indemnification
      and Contribution.

     

    (a)         Company
      and Operating Partnership Indemnification.
      The
      Company and the Operating Partnership, jointly and severally, agree to indemnify
      and hold harmless CF&Co, the directors, officers, partners, employees and
      agents of CF&Co and each person, if any, who (i) controls CF&Co within
      the meaning of Section 15 of the
      Securities Act
      or
      Section 20 of the Exchange Act, or (ii) is controlled by or is under common
      control with CF&Co (a “CF&Co
      Affiliate”)
      from
      and against any and all losses, claims, liabilities, expenses and damages
      (including, but not limited to, any and all reasonable investigative, legal
      and
      other expenses incurred in connection with, and any and all amounts paid in
      settlement (in accordance with Section
      9(c))
      of, any
      action, suit or proceeding between any of the indemnified parties and any
      indemnifying parties or between any indemnified party and any third party,
      or
      otherwise, or any claim asserted), as and when incurred, to which CF&Co, or
      any such person, may become subject under the
      Securities
      Act, the Exchange Act or other federal or state statutory law or regulation,
      at
      common law or otherwise, insofar as such losses, claims, liabilities, expenses
      or damages arise out of or are based, directly or indirectly, on (x) any untrue
      statement or alleged untrue statement of a material fact contained in the
      Registration Statement or the Prospectus or any amendment or supplement to
      the
      Registration Statement or the Prospectus or in any free writing prospectus
      or in
      any application or other document executed by or on behalf of the Company or
      the
      Operating Partnership or based on written information furnished by or on behalf
      of the Company or the Operating Partnership filed in any jurisdiction in order
      to qualify the Shares under the securities laws thereof or filed with the
      Commission, (y) the omission or alleged omission to state in any such document
      a
      material fact required to be stated in it or necessary to make the statements
      in
      it not misleading or (z) any breach by any of the indemnifying parties of any
      of
      their respective representations, warranties and agreements contained in this
      Agreement; provided,
      however,
      that
      this indemnity agreement shall not apply to the extent that such loss, claim,
      liability, expense or damage arises from the sale of the Placement Shares
      pursuant to this Agreement and is caused directly or indirectly by an untrue
      statement or omission made in reliance upon and in conformity with written
      information relating to CF&Co and furnished to the Company by CF&Co
      expressly for inclusion in any document as described in clause (x) of this
      Section
      9(a)
      (that
      information being limited to the information described in Schedule
      4
      hereto).
      This indemnity agreement will be in addition to any liability that the Company
      or the Operating Partnership might otherwise have.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (b)        
      CF&Co
      Indemnification.
      CF&Co agrees to indemnify and hold harmless the Company, its directors, each
      officer of the Company that signed the Registration Statement, the Operating
      Partnership and each person, if any, who (i) controls the Company or the
      Operating Partnership within the meaning of Section 15 of the
      Securities Act
      or
      Section 20 of the Exchange Act or (ii) is controlled by or is under common
      control with the Company or the Operating Partnership (a “Company
      Affiliate”)
      against any and all loss, liability, claim, damage and expense described in
      the
      indemnity contained in Section
      9(a),
      as
      incurred, but only with respect to untrue statements or omissions, or alleged
      untrue statements or omissions, made in the Registration Statement (or any
      amendments thereto) or the Prospectus (or any amendment or supplement thereto)
      in reliance upon and in conformity with written information relating to
      CF&Co and furnished to the Company by CF&Co expressly for inclusion in
      any document as described in clause (x) Section
      9(a)
      (that
      information being limited to the information described in Schedule
      4
      hereto).

     

    (c)        
      Procedure.
      Any
      party that proposes to assert the right to be indemnified under this
Section
      9 will,
      promptly after receipt of notice of commencement of any action against such
      party in respect of which a claim is to be made against an indemnifying party
      or
      parties under this Section
      9,
      notify
      each such indemnifying party of the commencement of such action, enclosing
      a
      copy of all papers served, but the omission so to notify such indemnifying
      party
      will not relieve the indemnifying party from (i) any liability that it might
      have to any indemnified party otherwise than under this Section
      9
      and (ii)
      any liability that it may have to any indemnified party under the foregoing
      provision of this Section
      9
      unless,
      and only to the extent that, such omission results in the forfeiture of
      substantive rights or defenses by the indemnifying party. If any such action
      is
      brought against any indemnified party and it notifies the indemnifying party
      of
      its commencement, the indemnifying party will be entitled to participate in
      and,
      to the extent that it elects by delivering written notice to the indemnified
      party promptly after receiving notice of the commencement of the action from
      the
      indemnified party, jointly with any other indemnifying party similarly notified,
      to assume the defense of the action, with counsel reasonably satisfactory to
      the
      indemnified party, and after notice from the indemnifying party to the
      indemnified party of its election to assume the defense, the indemnifying party
      will not be liable to the indemnified party for any legal or other expenses
      except as provided below and except for the reasonable costs of investigation
      subsequently incurred by the indemnified party in connection with the defense.
      The indemnified party will have the right to employ its own counsel in any
      such
      action, but the fees, expenses and other charges of such counsel will be at
      the
      expense of such indemnified party unless (i) the employment of counsel by the
      indemnified party has been authorized in writing by the indemnifying party,
      (ii)
      the indemnified party has reasonably concluded (based on advice of counsel)
      that
      there may be legal defenses available to it or other indemnified parties that
      are different from or in addition to those available to the indemnifying party,
      (iii) a conflict or potential conflict exists (based on advice of counsel to
      the
      indemnified party) between the indemnified party and the indemnifying party
      (in
      which case the indemnifying party will not have the right to direct the defense
      of such action on behalf of the indemnified party) or (iv) the indemnifying
      party has not in fact employed counsel to assume the defense of such action
      within a reasonable time after receiving notice of the commencement of the
      action, in each of which cases the reasonable fees, disbursements and other
      charges of counsel will be at the expense of the indemnifying party or parties.
      It is understood that the indemnifying party or parties shall not, in connection
      with any proceeding or related proceedings in the same jurisdiction, be liable
      for the reasonable fees, disbursements and other charges of more than one
      separate firm admitted to practice in such jurisdiction at any one time for
      all
      such indemnified party or parties. All such fees, disbursements and other
      charges will be reimbursed by the indemnifying party promptly as they are
      incurred. An indemnifying party will not, in any event, be liable for any
      settlement of any action or claim effected without its written consent. No
      indemnifying party shall, without the prior written consent of each indemnified
      party, settle or compromise or consent to the entry of any judgment in any
      pending or threatened claim, action or proceeding relating to the matters
      contemplated by this Section
      9
      (whether
      or not any indemnified party is a party thereto), unless such settlement,
      compromise or consent includes an unconditional release of each indemnified
      party from all liability arising or that may arise out of such claim, action
      or
      proceeding. 

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (d)         Contribution.
      In
      order to provide for just and equitable contribution in circumstances in which
      the indemnification provided for in the foregoing paragraphs of this
Section
      9
      is
      applicable in accordance with its terms but for any reason is held to be
      unavailable from the Company, the Operating Partnership or CF&Co, the
      Company and CF&Co will contribute to the total losses, claims, liabilities,
      expenses and damages (including any investigative, legal and other expenses
      reasonably incurred in connection with, and any amount paid in settlement of,
      any action, suit or proceeding or any claim asserted, but after deducting any
      contribution received by the Company or the Operating Partnership from persons
      other than CF&Co, such as persons who control the Company or the Operating
      Partnership within the meaning of the
      Securities Act,
      officers of the Company who signed the Registration Statement and directors
      of
      the Company, who also may be liable for contribution) to which the Company,
      the
      Operating Partnership and CF&Co may be subject in such proportion as shall
      be appropriate to reflect the relative benefits received by the Company and
      the
      Operating Partnership, on the one hand, and CF&Co, on the other. The
      relative benefits received by the Company and the Operating Partnership on
      the
      one hand and CF&Co on the other hand shall be deemed to be in the same
      proportion as the total net proceeds from the sale of the Placement Shares
      (before deducting expenses) received by the Company bear to the total
      compensation received by CF&Co from the sale of Placement Shares on behalf
      of the Company. If, but only if, the allocation provided by the foregoing
      sentence is not permitted by applicable law, the allocation of contribution
      shall be made in such proportion as is appropriate to reflect not only the
      relative benefits referred to in the foregoing sentence but also the relative
      fault of the Company and the Operating Partnership, on the one hand, and
      CF&Co, on the other, with respect to the statements or omission that
      resulted in such loss, claim, liability, expense or damage, or action in respect
      thereof, as well as any other relevant equitable considerations with respect
      to
      such offering. Such relative fault shall be determined by reference to, among
      other things, whether the untrue or alleged untrue statement of a material
      fact
      or omission or alleged omission to state a material fact relates to information
      supplied by the Company or the Operating Partnership, on the one hand, or
      CF&Co, on the other, the intent of the parties and their relative knowledge,
      access to information and opportunity to correct or prevent such statement
      or
      omission. The Company and the Operating Partnership and CF&Co agree that it
      would not be just and equitable if contributions pursuant to this Section
      9(d)
      were to
      be determined by pro rata allocation or by any other method of allocation that
      does not take into account the equitable considerations referred to herein.
      The
      amount paid or payable by an indemnified party as a result of the loss, claim,
      liability, expense, or damage, or action in respect thereof, referred to above
      in this Section
      9(d)
      shall be
      deemed to include, for the purpose of this Section
      9(d),
      any
      legal or other expenses reasonably incurred by such indemnified party in
      connection with investigating or defending any such action or claim to the
      extent consistent with Section
      9(c)
      hereof.
      Notwithstanding the foregoing provisions of this Section
      9(d),
      CF&Co shall not be required to contribute any amount in excess of the
      commissions received by it under this Agreement and no person found guilty
      of
      fraudulent misrepresentation (within the meaning of Section 11(f) of
the
      Securities Act)
      will be
      entitled to contribution from any person who was not guilty of such fraudulent
      misrepresentation. For purposes of this Section
      9(d),
      any
      person who controls a party to this Agreement within the meaning of the
      Securities Act,
      and any
      officers, directors, partners, employees or agents of CF&Co, will have the
      same rights to contribution as that party, and each officer of the Company
      who
      signed the Registration Statement will have the same rights to contribution
      as
      the Company, subject in each case to the provisions hereof. Any party entitled
      to contribution, promptly after receipt of notice of commencement of any action
      against such party in respect of which a claim for contribution may be made
      under this Section
      9(d),
      will
      notify any such party or parties from whom contribution may be sought, but
      the
      omission to so notify will not relieve that party or parties from whom
      contribution may be sought from any other obligation it or they may have under
      this Section
      9(d)
      except
      to the extent that the failure to so notify such other party materially
      prejudiced the substantive rights or defenses of the party from whom
      contribution is sought. Except for a settlement entered into pursuant to the
      last sentence of Section
      9(c)
      hereof,
      no party will be liable for contribution with respect to any action or claim
      settled without its written consent if such consent is required pursuant to
      Section
      9(c)
      hereof.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    10.        
      Representations
      and Agreements to Survive Delivery.
      The
      indemnity and contribution agreements contained in Section
      9
      of this
      Agreement and all representations and warranties of the Company and the
      Operating Partnership herein or in certificates delivered pursuant hereto shall
      survive, as of their respective dates, regardless of (i) any investigation
      made
      by or on behalf of CF&Co, any controlling persons, or the Company or the
      Operating Partnership (or any of their respective officers, directors or
      controlling persons), (ii) delivery and acceptance of the Placement Shares
      and
      payment therefor or (iii) any termination of this Agreement.

     

    11.        
      Termination.

     

    (a)         CF&Co
      shall have the right by giving notice as hereinafter specified at any time
      to
      terminate this Agreement if (i) any Material Adverse Effect, or any development
      that could reasonably be expected to cause a Material Adverse Effect has
      occurred, that, in the reasonable judgment of CF&Co, may materially impair
      the ability of CF&Co to sell the Placement Shares hereunder; (ii) the
      Company or the Operating Partnership shall have failed, refused or been unable
      to perform any agreement on its part to be performed hereunder; other than
      any
      failure of the Company to deliver (or cause another person to deliver) any
      certification, opinion, or letter required under Sections 7(n),
      7(o),
      or
7(p),
      or
      (iii) any other condition of CF&Co’s obligations hereunder is not
      fulfilled; or (iv), any suspension or limitation of trading in the Placement
      Shares or in securities generally on the Exchange shall have occurred. Any
      such
      termination shall be without liability of any party to any other party except
      that the provisions of Section
      7(h)
      (Expenses), Section
      9
      (Indemnification), Section
      10
      (Survival of Representations), Section
      16
      (Applicable Law; Consent to Jurisdiction) and Section
      17
      (Waiver
      of Jury Trial) hereof shall remain in full force and effect notwithstanding
      such
      termination.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (b)        
      The
      Company and the Operating Partnership shall have the right, by giving ten (10)
      days notice as hereinafter specified to terminate this Agreement in their sole
      discretion at
      any
      time after the date of this Agreement.
      Any
      such termination shall be without liability of any party to any other party
      except that the provisions of Section
      7(h),
      Section
      9,
      Section
      10,
      Section
      16
      and
Section
      17
      hereof
      shall remain in full force and effect notwithstanding such
      termination.

     

    (c)        
      CF&Co
      shall have the right, by giving ten (10) days notice as hereinafter specified
      to
      terminate this Agreement in its sole discretion
      at any
      time after the date of this Agreement.
      Any
      such termination shall be without liability of any party to any other party
      except that the provisions of Section
      7(h),
      Section
      9,
      Section
      10,
      Section
      16
      and
Section
      17
      hereof
      shall remain in full force and effect notwithstanding such
      termination.

     

    (d)         Unless
      earlier terminated pursuant to this Section
      11,
      this
      Agreement shall automatically terminate upon the issuance and sale of all of
      the
      Placement Shares through CF&Co on the terms and subject to the conditions
      set forth herein; provided
      that the
      provisions of Section
      7(h),
      Section
      9,
      Section
      10,
      Section
      16
      and
Section
      17
      hereof
      shall remain in full force and effect notwithstanding such
      termination.

     

    (e)         This
      Agreement shall remain in full force and effect unless terminated pursuant
      to
Sections
      11(a),
      (b),
      (c),
      or
(d)
      above or
      otherwise by mutual agreement of the parties; provided,
      however, that
      any
      such termination by mutual agreement shall in all cases be deemed to provide
      that Section
      7(h),
      Section
      9,
      Section
      10,
      Section
      16
      and
Section
      17
      shall
      remain in full force and effect.

     

    (f)         
      Any
      termination of this Agreement shall be effective on the date specified in such
      notice of termination; provided,
      however,
      that
      such termination shall not be effective until the close of business on the
      date
      of receipt of such notice by CF&Co or the Company, as the case may be. If
      such termination shall occur prior to the Settlement Date for any sale of
      Placement Shares, such Placement Shares shall settle in accordance with the
      provisions of this Agreement.

     

    12.        
      Notices.
      All
      notices or other communications required
      or permitted to be given by any party to any other party pursuant to the terms
      of this Agreement shall
      be
      in writing, unless otherwise specified in this Agreement, and if sent to
      CF&Co, shall be delivered to CF&Co at Cantor Fitzgerald & Co., 110
      East 59th Street, New York, New York 10022, fax no. (212) 829-4972, Attention:
      ITD-Investment Banking, with copies to Stephen Merkel, General Counsel, at
      the
      same address, and Clifford Chance US LLP, 31 West 52nd Street, New York, New
      York, fax no. (212) 878-8375, Attention: Jay L. Bernstein; or if sent to the
      Company or the Operating Partnership, shall be delivered to Hersha Hospitality
      Trust, 510 Walnut Street, 9th
      Floor,
      Philadelphia, Pennsylvania 19106 fax no. (717) 774-7383 Attention: Ashish R.
      Parikh with a copy to Hunton & Williams LLP, 951 East Byrd Street, Richmond,
      Virginia 23219, fax no. (804) 788-8218, Attention: James S. Seevers, Jr. Each
      party to this Agreement may change such address for notices by sending to the
      parties to this Agreement written notice of a new address for such
      purpose.
      Each
      such notice or other communication shall be deemed given (i) when delivered
      personally or by verifiable facsimile transmission (with an original to follow)
      on or before 4:30 p.m., New York City time, on a Business Day or, if such day
      is
      not a Business Day, on the next succeeding Business Day, (ii) on the next
      Business Day after timely delivery to a nationally-recognized overnight courier
      and (iii) on the Business Day
      actually received if deposited in the U.S. mail (certified or registered mail,
      return receipt requested, postage prepaid). For purposes of this Agreement,
      “Business
      Day”
shall
      mean any day on which the Exchange and commercial banks in the City of New
      York
      are open for business.

     

    13.         Successors
      and Assigns.
      This
      Agreement shall inure to the benefit of and be binding upon the Company, the
      Operating Partnership and CF&Co and their respective successors and the
      affiliates, controlling persons, officers and directors referred to in
Section
      9
      hereof.
      References to any of the parties contained in this Agreement shall be deemed
      to
      include the successors and permitted assigns of such party. Nothing
      in this Agreement, express or implied, is intended to confer upon any party
      other than the parties hereto or their respective successors and permitted
      assigns any rights, remedies, obligations or liabilities under or by reason
      of
      this Agreement, except as expressly provided in this Agreement. Neither party
      may assign its rights or obligations under this Agreement without the prior
      written consent of the other party; provided,
      however,
      that
      CF&Co may assign its rights and obligations hereunder to an affiliate of
      CF&Co without obtaining the Company’s consent.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    14.       
      Adjustments
      for Stock Splits.
      The
      parties acknowledge and agree that all stock-related numbers contained in this
      Agreement shall be adjusted to take into account any stock split, stock dividend
      or similar event effected with respect to the Shares.

     

    15.        
      Entire
      Agreement; Amendment; Severability.
      This
      Agreement (including all schedules and exhibits attached hereto and Placement
      Notices issued pursuant hereto) constitutes the entire agreement and supersedes
      all other prior and contemporaneous agreements and undertakings, both written
      and oral, among the parties hereto with regard to the subject matter
      hereof.
      Neither
      this Agreement nor any term hereof may be amended except pursuant to a written
      instrument executed by the Company and CF&Co. In the event that any one or
      more of the provisions contained herein, or the application thereof in any
      circumstance, is held invalid, illegal or unenforceable as written by
      a
      court of competent jurisdiction,
      then
      such
      provision shall be given full force and effect to the fullest possible extent
      that it is
      valid,
      legal and enforceable,
      and the
      remainder of the terms and provisions herein shall be construed as if such
      invalid,
      illegal or unenforceable term
      or
      provision was not contained herein, but only to the extent that giving effect
      to
      such provision and the remainder of the terms and provisions hereof shall be
      in
      accordance with the intent of the parties as reflected in this
      Agreement.

     

    16.        
      Applicable
      Law; Consent to Jurisdiction.
      This
      Agreement shall be governed by, and construed in accordance with, the internal
      laws of the State of New York without regard to the principles of conflicts
      of
      laws. Each
      party hereby irrevocably submits to the non-exclusive jurisdiction of the state
      and federal courts sitting in the City of New York, borough of Manhattan, for
      the adjudication of any dispute hereunder or in connection with any transaction
      contemplated hereby, and hereby irrevocably waives, and agrees not to assert
      in
      any suit, action or proceeding, any claim that it is not personally subject
      to
      the jurisdiction of any such court, that such suit, action or proceeding is
      brought in an inconvenient forum or that the venue of such suit, action or
      proceeding is improper. Each party hereby irrevocably waives personal service
      of
      process and consents to process being served in any such suit, action or
      proceeding by mailing a copy thereof (certified or registered mail, return
      receipt requested) to such party at the address in effect for notices to it
      under this Agreement and agrees that such service shall constitute good and
      sufficient service of process and notice thereof. Nothing contained herein
      shall
      be deemed to limit in any way any right to serve process in any manner permitted
      by law.

     

    17.        
      Waiver
      of Jury Trial.
      The
      Company, the Operating Partnership and CF&Co each hereby irrevocably waives
      any right it may have to a trial by jury in respect of any claim based upon
      or
      arising out of this Agreement or any transaction contemplated
      hereby.

     

    18.        
      Absence
      of Fiduciary Relationship. The
      Company and the Operating Partnership jointly and severally acknowledge and
      agree that:

     

    (a)        
      CF&Co
      has been retained solely to act as agent in connection with the sale of the
      Shares and that no fiduciary, advisory or agency relationship between the
      Company and CF&Co has been created in respect of any of the transactions
      contemplated by this Agreement, irrespective of whether CF&Co has advised or
      is advising the Company on other matters;

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (b)         each
      of
      the Company and the Operating Partnership is capable of evaluating and
      understanding and understand and accept the terms, risks and conditions of
      the
      transactions contemplated by this Agreement;

     

    (c)        
      each
      of
      the Company and the Operating Partnership has been advised that CF&Co and
      its affiliates are engaged in a broad range of transactions which may involve
      interests that differ from those of the Company or the Operating Partnership
      and
      that CF&Co has no obligation to disclose such interests and transactions to
      the Company or the Operating Partnership by virtue of any fiduciary, advisory
      or
      agency relationship; and

     

    (d)        
      each
      of
      the Company and the Operating Partnership waives, to the fullest extent
      permitted by law, any claims it may have against CF&Co, for breach of
      fiduciary duty or alleged breach of fiduciary duty and agrees that CF&Co
      shall have no liability (whether direct or indirect) to the Company or the
      Operating Partnership in respect of such a fiduciary claim or to any person
      asserting a fiduciary duty claim on behalf of or in right of the Company or
      the
      Operating Partnership, including stockholders, partners, employees or creditors
      of the Company or the Operating Partnership.

     

    19.        
      Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument. Delivery of an executed Agreement by one party to the other may
      be
      made by facsimile transmission.

     

    20.        
      Definitions.
      As used
      in this Agreement, the following terms have the respective meanings set forth
      below:

     

    (a)         
      “Applicable
      Time”
means
      the time of each sale of any Shares or any securities pursuant to this
      Agreement.

     

    (b)        
      “GAAP”
means
      United States generally accepted accounting principles.

     

    (c)        
      “Organizational
      Documents”
means
      (a) in the case of a corporation, its charter and by-laws; (b) in the
      case of a limited or general partnership, its partnership certificate,
      certificate of formation or similar organizational document and its partnership
      agreement; (c) in the case of a limited liability company, its articles of
      organization, certificate of formation or similar organizational documents
      and
      its operating agreement, limited liability company agreement, membership
      agreement or other similar agreement; (d) in the case of a trust, its
      certificate of trust, certificate of formation or similar organizational
      document and its trust agreement or other similar agreement; and (e) in the
      case of any other entity, the organizational and governing documents of such
      entity.

     

    

    [Remainder
      of Page Intentionally Blank]

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    If
      the
      foregoing correctly sets forth the understanding among the Company, the
      Operating Partnership and CF&Co, please so indicate in the space provided
      below for that purpose, whereupon this letter shall constitute a binding
      agreement between the Company, the Operating Partnership and CF&Co.

     

    
      	 	
              Very
                truly yours,

            
	 	 	 
	 	 	 
	 	
              HERSHA
                HOSPITALITY TRUST

            
	 	 	 
	 	
              By:

            	 
	 	 	
              Name:

            
	 	 	
              Title:

            

    

     

    
      
        	 	
                HERSHA
                  HOSPITALITY LIMITED PARTNERSHIP

              
	 	 	 
	 	
                By:

              	Hersha
                Hospitality Trust, its general
                partner
	 	 	 
	 	 	 
	 	 	
                Name:

              
	 	 	
                Title:

              

      

    

     

    
      	 	
              ACCEPTED
                as of the date first-above written:

            
	 	 	 
	 	
              CANTOR
                FITZGERALD & CO.

            
	 	 	 
	 	 	 
	 	
              By:
                

            	
               

            
	 	
              Name:

            	 
	 	
              Title:Exhibit
      4.1

     

    Quantitative
      Methods Corporation

     

    2007
      EMPLOYEE AND CONSULTANT STOCK INCENTIVE PLAN

    

    AS
      ADOPTED MARCH 26, 2007

     

    1.
       PURPOSE.

    

      The
      purpose of this Plan is to provide incentives to attract, retain and motivate
      eligible persons and consultants whose present and potential contributions
      are
      important to the success of the Company, its Parent and Subsidiaries, by
      offering them an opportunity to participate in the Company's future performance
      through awards of Options, Restricted Stock and Stock Bonuses. Capitalized
      terms
      not defined in the text are defined in Section 2.

     

    2. 
       DEFINITIONS.

     

    As
      used
      in this Plan, the following terms will have the following
      meanings:   "AWARD"
      means any award under this Plan, including any Option, Restricted
      Stock or Stock Bonus.

     

    "AWARD
      AGREEMENT" means, with respect to each Award, the signed written agreement
      between the Company and the Participant setting forth the terms and conditions
      of the Award.

     

    "BOARD"
      means the Board of Directors of the Company.

     

    "CAUSE" means
      any cause, as defined by applicable law, for the termination
      of a Participant's employment with the Company or a Parent or Subsidiary of
      the
      Company.

     

    "CODE"
      means the Internal Revenue Code of 1986, as amended.

     

    "COMPANY"
      means Quantitative Methods Corporation, a Nevada corporation, or any successor
      corporation.

     

    “DEBT
      OBLIGATION” means any obligation of the Company to a Participant (including an
      Insider) for services rendered to the Company.

     

    "DISABILITY"
      means a disability, whether temporary or permanent, partial or total, as
      determined by the Board.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    "EXCHANGE
      ACT" means the Securities Exchange Act of 1934, as amended.

     

    “EXCHANGE
      PRICE” means the price at which Shares are exchanged with holders of Debt
      Obligations.

     

    "EXERCISE
      PRICE" means the price at which a holder of an Option may purchase the Shares
      issuable upon exercise of the Option.

     

    "FAIR
      MARKET VALUE" means, as of any date, the value of a share of the Company's
      Common Stock determined as follows:

     

    (a)
      if
      such Common Stock is publicly traded and  is
      then
      listed on a national securities exchange, its closing price on the date of
      determination on the principal national securities exchange on which the Common
      Stock is listed or admitted to trading as reported in The Wall Street
      Journal;

     

    (b)
      if
      such Common Stock is quoted on the NASDAQ National Market, its closing price
      on
      the NASDAQ National Market on the date of determination as reported in The
      Wall
      Street Journal;

    

    (c)
      if
      such Common Stock is publicly traded but  is
      not
      listed or admitted to trading on a national securities exchange, the average
      of
      the closing bid and asked prices on the date of determination as reported by
      Bloomberg, L.P.;

    

    (d)
      in
      the case of an Award made on the Effective Date, the price per share at which
      shares of the Company's Common Stock are initially offered for sale to the
      public by the Company's underwriters in the initial public offering of the
      Company's Common Stock pursuant to a registration statement filed with the
      SEC
      under the Securities Act; or

    

    (e)
      if
      none of the foregoing is applicable, by the Board in good faith.

     

    "INSIDER"
      means an officer or director of the Company or any other person whose
      transactions in the Company's Common Stock are subject to Section 16 of the
      Exchange Act.

     

    "OPTION"
      means an award of an option to purchase Shares pursuant to Section
      6.

     

    "PARENT"
      means any corporation (other than the Company) in an unbroken chain of
      corporations ending with the Company if each of such corporations other than
      the
      Company owns stock possessing  50% or more of the total combined voting
      power of all classes of stock in one of the other corporations in such
      chain.

     

    "PARTICIPANT"
      means a person who receives an Award under this Plan.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    "PERFORMANCE
      FACTORS" means the factors selected by the Board, in its sole and absolute
      discretion, from among the following measures to determine whether the
      performance goals applicable to Awards have been satisfied:

    

    (a)
      Net
      revenue and/or net revenue growth;

     

    (b)
      Earnings before income taxes and amortization and/or earnings before income
       taxes
      and
      amortization growth;

     

    (c)
      Operating income and/or operating income growth;

     

    (d)
      Net
      income and/or net income growth;

     

    (e)
      Earnings per share and/or earnings per share growth;

     

    (f)
      Total
      stockholder return and/or total stockholder return growth;

     

    (g)
      Return on equity;

     

    (h)
      Operating cash flow return on income;

     

    (i)
      Adjusted operating cash flow return on income;

     

    (j)
      Economic value added; and

     

    (k)
      Individual confidential business objectives.

     

    "PERFORMANCE
      PERIOD" means the period of service determined by the Board, not to exceed
      five
      years, during which years of service or performance is to be measured for
      Restricted Stock Awards or Stock Bonuses.

     

    "PLAN"
      means this Quantitative Methods Corporation 2007 Employee and Consultant Stock
      Incentive Plan, as amended from time to time.

     

    "RESTRICTED
      STOCK AWARD" means an award of Shares pursuant to Section 7.

     

    "SEC"
      means the Securities and Exchange Commission.

     

    "SECURITIES
      ACT" means the Securities Act of 1933, as amended.

    

    "SHARES"
      means shares of the Company's Common Stock reserved for issuance under this
      Plan, as adjusted pursuant to Sections 3 and 19, and any successor
      security.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    "STOCK
      BONUS" means an award of Shares, or cash in lieu of Shares, pursuant to Section
      8.

    

    "SUBSIDIARY"
      means any corporation (other than the Company) in an unbroken chain of
      corporations beginning with the Company if each of the corporations other than
      the last corporation in the unbroken chain owns stock possessing 50% or more
      of
      the total combined voting power of all classes of stock in one of the other
      corporations in such chain.

    

    "TERMINATION"
      or "TERMINATED" means, for purposes of this Plan with respect to a Participant,
      that the Participant has for any reason ceased to provide services as an
      employee, officer, director, consultant, independent contractor, or advisor
      to
      the Company or a Parent or Subsidiary of the Company. An employee will not
      be
      deemed to have ceased to provide services in the case of (i) sick leave, (ii)
      military leave, or (iii) any other leave of absence approved by the Company,
      provided that such leave is for a period of not more than 90 days, unless
      reemployment upon the expiration of such leave is guaranteed by contract or
      statute or unless provided otherwise pursuant to a formal policy adopted from
      time to time by the Company and issued and promulgated to employees in writing.
      In the case of any employee on an approved leave of absence, the Board may
      make
      such provisions respecting suspension of vesting of the Award while on leave
      from the employ of the Company or a Subsidiary as it may deem appropriate,
      except that in no event may an Option be exercised after the expiration of
      the
      term set forth in the Option agreement. The Board will have sole discretion
      to
      determine whether a Participant has ceased to provide services and the effective
      date on which the Participant ceased to provide services ("TERMINATION
      DATE").

    

    "UNVESTED
      SHARES" means "Unvested Shares" as defined in the Award Agreement.

    

    "VESTED
      SHARES" means "Vested Shares" as defined in the Award Agreement.

    

    3.
       SHARES
      SUBJECT TO THE PLAN.

    

    3.1
      NUMBER OF SHARES AVAILABLE. Subject to Sections 3.2 and 19, the total aggregate
      number of Shares reserved and available for grant and issuance pursuant to
      this
      Plan will be 7,000,000 plus Shares that are subject to: (a) issuance upon
      exercise of an Option but cease to be subject to such Option for any reason
      other than exercise of such Option; (b) an Award granted hereunder but forfeited
      or repurchased by the Company at the original issue price; and (c) an Award
      that
      otherwise terminates without Shares being issued. At all times the Company
      shall
      reserve and keep available a sufficient number of Shares as shall be required
      to
      satisfy the requirements of all outstanding Options granted under this Plan
      and
      all other outstanding but unvested Awards granted under this Plan.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    3.2
      ADJUSTMENT OF SHARES. In the event that the number of outstanding shares is
      changed by a stock dividend, recapitalization, stock split, reverse stock split,
      subdivision, combination, reclassification or similar change in the capital
      structure of the Company without consideration, then (a) the number of Shares
      reserved for issuance under this Plan, (b) the Exercise Prices of and number
      of
      Shares subject to outstanding Options, and (c) the number of Shares subject
      to
      other outstanding Awards will be proportionately adjusted, subject to any
      required action by the Board or the stockholders of the Company and compliance
      with applicable securities laws; provided, however, that fractions of a Share
      will not be issued but will either be replaced by a cash payment equal to the
      Fair Market Value of such fraction of a Share or will be rounded up to the
      nearest whole Share, as determined by the Board.

     

    3.3
      LIMITATION ON TOTAL NUMBER OF SHARES ISSUABLE UNDER THE PLAN. In order to comply
      with the California Code of Regulations, the Company will insure that at no
      time
      shall the total number of Shares issuable under this Plan and upon the exercise
      of all outstanding options and the total number of shares provided for under
      this Plan and any other Company plan or agreement of the Company exceed the
      applicable percentage as calculated in accordance with the conditions and
      exclusions of regulation 260.140.45 of Rules of the California Corporations
      Commissioner.

     

    4.
       ELIGIBILITY.

    

      ISOs
      (as
      defined in Section 6 below) may be granted only to employees (including officers
      and directors who are also employees) of the Company or of a Parent or
      Subsidiary of the Company. All other Awards may be granted to employees,
      officers, directors, consultants, independent contractors and advisors of the
      Company or any Parent or Subsidiary of the Company; provided such consultants,
      contractors and advisors render bona fide services not in connection with the
      offer and sale of securities in a capital-raising transaction.

    

    5.
       ADMINISTRATION.

    

    5.1
      BOARD
      AUTHORITY. This Plan will be administered by the Board. Subject to the general
      purposes, terms and conditions of this Plan, the Board will have full power
      to
      implement and carry out this Plan. Without limitation, the Board will have
      the
      authority to:

    

    (a)
       construe
      and interpret this Plan, any Award Agreement and any other agreement or document
       executed
      pursuant to this Plan;

    

    (b)
       prescribe,
      amend and rescind rules and regulations relating to this Award;

     

    
      
        
        

      

      
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       (c)
       select
      persons to receive Awards;

    

       (d)
       determine
      the form and terms of Awards;

    

    (e)
       determine
      the number of Shares or other consideration subject to Awards;

    

    (f)
      determine whether Awards will be granted singly, in combination with, in tandem
      with, in replacement of, or as alternatives to, other Awards under this Plan
      or
      any other incentive or compensation plan of the Company or any Parent or
      Subsidiary of the Company;

    

     
       (g)
       grant
      waivers of Plan or Award conditions;

    

       (h)
       
      determine the vesting, ability to exercise and payment of Awards;

    

    (i)
       
      correct
      any defect, supply any omission or reconcile any inconsistency in this Plan,
      any
      Award or any Award Agreement;

    

     
       (j)
       determine
      whether an Award has been earned; 

    

    and

    

    (k) make
      all
      other determinations necessary or advisable for the administration of this
      Plan.

     

    5.2
      BOARD
      DISCRETION. Any determination made by the Board with respect to any Award will
      be made at the time of grant of the Award or, unless in contravention of any
      express term of this Plan or Award, at any later time, and such determination
      will be final and binding on the Company and on all persons having an interest
      in any Award under this Plan. The Board may delegate to one or more officers
      of
      the Company the authority to grant an Award under this Plan to Participants
      who
      are not Insiders of the Company.

    

    6.
       OPTIONS.

    

      The
      Board
      may grant Options to eligible persons and will determine whether such Options
      will be Incentive Stock Options within the meaning of the Code ("ISO") or
      Nonqualified Stock Options ("NQSO"), the number of Shares subject to the Option,
      the Exercise Price of the Option, the period during which the Option may be
      exercised, and all other terms and conditions of the Option, subject to the
      following:

    

    6.1
      FORM
      OF OPTION GRANT. Each Option granted under this Plan will be evidenced by an
      Award Agreement that will expressly identify the Option as an ISO or an NQSO
      (hereinafter referred to as the "STOCK OPTION AGREEMENT"), and will be in such
      form and contain such provisions (which need not be the same for each
      Participant) as the Board may from time to time approve, and which will comply
      with and be subject to the terms and conditions of this Plan.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    6.2
      DATE
      OF GRANT. The date of grant of an Option will be the date on which the Board
      makes the determination to grant such Option, unless otherwise specified by
      the
      Board. The Stock Option Agreement and a copy of this Plan will be delivered
      to
      the Participant within a reasonable time after the granting of the
      Option.

    

    6.3
      EXERCISE PERIOD. Options may be exercisable within the times or upon the events
      determined by the Board as set forth in the Stock Option Agreement governing
      such Option; provided, however, that no Option will be exercisable after the
      expiration of ten (10) years from the date the Option is granted; and provided
      further that no ISO granted to a person who directly or by
      attribution owns more than ten percent (10%) of the total combined voting power
      of all classes of stock of the Company or of any Parent or Subsidiary of the
      Company ("TEN PERCENT STOCKHOLDER") will be exercisable after the expiration
      of
      five (5) years from the date the ISO is granted. The Board also may provide
      for
      Options to become exercisable at one time or from time to time, periodically
      or
      otherwise, in such number of Shares or percentage of Shares as the Board
      determines. All Options granted hereunder shall grant the Participants the
      right
      to exercise their Options at the rate of at least 20% per year for five years,
      subject to the continued employment of the Participant by the
      Company.

    

    6.4
      EXERCISE PRICE. The Exercise Price of an Option will be determined by the Board
      when the Option is granted and may be not less than 85% of the Fair Market
      Value
      of the Shares on the date of grant; provided that: (a) the Exercise Price of
      an
      ISO will be not less than 100% of the Fair Market Value of the Shares on the
      date of grant; and (b) the Exercise Price of any ISO granted to a Ten Percent
      Stockholder will not be less than 110% of the Fair Market Value of the Shares
      on
      the date of grant. Payment for the Shares purchased may be made in accordance
      with Section 9 of this Plan.

    

    6.5
      METHOD OF EXERCISE. Options may be exercised only by delivery to the Company
      of
      a written stock option exercise agreement ("EXERCISE AGREEMENT") in a form
      approved by the Board, (which need not be the same for each Participant),
      stating the number of Shares being purchased, the restrictions imposed on the
      Shares purchased under such Exercise Agreement, if any, and such representations
      and agreements regarding Participant's investment intent and access to
      information and other matters, if any, as may be required or desirable by the
      Company to comply with applicable securities laws, together with payment in
      full
      of the Exercise Price for the number of Shares being purchased.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    6.6
      TERMINATION. Notwithstanding the exercise periods set forth in the Stock Option
      Agreement, exercise of an Option will always be subject to the
      following:

    

    (a)
      If
      the Participant's service is Terminated for any reason except death or
      Disability, then the Participant may exercise such Participant's Options only
      to
      the extent that such Options would have been exercisable upon the Termination
      Date no later than three (3) months after the Termination Date(or such shorter
      or longer time period not exceeding five (5) years as may be determined by
      the
      Board, with any exercise beyond three (3) months after the Termination Date
      deemed to be an NQSO), but in any event, no later than the expiration date
      of
      the Options.

    

    (b)
      If
      the Participant's service is Terminated because of Participant's death or
      Disability (or the Participant dies within three (3) months after a Termination
      other than for Cause or because of Participant's Disability), then Participant's
      Options may be exercised only to the extent that such Options would have been
      exercisable by Participant on the Termination Date and must be exercised by
      Participant (or Participant's legal representative or authorized assignee)
      no
      later than twelve (12) months after the Termination Date (or such shorter or
      longer time period not exceeding five (5) years as may be determined by the
      Board, with any such exercise beyond (i) three (3) months after the Termination
      Date when the Termination is for any reason other than the Participant's death
      or Disability, or (ii) twelve (12) months after the Termination Date when the
      Termination is for Participant's death or Disability, deemed to be an NQSO),
      but
      in any event no later than the expiration date of the Options.

    

    (c)
      Notwithstanding the provisions in paragraph 6.6(a) above, if a Participant's
      service is Terminated for Cause, neither the Participant, the Participant's
      estate nor such other person who may then hold the Option shall be entitled
      to
      exercise any Option with respect to any Shares whatsoever, after Termination,
      whether or not after Termination the Participant may receive
      payment
      from the Company or Subsidiary for vacation pay, for services rendered prior
      to
      Termination, for services rendered for the day on which Termination occurs,
      for
      salary in lieu of notice, or for any other benefits. For the purpose of this
      paragraph, Termination shall be deemed to occur on the date when the Company
      dispatches notice or advice to the Participant that his service is
      Terminated.

    

    6.7
      LIMITATIONS ON EXERCISE. The Board may specify a reasonable minimum number
      of
      Shares that may be purchased on any exercise of an Option, provided that such
      minimum number will not prevent Participant from exercising the Option for
      the
      full number of Shares for which it is then exercisable.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    6.8
      LIMITATIONS ON ISO. The aggregate Fair Market Value (determined as of the date
      of grant) of Shares with respect to which ISO are exercisable for the first
      time
      by a Participant during any calendar year (under this Plan or under any other
      incentive stock option plan of the Company, Parent or Subsidiary of the Company)
      will not exceed $100,000. If the Fair Market Value of Shares on the date of
      grant with respect to which ISO are exercisable for the first time by a
      Participant during any calendar year exceeds $100,000, then the Options for
      the
      first $100,000 worth of Shares to become exercisable in such calendar year
      will
      be ISO and the Options for the amount in excess of $100,000 that become
      exercisable in that calendar year will be NQSO. In the event that the Code
      or
      the regulations promulgated thereunder are amended after the Effective Date
      of
      this Plan to provide for a different limit on the Fair Market Value of Shares
      permitted to be subject to ISO, such different limit will be automatically
      incorporated herein and will apply to any Options granted after the effective
      date of such amendment.

    

    6.9
      MODIFICATION, EXTENSION OR RENEWAL. The Board may modify, extend or renew
      outstanding Options and authorize the grant of new Options in substitution
      therefor, provided that any such action may not, without the written consent
      of
      a Participant, impair any of such Participant's rights under any Option
      previously granted. Any outstanding ISO that is modified, extended, renewed
      or
      otherwise altered will be treated in accordance with Section 424(h) of the
      Code.
      The Board may reduce the Exercise Price of outstanding Options without the
      consent of Participants affected by a written notice to them; provided, however,
      that the Exercise Price may not be reduced below the minimum Exercise Price
      that
      would be permitted under Section 6.4 of this Plan for Options granted on the
      date the action is taken to reduce the Exercise Price.

    

    6.10
      NO
      DISQUALIFICATION. Notwithstanding any other provision in this Plan, no term
      of
      this Plan relating to ISO will be interpreted, amended or altered, nor will
      any
      discretion or authority granted under this Plan be exercised, so as to
      disqualify this Plan under Section 422 of the Code or, without the consent
      of
      the Participant affected, to disqualify any ISO under Section 422 of the
      Code.

    

    7.
       RESTRICTED
      STOCK.

    

    A
      Restricted Stock Award is an offer by the Company to sell to an eligible person
      Shares that are subject to restrictions. The Board will determine to whom an
      offer will be made, the number of Shares the person may purchase, the price
      to
      be paid (the "PURCHASE PRICE"), the restrictions to which the Shares will be
      subject, and all other terms and conditions of the Restricted Stock Award,
      subject to the following:

    

    7.1
      FORM
      OF RESTRICTED STOCK AWARD. All purchases under a Restricted Stock Award made
      pursuant to this Plan will be evidenced by an Award Agreement ("RESTRICTED
      STOCK
      PURCHASE AGREEMENT") that will be in such form (which need not be the same
      for
      each Participant) as the Board will from time to time approve,
      and will comply with and be subject to the terms and conditions of this Plan.
      The offer of Restricted Stock will be accepted by the Participant's execution
      and delivery of the Restricted Stock Purchase Agreement and full payment for
      the
      Shares to the Company within thirty (30) days from the date the Restricted
      Stock
      Purchase Agreement is delivered to the person. If such person does not execute
      and deliver the Restricted Stock Purchase Agreement along with full payment
      for
      the Shares to the Company within thirty (30) days, then the offer will
      terminate, unless otherwise extended by the Board.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    7.2
      PURCHASE PRICE. The Purchase Price of Shares sold pursuant to a Restricted
      Stock
      Award will be determined by the Board on the date the Restricted Stock Award
      is
      granted, except in the case of a sale to a Ten Percent Stockholder, in which
      case the Purchase Price will be 100% of the Fair Market Value. Payment of the
      Purchase Price must be made in accordance with Section 9 of this
      Plan.

    

    7.3
      TERMS
      OF RESTRICTED STOCK AWARDS. Restricted Stock Awards shall be subject to such
      restrictions as the Board may impose. These restrictions may be based upon
      completion of a specified number of years of service with the Company or upon
      completion of the performance goals as set out in advance in the Participant's
      individual Restricted Stock Purchase Agreement. Restricted Stock Awards may
      vary
      from Participant to Participant and between groups of Participants. Prior to
      the
      grant of a Restricted Stock Award, the Board shall: (a) determine the nature,
      length and starting date of any Performance Period for the Restricted Stock
      Award; (b) select from among the Performance Factors to be used to measure
      performance goals, if any; and (c) determine the number of Shares that may
      be
      awarded to the Participant. Prior to the payment of any Restricted Stock Award,
      the Board shall determine the extent to which such Restricted Stock Award has
      been earned. Performance Periods may overlap and Participants may participate
      simultaneously with respect to Restricted Stock Awards that are subject to
      different Performance Periods and have different performance goals and other
      criteria.

    

    7.4
      TERMINATION DURING PERFORMANCE PERIOD. If a Participant is Terminated during
      a
      Performance Period for any reason, then such Participant will be entitled to
      payment (whether in Shares, cash or otherwise) with respect to the Restricted
      Stock Award only to the extent earned as of the date of Termination in
      accordance with the Restricted Stock Purchase Agreement, unless the Board
      determines otherwise.

    

    7.5
      “RESTRICTED STOCK MEANS.” “Restricted Stock” as used in this Plan means Shares
      that are subject to restrictions imposed by this Plan and not by restrictions
      required by the Securities Act and, therefore, “Restricted Stock” is not
      intended to be the same as “Restricted Securities” under the Securities
      Act.

     

    
      
        
        

      

      
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      8.
        STOCK
        BONUSES.

    8.1
      AWARDS OF STOCK BONUSES. A Stock Bonus is an award of Shares (which may consist
      of Restricted Stock) for extraordinary services rendered to the Company or
      any
      Parent or Subsidiary of the Company. A Stock Bonus will be awarded pursuant
      to
      an Award Agreement ("STOCK BONUS AGREEMENT") that will be in such form (which
      need not be the same for each Participant) as the Board will from time to time
      approve, and will comply with and be subject to the terms and conditions of
      this
      Plan. A Stock Bonus may be awarded upon satisfaction of such performance goals
      as are set out in advance in the Participant's individual Award Agreement
      ("PERFORMANCE STOCK BONUS AGREEMENT") that will be in such form (which need
      not
      be the same for each Participant) as the Board will from time to time approve,
      and will comply with and be subject to the terms and conditions of this Plan.
      Stock Bonuses may vary from Participant to Participant and between groups of
      Participants, and may be based upon the achievement of the Company, Parent
      or
      Subsidiary and/or individual performance factors or upon such other criteria
      as
      the Board may determine. 

    

    8.2
      TERMS
      OF STOCK BONUSES. The Board will determine the number of Shares to be awarded
      to
      the Participant. If the Stock Bonus is being earned upon the satisfaction of
      performance goals pursuant to a Performance Stock Bonus Agreement, then the
      Board will: (a) determine the nature, length and starting date of any
      Performance Period for each Stock Bonus; (b) select from among the Performance
      Factors to be used to measure the performance, if any; and (c) determine the
      number of Shares that may be awarded to the Participant. Prior to the payment
      of
      any Stock Bonus, the Board shall determine the extent to which such Stock
      Bonuses have been earned. Performance Periods may overlap and Participants
      may
      participate simultaneously with respect to Stock Bonuses that are subject to
      different Performance Periods and different performance goals and other
      criteria. The number of Shares may be fixed or may vary in accordance with
      such
      performance goals and criteria as may be determined by the Board. The Board
      may
      adjust the performance goals applicable to the Stock Bonuses to take into
      account changes in law and accounting or tax rules and to make such adjustments
      as the Board deems necessary or appropriate to reflect the impact of
      extraordinary or unusual items, events or circumstances to avoid windfalls
      or
      hardships.

    

    8.3
      FORM
      OF PAYMENT. The earned portion of a Stock Bonus may be paid to the Participant
      by the Company either currently or on a deferred basis, with such interest
      or
      dividend equivalent, if any, as the Board may determine. Payment may be made
      in
      the form of cash or whole Shares or a combination thereof, either in a lump
      sum
      payment or in installments, all as the Board will determine.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    9.
       PAYMENT
      FOR SHARE PURCHASES.

    

    9.1
      PAYMENT. Payment for Shares purchased pursuant to this Plan may be made in
      cash
      (by check) or, where expressly approved for the Participant by the Board and
      where permitted by law:

    

       (a)
      by
      cancellation of indebtedness of the  Company
      to the Participant;

    

    (b)
      by
      surrender of shares that either: (1) have been owned by Participant for more
      than one  year
      and
      have been paid for within the meaning of Rule 144 of the Securities Act of
      1933
      (and, if such shares were purchased from the Company by use of a promissory
      note, such note has been fully paid with respect to such shares); or (2) were
      obtained by Participant in the public market;

    

    (c)
      by
      waiver of compensation due or accrued to  the
      Participant for services rendered;

    

    (d)
      with
      respect only to purchases upon exercise  of
      an
      Option, and provided that a public market for the Company's stock
      exists:

    

    (1)
      through a "same day sale" commitment from the Participant and a broker-dealer
      that is a member of the National Association of Securities Dealers (an "NASD
      DEALER") whereby the Participant irrevocably elects to exercise the Option
      and
      to sell a portion of the Shares so purchased to pay for the Exercise Price,
      and
      whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
      forward the Exercise Price directly  to
      the
      Company; or

    

    (2)
      through a "margin" commitment from the Participant and a NASD Dealer
 whereby
      the Participant irrevocably elects to exercise the Option and to pledge the
      Shares so purchased to the NASD Dealer in a margin account as security for
      a
      loan from the NASD Dealer in the amount of the Exercise Price, and whereby
      the
 NASD
      Dealer irrevocably commits upon receipt of such Shares to forward the Exercise
      Price directly to the Company; or

    

     
       (e)
      by
      any combination of the foregoing.

    

    10.
       WITHHOLDING
      TAXES.

    

    10.1
      WITHHOLDING GENERALLY. Whenever Shares are to be issued in satisfaction of
      Awards granted under this Plan, the Company may require the Participant to
      remit
      to the Company an amount sufficient to satisfy federal, state and local
      withholding tax requirements prior to the delivery of any certificate or
      certificates for such Shares. Whenever, under this Plan, payments in
      satisfaction of Awards are to be made in cash, such payment will be net of
      an
      amount sufficient to satisfy federal, state, and local withholding tax
      requirements.

     

    
      
        
        

      

      
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    10.2
      STOCK WITHHOLDING. When, under applicable tax laws, a participant incurs tax
      liability in connection with the exercise or vesting of any Award that is
      subject to tax withholding and the Participant is obligated to pay the Company
      the amount required to be withheld, the Board may allow the Participant to
      satisfy the minimum withholding tax obligation by electing to have the Company
      withhold from the Shares to be issued that number of Shares having a Fair Market
      Value equal to the minimum amount required to be withheld, determined on the
      date that the amount of tax to be withheld is to be determined. All elections
      by
      a Participant to have Shares withheld for this purpose will be made in
      accordance with the requirements established by the Board and be in writing
      in a
      form acceptable to the Board.

    

    11.
       PRIVILEGES
      OF STOCK OWNERSHIP.

    

    11.1
      VOTING AND DIVIDENDS. No Participant will have any of the rights of a
      stockholder with respect to any Shares until the Shares are issued to the
      Participant. After Shares are issued to the Participant, the Participant will
      be
      a stockholder and will have all the rights of a stockholder with respect to
      such
      Shares, including the right to vote and receive all dividends or other
      distributions made or paid with respect to such Shares; provided, that if such
      Shares are Restricted Stock, then any new, additional or different securities
      the Participant may become entitled to receive with respect to such Shares
      by
      virtue of a stock dividend, stock split or any other change in the corporate
      or
      capital structure of the Company will be subject to the same restrictions as
      the
      Restricted Stock; provided, further, that the Participant will have no right
      to
      retain such stock dividends or stock distributions with respect to Shares that
      are repurchased at the Participant's Purchase Price or Exercise Price pursuant
      to Section 13.

    

    11.2
      FINANCIAL STATEMENTS. Pursuant to regulation 260.140.46 of the Rules of the
      California Corporations Commissioner, the Company will provide financial
      statements to each Participant prior to such Participant's purchase of Shares
      under this Plan, and to each Participant annually during the period such
      Participant has Awards outstanding; provided, however, the Company will not
      be
      required to provide such financial statements to Participants whose services
      in
      connection with the Company assure them access to equivalent information.

     

    12.
       TRANSFERABILITY.

    

      Awards
      granted under this Plan, and any interest therein, will not be transferable
      or
      assignable by Participant, and may not be made subject to execution, attachment
      or similar process, other than by will or by the laws of descent and
      distribution. During the lifetime of the Participant an Award will be
      exercisable only by the Participant. During the lifetime of the Participant,
      any
      elections with respect to an Award may be made only by the Participant unless
      otherwise determined by the Board and set forth in the Award Agreement with
      respect to Awards that are not ISOs.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    13.
       RESTRICTIONS
      ON SHARES.

    

      At
      the
      discretion of the Board, the Company may reserve to itself and/or its
      assignee(s) in the Award Agreement a right to repurchase a portion of or all
      Unvested Shares held by a Participant following such Participant's Termination
      at any time within ninety (90) days after the later of (a) Participant's
      Termination Date, or (b) the date Participant purchases Shares under this Plan.
      Such repurchase by the Company shall be for cash and/or cancellation of purchase
      money indebtedness, and the price per share shall be the Participant's Exercise
      Price or the Purchase Price, as applicable; provided that the Company’s right to
      repurchase at the original Purchase Price shall lapse at the rate of 20% of
      Unvested Shares per year over five years from the date the Options were granted
      (without respect to the date the Options were exercised or became
      exercisable).

    

    14.
       CERTIFICATES.

    

      All
      certificates for Shares or other securities delivered under this Plan will
      be
      subject to such stock transfer orders, legends and other restrictions as the
      Board may deem necessary or advisable, including restrictions under any
      applicable federal, state or foreign securities law, or any rules, regulations
      and other requirements of the SEC or any stock exchange or automated quotation
      system upon which the Shares may be listed or quoted.

    

    15.
       ESCROW;
      PLEDGE OF SHARES.

    

      To
      enforce any restrictions on a Participant's Shares, the Board may require the
      Participant to deposit all certificates representing Shares, together with
      stock
      powers or other instruments of transfer approved by the Board appropriately
      endorsed in blank, with the Company or an agent designated by the Company to
      hold in escrow until such restrictions have lapsed or terminated, and the Board
      may cause a legend or legends referencing such restrictions to be placed on
      the
      certificates. Any Participant who is permitted to execute a promissory note
      as
      partial or full consideration for the purchase of
      Shares
      under this Plan will be required to pledge and deposit with the Company all
      or
      part of the Shares so purchased as collateral to secure the payment of
      Participant's obligation to the Company under the promissory note; provided,
      however, that the Board may require or accept other or additional forms of
      collateral to secure the payment of such obligation and, in any event, the
      Company will have full recourse against the Participant under the promissory
      note notwithstanding any pledge of the Participant's Shares or other collateral.
      In connection with any pledge of the Shares, Participant will be required to
      execute and deliver a written pledge agreement in such form as the Board will
      from
      time
      to time approve. The Shares purchased with the promissory note may be released
      from the pledge on a pro rata basis as the promissory note is paid.

     

    
      
        
        

      

      
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    16.
       EXCHANGE
      AND BUYOUT OF AWARDS.

    

      The
      Board
      may, at any time or from time to time, authorize the Company, with the consent
      of the respective Participants, to issue new Awards in exchange for the
      surrender and cancellation of any or all outstanding Awards. The Board
      may at
      any time buy from a Participant an Award previously granted with payment in
      cash, Shares (including Restricted Stock) or other consideration, based on
      such
      terms and conditions as the Board and the Participant may
      agree.

    

    17.
       SECURITIES
      LAW AND OTHER REGULATORY COMPLIANCE.

    

      An
      Award
      will not be effective unless such Award is in compliance with all applicable
      federal and state securities laws, rules and regulations of any governmental
      body, and the requirements of any stock exchange or automated quotation system
      upon which the Shares may then be listed or quoted, as they are in effect on
      the
      date of grant of the Award and also on the date of exercise or other issuance.
      Notwithstanding any other provision in this Plan, the Company will
      have
      no obligation to issue or deliver certificates for Shares under this Plan prior
      to: (a) obtaining any approvals from governmental agencies that the Company
      determines are necessary or advisable; and/or (b) completion of any registration
      or other qualification of such Shares under any state or federal law or ruling
      of any governmental body that the Company determines to be necessary or
      advisable. The Company will be under no obligation to register the Shares with
      the SEC or to effect compliance with the registration, qualification or listing
      requirements of any state securities laws, stock exchange or automated quotation
      system, and the Company will have no liability for any

    inability
      or failure to do so.

    

    18.
       NO
      OBLIGATION TO EMPLOY.

    

      Nothing
      in this Plan or any Award granted under this Plan will confer or be deemed
      to
      confer on any Participant any right to continue in the employ of, or to continue
      any other relationship with, the Company or any Parent or Subsidiary of the
      Company or limit in any way the right of the Company or any Parent or Subsidiary
      of the Company to terminate Participant's employment or other relationship
      at
      any time, with or without cause.

    

    19.
       CORPORATE
      TRANSACTIONS.

    

    19.1
      ASSUMPTION OR REPLACEMENT OF AWARDS BY SUCCESSOR. In the event of (a) a
      dissolution or liquidation of the Company, (b) a merger or consolidation in
      which the Company is not the surviving corporation (other than a merger or
      consolidation with a wholly-owned subsidiary, a reincorporation of the Company
      in a different jurisdiction, or other transaction in which there is no
      substantial change in the stockholders of the Company or their relative stock
      holdings and the Awards granted under this Plan are assumed, converted or
      replaced by the successor corporation, which assumption will be binding on
      all
      Participants), (c) a merger in which the Company is the surviving corporation
      but after which the stockholders of the Company immediately prior to such merger
      (other than any stockholder that merges, or which owns or controls another
      corporation that merges, with the Company in such merger) cease to own their
      shares or other equity interest in the Company, (d) the sale of substantially
      all of the assets of the Company, or (e) the acquisition, sale, or transfer
      of
      more than 50% of the outstanding shares of the Company by tender offer or
      similar transaction, any or all outstanding Awards may be assumed, converted
      or
      replaced by the successor corporation (if any), which assumption, conversion
      or
      replacement will be binding on all Participants. In the alternative, the
      successor corporation may substitute equivalent Awards or provide substantially
      similar consideration to Participants as was provided to stockholders (after
      taking into account the existing provisions of the Awards). The successor
      corporation may also issue, in place of outstanding Shares of the Company held
      by the Participant, substantially similar shares or other property subject
      to
      repurchase restrictions no less favorable to the Participant. In the event
      such
      successor corporation (if any) refuses to assume or substitute Awards, as
      provided above, pursuant to a transaction described in this Subsection
      19.1,
      such
      Awards will expire on such transaction at such time and on such conditions
      as
      the Board will determine. Notwithstanding anything in this Plan to the contrary,
      the Board may provide that the vesting of any or all Awards granted pursuant
      to
      this Plan will accelerate upon a transaction described in this Section 19.
      If
      the Board exercises such discretion with respect to Options, such Options will
      become exercisable in full prior to the consummation of such event at such
      time
      and on such conditions as the Board determines, and if such Options are not
      exercised prior to the consummation of the corporate transaction, they shall
      terminate at such time as determined by the Board.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    

    19.2
      OTHER TREATMENT OF AWARDS. Subject to any greater rights granted to Participants
      under the foregoing provisions of this Section 19, in the event of the
      occurrence of any transaction described in Section 19.1, any outstanding Awards
      will be treated as provided in the applicable agreement or plan of merger,
      consolidation, dissolution, liquidation, or sale of assets.

    

    19.3
      ASSUMPTION OF AWARDS BY THE COMPANY. The Company, from time to time, also may
      substitute or assume outstanding awards granted by another company, whether
      in
      connection with an acquisition of such other company or otherwise, by either:
      (a) granting an Award under this Plan in substitution of such other company's
      award; or (b) assuming such award as if it had been granted under this Plan
      if
      the terms of such assumed award could be applied to an Award granted under
      this
      Plan. Such substitution or assumption will be permissible if the holder of
      the
      substituted or assumed award would have been eligible to be granted an Award
      under this Plan if the other company had applied the rules of this Plan to
      such
      grant. In the event the Company assumes an award granted by another company,
      the
      terms and conditions of such award will remain unchanged(except that the
      exercise price and the number and nature of Shares issuable upon exercise of
      any
      such option will be adjusted appropriately pursuant to Section 424(a) of the
      Code). In the event the Company elects to grant a new Option rather than
      assuming an existing option, such new Option may be granted with a similarly
      adjusted Exercise Price.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    

    20.
       ADOPTION
      AND STOCKHOLDER APPROVAL.

    

      This
      Plan
      will become effective on the date on which it is adopted by the Board
      ("EFFECTIVE DATE"). This Plan shall be approved by the stockholders of the
      Company within twelve (12) months before or after the date this Plan is adopted
      by the Board. Upon the Effective Date, the Board may grant Awards pursuant
      to
      this Plan. In the event that stockholder approval of this Plan is not obtained
      within the time period provided herein, all Awards granted hereunder shall
      be
      cancelled, any Shares issued pursuant to any Awards shall be cancelled and
      any
      purchase of Shares issued hereunder shall be rescinded.

    

    21.
       TERM
      OF
      PLAN/GOVERNING LAW.

    

      Unless
      earlier terminated as provided herein, this Plan will terminate ten (10) years
      from the date this Plan is adopted by the Board or, if earlier, the date of
      stockholder approval. This Plan and all agreements thereunder shall be governed
      by and construed in accordance with the laws of the State of
      Nevada.

    

    22.
      AMENDMENT OR TERMINATION OF PLAN.

    

      The
      Board
      may at any time terminate or amend this Plan in any respect, including without
      limitation amendment of any form of Award Agreement or instrument to be executed
      pursuant to this Plan; provided, however, that the Board will not, without
      the
      approval of the stockholders of the Company, amend this Plan in any manner
      that
      requires such stockholder approval.

    

    23.
       NONEXCLUSIVITY
      OF THE PLAN.

    

      Neither
      the adoption of this Plan by the Board, the submission of this Plan to the
      stockholders of the Company for approval, nor any provision of this Plan will
      be
      construed as creating any limitations on the power of the Board to adopt such
      additional compensation arrangements as it may deem desirable, including,
      without limitation, the granting of stock options and bonuses otherwise than
      under this Plan, and such arrangements may be either generally applicable or
      applicable only in specific cases.

    

    24.
       ACTION
      BY
      BOARD.

    

      Any
      action permitted or required to be taken by the Board or any decision or
      determination permitted or required to be made by the Board pursuant to this
      Plan shall be taken or made in the Board's sole and absolute
      discretion.

     

    
      
        
        

      

      
        17

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