Document:

Exhibit 4.5.2

    
      

    

    

      Exhibit
        4.5.2

       

       

      REXAHN
        CORPORATION

      STOCK
        OPTION PLAN

      

      STOCK
        OPTION GRANT AGREEMENT

      

      

      THIS
        AGREEMENT, made as of the ___th day of _________, 200__ (the "Grant Date"),
        by
        and between (i) Rexahn Corporation, a Maryland corporation (the "Company"),
        and
        (ii) ________________, an individual who serves as a [director
        of/consultant to] the Company ("Optionee"). 

       

      WHEREAS,
        the Board of Directors and stockholders of the Company have duly adopted
        and
        approved the Rexahn Corporation Stock Option Plan (the "Plan"); and

       

      WHEREAS,
        in order to provide an incentive to Optionee to serve as a [director
        of/consultant to] the Company and for such other purposes as are set forth
        in
        the Plan, the Committee responsible for administration of the Plan has
        determined to grant an option to Optionee as provided herein.

       

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

       

      
        	 	
                1.

              	
                Grant
                  of Option.

              

      

       

      1.1.  Subject
        to the terms and conditions hereafter set forth including, without limitation,
        Optionee's compliance with Optionee's representations, covenants and agreements
        in Sections 13 through 20 hereof inclusive and Optionee's execution
        contemporaneously with this Agreement of the Stockholder's Agreement of even
        date herewith (the "Stockholder's Agreement"), the Company hereby grants
        to
        Optionee the right and option (the "Option") to purchase all or any part of
        an aggregate of ______ whole shares of Common Stock of the Company (the
        "Shares").

       

      1.2.  This
        Agreement shall be construed in accordance and consistent with, and subject
        to,
        the provisions of the Plan (the provisions of which are incorporated herein
        by
        reference) and, except as otherwise expressly set forth herein, the capitalized
        terms used in this Agreement shall have the same definitions as set forth
        in the
        Plan. In the event any provision of this Agreement shall conflict with any
        of
        the terms in the Plan as constituted on the Grant Date, the terms of the
        Plan as
        constituted on the Grant Date shall control.

       

      
        	 	
                2.

              	
                Purchase
                  Price.

              

      

       

      The
        price
        at which Optionee shall be entitled to purchase the Shares upon the exercise
        of
        the Option shall be $______ per Share (the "Exercise Price"). 

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      

      
        	 	
                3.

              	
                Duration of Option.

              

      

       

      The
        Option shall be exercisable to the extent and in the manner provided herein
        for
        a period of ten (10) years from the Grant Date (the "Exercise Term");
provided,
        however,
        that
        the Option may be terminated earlier, as provided in Sections 5.1, 5.3, 7.1
        and
        22 hereof. 

       

      
        	 	
                4.

              	
                Vesting
                  of Option.

              

      

       

      4.1.  So
        long
        as Optionee shall not have violated the provisions of Sections 13 through
        20
        hereof inclusive, and further subject to the provisions of the Plan and this
        Agreement regarding the duration of the Option and the period during which
        the
        Option may be exercised, except as provided in Section 4.2 hereof, Optionee
        shall become vested in the Shares as follows:

       

      (a)   One
        hundred percent (100%) of the Shares shall vest on the first (1st) anniversary
        of the Grant Date.

       

      Notwithstanding
        Section 4.1 hereof, but subject to the provisions of the Plan and this Agreement
        regarding the duration of the Option and the Period during which the Option
        may
        be exercised, Optionee shall become one hundred percent (100%) vested in
        the
        Shares if any of the following shall occur prior to the termination or
        expiration of the Option: (i) a Qualified Public Offering, as defined in
        Section 4.3 hereof; (ii) an Offer to Buy the Company, which the Majority
        Shareholders desire to accept, as provided in Section 5.1 hereof; or
        (iii) the liquidation, dissolution, merger or consolidation of the Company,
        as provided in Section 5.2 hereof. 

       

      4.2.  For
        purposes of Section 4.2 hereof, a "Qualified Public Offering" shall mean
        the
        first offer for sale of Common Stock of the Company, in any single transaction
        or series of related transactions, pursuant to an effective registration
        filed
        by the Company under the Securities Act of 1933, as amended, in which the
        Company receives aggregate gross proceeds (before deduction of underwriting
        discounts and expenses of sale) of Twenty Million Dollars ($20,000,000).
        

       

      4.3.  For
        purposes of this Agreement, the Shares which are vested are referred to as
        "Vested Shares". The Option may be exercised with respect to the Vested Shares,
        as provided under the applicable provisions of this Agreement. 

       

      
        	 	
                5.

              	
                Effect
                  in Change of Control.

              

      

       

      In
        the
        event of any Change of Control (as defined in the Plan), each outstanding
        Option
        shall automatically accelerate so that each such Option shall, immediately
        prior
        to the effective date of the Change of Control, become fully exercisable
        for all
        of the Shares at the time subject to such Option and may be exercised for
        any or
        all of those Shares as fully-vested Options. However, an outstanding Option
        shall NOT so accelerate if and to the extent such Option is, in connection
        with
        the Change of Control, either to be assumed by the successor corporation
        (or
        parent thereof) or to be replaced with a comparable Option for shares of
        the
        capital stock of the successor corporation (or the parent thereof). The
        determination of Option comparability shall be made by the administrator
        of the
        Plan, and its determination shall be final, binding and
        conclusive.

      
        
          
          

        

        
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                6.

              	
                Manner of Exercise and Payment.

              

      

       

      6.1.  The
        Option may be exercised only if compliance with all applicable Federal and
        state
        securities laws can be effected and only by (a) Optionee's completion, execution
        and delivery to the Company of a Notice of Exercise substantially in the
        form
        attached hereto as Exhibit A and an investment letter (if required by the
        Company) as supplied by the Company, and (b) the payment to the Company,
        by
        check, of an amount equal to the amount obtained by multiplying the Exercise
        Price by the number of Vested Shares being purchased pursuant to such exercise,
        as shall be specified by Optionee in such Notice of Exercise. 

       

      6.2.  Upon
        receipt of Notice of Exercise and full payment of the Exercise Price for
        the
        Vested Shares in respect of which the Option is being exercised, the Company
        shall take such action as may be necessary to effect the transfer to Optionee
        of
        the number of Vested Shares as to which such exercise was
        effective.

       

      6.3.  Optionee
        shall not be deemed to be the owner of any of the Shares unless and until:
        (i)
        the Option shall have been exercised pursuant to the terms of this Agreement
        and
        Optionee shall have paid the full purchase price for the number of Shares
        in
        respect of which the Option was exercised; (ii) Optionee shall have satisfied
        all of Optionee's obligations regarding the withholding of taxes, as provided
        in
        Section 12 hereof; (iii) the Company shall have issued and delivered the
        Vested Shares to Optionee; and (iv) Optionee's name shall have been entered
        as a shareholder of record on the books of the Company, whereupon Optionee
        shall
        have full dividend and other ownership rights with respect to such Shares,
        subject to the terms and conditions of the Stockholder's Agreement.

       

      
        	 	
                7.

              	
                Termination of Engagement.
                  

              

      

       

      7.1.  If
        the
        Optionee's service as [director of/consultant to] the Company shall terminate
        or
        cease for any reason whatsoever, any unexercised portion of the Option (whether
        or not vested and exercisable) shall terminate and expire on the Termination
        Date, after which the Optionee shall have no right to exercise the Option.
        For
        purposes of the foregoing, (i) if Optionee's employment shall be terminated
        for
        Cause (as defined in Section 7.2 hereof), the "Termination Date" shall mean
        the
        effective date of Optionee's termination of employment, or (ii) if Optionee's
        employment shall terminate for any reason other than Cause, the "Termination
        Date" shall mean the date that is thirty (30) days after the effective date
        of
        Optionee's termination of employment. 

       

      7.2.  "Cause"
        shall mean (i) Optionee's conviction of any felony or business related
        misdemeanor; (ii) fraud, theft or embezzlement; (iii) a material act of personal
        dishonesty affecting the Company; (iv) an act of gross neglect or gross
        misconduct; (v) the commission of any other act with the intent to harm or
        injure the Company; or (vi) a material breach of this Agreement.

       

      
        	 	
                8.

              	
                No
                  Pre-Emptive Rights or Registration Rights.

              

      

       

      Optionee
        shall not be entitled to any pre-emptive rights with respect to the Company's
        issuance of any Common Stock or other securities, nor shall Optionee be entitled
        to registration rights with respect to any Shares in the event that the Company
        files a registration statement under the Securities Act of 1933 with respect
        to
        the Common Stock or any other securities. 

      
        
          
          

        

        
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                9.

              	
                Nontransferability.

              

      

       

      The
        Option granted hereunder shall not be transferable by Optionee other than
        by
        will or the laws of descent and distribution and the Option may be exercised
        during the lifetime of Optionee only by Optionee or his or her guardian or
        legal
        representative. The terms of the Option shall be final, binding and conclusive
        upon the beneficiaries, executors, administrators, heirs and successors of
        Optionee.

       

      
        	 	
                10.

              	
                No Right to Continued Service.

              

      

       

      Nothing
        in this Agreement or the Plan shall be interpreted or construed to confer
        upon
        Optionee any right with respect to continuance of the Optionee's service
        to by
        the Company, nor shall this Agreement or the Plan interfere in any way with
        the
        right of the Company to terminate Optionee's service at any time. By Optionee's
        execution of this Agreement, Optionee acknowledges that Optionee's service
        with
        the Company is "at will". No change of Optionee's duties as an non-employee
        director or consultant of the Company shall result in, or be deemed to be,
        a
        modification of any terms of this Agreement.

       

      
        	 	
                11.

              	
                Adjustments.

              

      

       

      In
        the
        event of a reclassification, recapitalization, stock split, stock dividend,
        combination of shares, or other similar event with respect to the Common
        Stock,
        the Committee may make appropriate adjustments to the number and class of
        Shares
        or other stock or securities subject to the Option and the purchase price
        for
        such Shares or other stock or securities. The Committee's adjustment shall
        be made in accordance with the provisions of Section 9 of the Plan
        and shall be effective and final, binding and conclusive for all purposes
        of the Plan and this Agreement.

       

      
        	 	
                12.

              	
                Withholding of Taxes.

              

      

       

      At
        such
        times as Optionee exercises the Option, Optionee shall pay to the Company
        in
        cash an amount equal to the Federal, state and local income taxes and other
        amounts as may be required by law to be withheld by the Company in connection
        with exercise of the Option (the "Withholding Taxes") prior to the issuance
        of
        the Shares in respect of which the Option was exercised. The Company shall
        have
        the right to deduct from any payment of cash to which Optionee is entitled
        from
        the Company an amount equal to the Withholding Taxes in satisfaction of the
        obligation to pay Withholding Taxes. In satisfaction of the Withholding Taxes,
        Optionee may make a written election, which may be accepted or rejected in
        the
        sole discretion of the Committee, to have withheld a portion of the Shares
        issuable to him upon exercise of the Option, having an aggregate Fair Market
        Value, on the date preceding the date of such issuance, equal to the Withholding
        Taxes.

      
        
          
          

        

        
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                13.

              	
                Treatment
                  of Information.
                  

              

      

       

      13.1.    Optionee
        acknowledges that, in and as a result of Optionee's engagement by the Company,
        Optionee shall or may be making use of, acquiring and/or adding to confidential
        information of a special and unique nature and value relating to such matters
        as
        the Company's trade secrets, systems, programs, procedures, manuals,
        confidential reports and communications and lists of customers and clients.
        Optionee further acknowledges that any information and materials received
        by the
        Company from third parties in confidence (or subject to nondisclosure or
        similar
        covenants) shall be deemed to be and shall be confidential information within
        the meaning of this Section 13. As a material inducement to the Company to
        grant
        to Optionee the Option, Optionee covenants and agrees that Optionee shall
        not,
        except with the prior written consent of the Company, or except if Optionee
        is
        acting as an non-employee director or consultant of the Company solely for
        the
        benefit of the Company in connection with the Company's business and in
        accordance with the Company's business practices and employee policies, at
        any
        time during or following the term of Optionee's engagement by the Company,
        directly or indirectly, disclose, divulge, reveal, report, publish, transfer
        or
        use, for any purpose whatsoever, any of such information which has been obtained
        by or disclosed to Optionee as a result of Optionee's engagement with the
        Company, including any of the information referred to in Section 14 hereof.
        

       

      13.2.    Disclosure
        of any of the information referred to in Section 13.1 hereof shall not be
        prohibited if such disclosure is directly related to a valid and existing
        order
        of a court or other governmental body or agency within the United States;
        provided, however, that (i) Optionee shall first have given prompt notice
        to the Company of any possible or prospective order (or proceeding pursuant
        to
        which any such order may result) and (ii) the Company shall have been afforded
        a
        reasonable opportunity to prevent or limit any such disclosure.

       

      
        	 	
                14.

              	
                Definition
                  of Protected Information.

              

      

       

      14.1.    For
        purposes of this Agreement, the term "Protected Information" shall mean all
        of
        the information referred to in Section 13 hereof and all of the following
        materials and information (whether or not reduced to writing and whether
        or not
        patentable or protectible by copyright) which Optionee receives, receives
        access
        to, conceives or develops or has received, received access to, conceived
        or
        developed, in whole or in part, directly or indirectly, in connection with
        Optionee's engagement with the Company or in the course of Optionee's engagement
        with the Company (in any capacity, whether executive, managerial, planning,
        technical, sales, research, development, manufacturing, engineering or
        otherwise) or through the use of any of the Company's facilities or
        resources:

       

      (a) Application,
        operating system, data base, communication and other computer software, whether
        now or hereafter existing, developed for use on any operating system, all
        modifications, enhancements and versions and all options available with respect
        thereto, and all future products developed or derived therefrom;

       

      (b) Source
        and object codes, flowcharts, algorithms, coding sheets, routines, sub-routines,
        compilers, assemblers, design concepts and related documentation and
        manuals;

      
        
          
          

        

        
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      (c) Production
        processes, marketing techniques and arrangements, mailing lists, purchasing
        information, pricing policies, quoting procedures, financial information,
        customer and prospect names and requirements, employee, customer, supplier
        and
        distributor data and other materials or information relating to the Company's
        business and activities and the manner in which the Company does
        business;

       

      (d) Discoveries,
        concepts and ideas including, without limitation, the nature and results
        of
        research and development activities, processes, formulas, inventions,
        computer-related equipment or technology, techniques, "know-how", designs,
        drawings and specifications; 

       

      (e) Any
        other
        materials or information related to the business or activities of the Company
        which are not generally known to others engaged in similar businesses or
        activities; and

       

      (f) All
        ideas
        which are derived from or relate to Optionee's access to or knowledge of
        any of
        the above enumerated materials and information.

       

      14.2.    Failure
        to mark any of the Protected Information as confidential, proprietary or
        Protected Information shall not affect its status as part of the Protected
        Information under the terms of this Agreement.

       

      14.3.    For
        purposes of this Agreement, the term "Protected Information" shall not include
        information which is or becomes publicly available without breach of (i)
        this
        Agreement, (ii) any other agreement or instrument to which the Company is
        a
        party or a beneficiary or (iii) any duty owed to the Company by Optionee or
        any third party; provided, however, that Optionee hereby acknowledges and
        agrees
        that, except as otherwise provided in Section 13.2 hereof, if Optionee shall
        seek to disclose, divulge, reveal, report, publish, transfer or use, for
        any
        purpose whatsoever, any Protected Information, Optionee shall bear the burden
        of
        proving that any such information shall have become publicly available without
        any such breach.

       

      
        	 	
                15.

              	
                Ownership
                  of Information.
                  

              

      

       

      15.1.    Optionee
        covenants and agrees that all right, title and interest in any Protected
        Information shall be and shall remain the exclusive property of the Company;
        provided, however, that the foregoing shall not apply to any invention for
        which
        no equipment, supplies, facility or Protected Information of the Company
        was
        used, which was developed entirely on Optionee's own time, and which does
        not
        (i) relate to the business of the Company, (ii) relate to the Company's actual
        or demonstrably anticipated research or development or (iii) result from
        any work performed by Optionee for the Company. Optionee agrees immediately
        to
        disclose to the Company all Protected Information developed in whole or in
        part
        by Optionee during the term of Optionee's engagement with the Company and
        to
        assign to the Company any right, title or interest Optionee may have in such
        Protected Information. Optionee agrees to execute any instruments and to
        do all
        other things reasonably requested by the Company (both during and after
        Optionee's engagement with the Company) in order to vest more fully in the
        Company all ownership rights in those items hereby transferred by Optionee
        to
        the Company.

      
        
          
          

        

        
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      15.2.    If
        any
        one or more of the items described in Section 15.1 above are protectible
        by
        copyright and are deemed in any way to fall within the definition of "work
        made
        for hire," as such term is defined in 17 U.S.C. §101, such work shall be
        considered a "work made for hire," the copyright of which shall be owned
        solely,
        completely and exclusively by the Company. If any one or more of the
        aforementioned items are protectible by copyright and are not considered
        to be
        included in the categories of works covered by the "work made for hire"
        definition contained in 17 U.S.C. §101, such items shall be deemed to be
        assigned and transferred completely and exclusively to the Company by virtue
        of
        the execution of this Agreement.

       

      
        	 	
                16.

              	
                Materials.
                  

              

      

       

      All
        notes, data, tapes, reference items, sketches, drawings, memoranda, records
        and
        other materials in any way relating to any of the information referred to
        in
        Sections 13 and 14 hereof (including, without limitation, any Protected
        Information) or to the Company's business shall belong exclusively to the
        Company and Optionee agrees to turn over to the Company all copies of such
        materials in Optionee's possession or under Optionee's control at the request
        of
        the Company or, in the absence of such a request, upon the termination of
        engagement of Optionee.

       

      
        	 	
                17.

              	
                Covenants
                  Not to Compete or Hire Employees.
                  

              

      

       

      It
        is
        recognized and understood by the parties hereto that Optionee, through
        Optionee's association with the Company as an non-employee director or
        consultant, shall acquire a considerable amount of knowledge and goodwill
        with
        respect to the business of the Company, which knowledge and goodwill are
        extremely valuable to the Company and which would be extremely detrimental
        to
        the Company if used by Optionee to compete with the Company. It is, therefore,
        understood and agreed by the parties hereto that, because of the nature of
        the
        business of the Company, it is necessary to afford fair protection to the
        Company from such competition by Optionee. Consequently, as a material
        inducement to the Company to grant Optionee the Option, Optionee covenants
        and
        agrees that for the period commencing with the date hereof and ending one
        (1)
        year after Optionee's termination of engagement from the Company for any
        reason
        whatsoever, Optionee shall not (a) engage, directly, indirectly or in concert
        with any other person or entity, in any activity, any service or promote
        any
        product which in any way competes with any service or product provided, sold,
        licensed or promoted by the Company or (b) directly or indirectly, solicit
        or
        divert or attempt to solicit or divert from the Company any customer, client,
        account or business of the Company. Optionee further covenants and agrees
        that
        for the period commencing with the date hereof and ending one (1) year after
        Optionee's termination of engagement from the Company for any reason whatsoever,
        Optionee shall not, directly or indirectly, hire or engage or attempt to
        hire or
        engage any employee of the Company, whether for or on behalf of Optionee
        or for
        any entity in which Optionee shall have a direct or indirect interest (or
        any
        subsidiary or affiliate of any such entity), whether as a proprietor, partner,
        co-venturer, financier, investor or stockholder, director, officer, employer,
        employee, servant, agent, representative or otherwise.

      
        
          
          

        

        
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                18.

              	
                No
                  Prior Agreements.
                  

              

      

       

      Optionee
        represents that Optionee's performance of all the terms of this Agreement
        and
        any services to be rendered as an non-employee director or consultant of
        the
        Company do not and shall not breach any fiduciary or other duty or any covenant,
        agreement or understanding (including, without limitation, any agreement
        relating to any proprietary information, knowledge or data acquired by Optionee
        in confidence, trust or otherwise prior to Optionee's engagement by the Company)
        to which Optionee is a party or by the terms of which Optionee may be bound.
        Optionee covenants and agrees that Optionee shall not disclose to the Company,
        or induce the Company to use, any such proprietary information, knowledge
        or
        data belonging to any previous employer or others. Optionee further covenants
        and agrees not to enter into any agreement or understanding, either written
        or
        oral, in conflict with the provisions of this Agreement.

       

      
        	 	
                19.

              	
                Injunctive
                  Relief.
                  

              

      

       

      Optionee
        understands and agrees that the Company will suffer irreparable harm in the
        event that Optionee breaches any of Optionee's obligations under Sections
        13,
        15, 16, 17 or 18 hereof and that monetary damages will be inadequate to
        compensate the Company for such breach. Accordingly, Optionee agrees that,
        in
        the event of a breach or threatened breach by Optionee of any of the provisions
        of Sections 13, 15, 16, 17 or 18 hereof, the Company, in addition to and
        not in
        limitation of any other rights, remedies or damages available to the Company
        at
        law or in equity, shall be entitled to a temporary restraining order,
        preliminary injunction and permanent injunction in order to prevent or to
        restrain any such breach by Optionee, or by any or all of Optionee's partners,
        co-venturers, employers, employees, servants, agents, representatives and
        any
        and all persons directly or indirectly acting for, on behalf of or with
        Optionee.

       

      
        	 	
                20.

              	
                Accounting
                  for Profits; Indemnification.
                  

              

      

       

      Optionee
        covenants and agrees that, if Optionee shall violate any of Optionee's covenants
        or agreements contained in Sections 13, 15, 16 or 17 hereof, the Company
        shall
        be entitled to an accounting and repayment of all profits, compensation,
        royalties, commissions, remunerations or benefits which Optionee directly
        or
        indirectly shall have realized or may realize relating to, growing out of
        or in
        connection with any such violation; such remedy shall be in addition to and
        not
        in limitation of any injunctive relief or other rights or remedies to which
        the
        Company is or may be entitled at law or in equity or otherwise under this
        Agreement. Optionee hereby agrees to defend, indemnify and hold harmless
        the
        Company against and in respect of: (i) any and all losses and damages
        resulting from, relating or incident to, or arising out of any misrepresentation
        or breach by Optionee of any warranty, covenant or agreement made or contained
        in this Agreement; and (ii) any and all actions, suits, proceedings, claims,
        demands, judgments, costs and expenses (including reasonable attorneys' fees)
        incident to the foregoing.

       

      
        	 	
                21.

              	
                Reasonableness
                  of Restrictions.
                  

              

      

       

      OPTIONEE
        HAS CAREFULLY READ AND CONSIDERED THE PROVISIONS OF SECTIONS 13 THROUGH 20
        HEREOF INCLUSIVE AND, HAVING DONE SO, AGREES THAT THE RESTRICTIONS SET FORTH
        IN
        SUCH SECTIONS ARE FAIR AND REASONABLE AND ARE REASONABLY REQUIRED FOR THE
        PROTECTION OF THE INTERESTS OF THE CORPORATION, AND ITS OFFICERS, DIRECTORS,
        STOCKHOLDERS AND EMPLOYEES. OPTIONEE FURTHER AGREES THAT ALL SUCH PROVISIONS
        ARE
        IN FURTHERANCE AND NOT IN LIMITATION OF ANY OTHER COVENANTS AND RESTRICTIONS
        APPLICABLE TO OPTIONEE.

      
        
          
          

        

        
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              	22.	
                Forfeiture
                  of Right to Exercise Option.
                  

              

      

       

      Any
        breach by Optionee of any of Optionee's representations, covenants or agreements
        in Sections 13 through 20 hereof inclusive shall result in the forfeiture,
        as of
        the date of such breach, of all rights to exercise the Option. 

       

      
        	 	
                23.

              	
                Optionee Bound by the Plan.

              

      

       

      Optionee
        hereby acknowledges receipt of a copy of the Plan and agrees to be bound
        by all
        the terms and provisions thereof.

       

      
        	 	
                24.

              	
                Modification
                  of Agreement.

              

      

       

      This
        Agreement may be modified, amended, suspended or terminated, and any terms
        or
        conditions may be waived, but only by a written instrument executed by the
        parties hereto.

       

      
        	 	
                25.

              	
                Severability.
                  

              

      

       

      Whenever
        possible, each provision in this Agreement shall be interpreted in such manner
        as to be effective and valid under applicable law, but if any provision of
        this
        Agreement shall be held by a court of competent jurisdiction to be prohibited
        by
        or invalid or unenforceable under applicable law, then (a) such provision
        shall be deemed amended to accomplish the objectives of the provision as
        originally written to the fullest extent permitted by law and (b) all other
        provisions of this Agreement shall remain in full force and effect.

       

      
        	 	
                26.

              	
                Governing Law.

              

      

       

      The
        validity, interpretation, construction and performance of this Agreement
        shall
        be governed by the laws of the State of Maryland without giving effect to
        the
        conflicts of laws principles thereof.

       

      
        	 	
                27.

              	
                Successors in Interest.

              

      

       

      This
        Agreement shall inure to the benefit of and be binding upon any successor
        to the
        Company. This Agreement shall inure to the benefit of Optionee's legal
        representatives. All obligations imposed upon Optionee and all rights granted
        to
        the Company under this Agreement shall be final, binding and conclusive upon
        Optionee's heirs, executors, administrators and successors. As used in Sections
        13 through 20 hereof inclusive and this Section 27, the term "Company" shall
        also include any corporation which is a parent or a subsidiary of the Company
        or
        any corporation or entity which is an affiliate of the Company by virtue
        of
        common (although not identical) ownership. Optionee hereby consents to the
        enforcement of any and all of the provisions of this Agreement by or for
        the
        benefit of the Company and any such other corporation or entity.

       

      
        	 	
                28.

              	
                Resolution of Disputes.

              

      

       

      Any
        dispute or disagreement which may arise under, or as a result of, or in any
        way
        relate to, the interpretation, construction or application of this Agreement
        shall be determined by the Committee. Any determination made hereunder shall
        be
        final, binding and conclusive on Optionee and Company for all
        purposes.

      
        
          
          

        

        
          -
            9
            -

          
            

          

        

        
          
          

        

      

      
        	 	
                29.

              	
                Specific
                  Performance.
                  

              

      

       

      Strict
        compliance by Optionee shall be required with each and every provision of
        this
        Agreement and particularly with the procedures set forth in Section 5 hereof.
        The parties hereto agree that the Shares are unique, that Optionee's failure
        to
        perform the obligations provided by this Agreement will result in irreparable
        damage to the Company and that specific performance of Optionee's obligations
        may be obtained by suit in equity.

       

      
        	 	
                30.

              	
                Interpretation.
                  

              

      

       

      30.1.    This
        Agreement, the Plan and the Stockholder's Agreement set forth all of the
        promises, agreements, condi-tions, understandings, warranties and
        representations between the parties hereto with respect to the Option and
        the
        Shares, and there are no promises, agreements, conditions, understandings,
        warranties or representations, oral or written, express or implied, between
        them
        with respect to the Option or the Shares other than as set forth herein and
        in
        the Plan, as amended. Any and all prior agreements between the parties hereto
        with respect to the Shares or the Option are hereby revoked. This Agreement,
        the
        Plan and the Stockholder's Agreement, are intended by the parties to be an
        integration of any and all prior agreements or understandings, oral or written,
        with respect to the Option and the Shares.

       

      30.2.    The
        captions herein are for reference purposes only and in no way define or limit
        the scope or content of this Agreement or in any way affect the interpretation
        of its provisions. 

       

      
        	 	
                31.

              	
                Notices.
                  

              

      

       

      Any
        and
        all notices provided for herein shall be sufficient if in writing and shall
        either be hand delivered, with receipt therefor, or sent by Federal Express
        or
        other nationally recognized courier, or by certified or registered mail,
        postage
        prepaid, return receipt requested, in the case of the Company, to its principal
        office, and, in the case of Optionee, to Optionee's address as shown on the
        Company's records. A notice that is sent by Federal Express or other nationally
        recognized courier or that is sent by certified or registered mail will be
        deemed given on the earlier of the date the notice is received by the addressee
        or three (3) business days after the date the notice is sent. Either party
        may
        change the address to which notices or other communications are to be delivered
        to them hereunder by giving written notice to the other party as provided
        in
        this paragraph. 

       

      IN
        WITNESS WHEREOF, the parties hereto have duly executed and delivered this
        Agreement, or caused this Agreement to be duly executed and delivered in
        their
        name and on their behalf, as of the day and year first above
        written.

      
        
          
          

        

        
          -
            10
            -

          
            

          

        

        
          
          

        

      

       

      
        	 	
                COMPANY:

              
	 	 
	 	
                REXAHN
                  CORPORATION, a Maryland corporation

              
	 	 	 
	 	 	 
	 	
                By:

              	
                  

              
	 	
                Name:

              	
                  

              
	 	
                Title:

              	
                  

              
	 	 	 
	 	
                OPTIONEE:

              
	 	 	 
	 	 	 
	 	
                  

              
	 	 	 
	 	
                Name:

              	
                  

              

      

      

        
          
            
            

          

          
            -
              11
              -

            
              

            

          

          
            
            

          

        

      

       

      EXHIBIT
        A

      

      NOTICE
        AND REQUEST OF EXERCISE

      OF

      OPTION
        TO PURCHASE

      SHARES
        OF STOCK

      OF

      REXAHN
        CORPORATION

      

      The
        undersigned Optionee of the Stock Option Plan (the "Plan") of Rexahn
        Corporation, a Maryland corporation (the "Company"), does by this notice
        request
        that the Company issue to the undersigned that number of Shares specified
        below
        at the price per Share specified below pursuant to the exercise of Optionee's
        Option under the Plan and the Stock Option Grant Agreement (the "Agreement")
        between the undersigned and the Company.

      

      Simultaneously
        herewith, the undersigned delivers to the Company the purchase price for
        the
        Shares (i.e.,
        that
        amount which is obtained by multiplying the number of the Shares in D below
        by
        the price specified), in cash or by good check, in accordance with Section
        6 of
        the Agreement or as otherwise provided under the Plan.

      

      The
        undersigned hereby represents and warrants that the undersigned has read
        and
        understands the Plan and the Agreement and the terms and conditions set forth
        therein under which the Shares are acquired, shall be held and may be disposed,
        and hereby ratifies and confirms such terms and conditions.

      

      The
        undersigned hereby represents and warrants that the undersigned understands
        that
        the undersigned's rights with respect to the Shares being acquired pursuant
        to
        the exercise of the Option are restricted by the terms and conditions of
        a
        Stockholder's Agreement, and hereby ratifies and confirms such terms and
        conditions.

      

      The
        undersigned hereby represents and warrants that the undersigned is acquiring
        the
        Shares for the undersigned's own account (and not on behalf of any other
        persons) and without any present view to making a public offering or
        distribution of same and without any present intention of selling same at
        any
        particular time or at any particular price or upon the occurrence of any
        particular event or circumstances (except as set forth in the Plan and the
        Agreement). The undersigned understands that restrictions on transfer of
        the
        Shares by virtue of securities laws may require that the undersigned hold
        the
        Shares for an indefinite period of time.

      
        
          
          

        

        
          -
            12
            -

          
            

          

        

        
          
          

        

      

      The
        undersigned acknowledges and understands that in connection with the acquisition
        of the Shares by the undersigned: (1) The Company has informed the undersigned
        that the Shares are not registered under the Securities Act of 1933, as amended
        (the "Act"), or the applicable state securities or Blue Sky law or laws and
        that
        the Shares may not be transferred or otherwise disposed of unless the Shares
        are
        subsequently registered under the Act and the applicable state securities
        or
        Blue Sky law or laws or an exemption from such registration requirements
        is
        available; (2) that the Shares have not been approved or disapproved by the
        Securities and Exchange Commission or any State securities commission or
        other
        regulatory authority, nor have any of such authorities passed upon or endorsed
        the merits of such Shares; (3) that the undersigned has had a reasonable
        opportunity to ask questions of the Company regarding restrictions on the
        transferability of the Shares and other matters relevant to the undersigned's
        purchase of the Shares; (4) the undersigned has been informed that a legend
        referring to the restrictions indicated herein on transferability and sale
        will
        be placed upon the certificate(s) evidencing the Shares, in addition to the
        legend referred to in the Agreement; (5) if the undersigned is required to
        file
        a Form 144 with the Securities and Exchange Commission in connection with
        sales
        of the Shares pursuant to Rule 144 under the Act, the undersigned will mail
        a
        copy of such Form to the Company at the same time and each time the undersigned
        mails a copy to the Securities and Exchange Commission; and (6) that the
        Company
        has made no representations or warranties to the undersigned of any kind
        whatsoever regarding the tax treatment of the Option and/or the
        Shares.

      

      
        	
                Dated:

              	
                  

              	 	
                Very
                  truly yours,

              
	 	 	 	 
	 	 	 	
                  

              
	 	 	 	
                Signature

              
	 	 	 	 
	 	 	 	
                  

              
	 	 	 	
                Name
                  of Optionholder

              
	 	 	 	 
	 	 	 	
                RESIDENCE:

              
	 	 	 	 
	 	 	 	
                  

              
	 	 	 	
                Street

              
	 	 	 	
                  

              
	 	 	 	
                City,
                  State, Zip Code

              

      

      

      
        	
                G.

              	
                Date
                  of Stock Option Grant Agreement:
                  ____________________.

              

      

      

      
        	
                H.

              	
                Number
                  of Shares covered by Agreement:
                  ____________________.

              

      

       

      
        
          
          

        

        
          -
            13
            -

          
            

          

        

        
          
          

        

      

       

      
        	
                I.

              	
                Number
                  of Shares which may be purchased at this time:
                  ____________________.

              

      

      

      
        	
                J.

              	
                Number
                  of Shares to be actually purchased at this time (must be 100 Shares
                  or
                  whole multiples thereof and cannot be greater than C):
                  ____________________.

              

      

      

      
        	
                K.

              	
                Exercise
                  price per Share:
                  $____________________.

              

      

      

      
        	
                L.

              	
                Aggregate
                  price to be paid for Shares actually purchased (D multiplied by
                  E):
                  $___________________.

              

      

    

     

     

    -
      14
      -Exhibit 10.1

    
      

    

    Exhibit
      10.1

    AGREEMENT
      OF SALE

    

    THIS
      AGREEMENT OF SALE (this “Agreement”) is made this 24th
      day of
      October, 2005, by and between CHARLENE SCHWARTZ, an adult individual with an
      address of 1070 Eagle Road, Newtown, Pennsylvania 18940, LANGHORNE COURTYARD,
      INC., a Pennsylvania corporation with an address of 1070 Eagle Road, Newtown,
      Pennsylvania 18940, MT. LAUREL FFI, INC., a New Jersey corporation with an
      address of 1070 Eagle Road, Newtown, Pennsylvania 18940 and BETHLEHEM FFI,
      INC.,
      a Pennsylvania corporation with an address of 1070 Eagle Road, Newtown,
      Pennsylvania 18940 (hereinafter collectively called “Seller”) and HERSHA
      HOSPITALITY TRUST, a Maryland real estate investment trust with an address
      of
      510 Walnut Street, 9th Floor, Philadelphia, Pennsylvania 19106 (hereinafter
      called “Buyer”).

    

    W
      I T N E S S E T H :

    

    For
      and
      in consideration of the mutual undertakings contained herein and for other
      good
      and valuable consideration, the receipt and sufficiency of which are hereby
      mutually acknowledged, the parties hereto, intending to be legally bound hereby,
      agree as follows:

    

    1.    
Definitions.
      The
      following terms shall have the following definitions.

    

    “Accounts
      Receivable” means all amounts which Seller is entitled to receive from the
      operation of the Hotel which are not paid as of the Settlement, including,
      without limitation, charges for the use or occupancy of any guest, conference,
      meeting or banquet rooms or other facilities at the Hotel, any restaurant,
      bar
      or banquet services, or any other goods or services provided by or on behalf
      of
      Seller at the Hotel, but expressly excluding any credit card charges and checks
      which Seller has submitted for payment as of the Settlement.

    

    “Accrued
      Vacation Pay” means the Compensation which the Employees are entitled to receive
      for any vacation days accrued by such Employees as of the time in question
      (computed at the rate of Compensation earned by such Rehired Employees as of
      the
      time in question).

    

    “Appurtenances”
      shall mean all appurtenances, hereditaments, easements and other rights and
      privileges in any way pertaining or beneficial to the Land or the
      Improvements.

    

    “Asset
      Manager” shall have the meaning set forth in Section 12(a).

    

    “Bethlehem
      Fairfield” shall mean the 103 room Fairfield Inn and Suites currently operated
      by Seller on the Bethlehem Fairfield Property.

    

    “Bethlehem
      Fairfield Property” shall mean the real property located at 2140 Motel Drive,
      Bethlehem, Pennsylvania, upon which Seller currently operates the Bethlehem
      Fairfield, the legal description of which is attached hereto as Exhibit
      A.

    

    “Books
      and Records” shall mean all books and records located at the Hotel or in the
      Newtown, Pennsylvania, offices of Solow, Inc., which relate exclusively to
      the
      Hotel, but expressly excluding all documents and other materials which (i)
      are
      legally privileged or constitute attorney work product, (ii) are subject to
      a
      confidentiality agreement prohibiting their disclosure by Seller, or (iii)
      constitute confidential internal assessments, reports, studies, memoranda,
      notes
      or other correspondence, prepared by or on behalf of any officer or employee
      of
      Seller or Manager, including, without limitation, all (A) internal financial
      analyses, appraisals, tax returns, financial statements, (B) corporate or other
      entity governance records, (C) Employee personnel files, (D) any work papers,
      memoranda, analysis, correspondence and similar documents and materials prepared
      by or for Seller or Manager in connection with the transaction described in
      this
      Agreement. 

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    “Bookings”
      shall mean all bookings and reservations for guest, conference, meeting rooms
      or
      other facilities at the Hotel, together with all deposits held by Seller with
      respect thereto.

    

    “Buyer
      Indemnified Parties” shall mean Buyer, Asset Manager and their partners,
      officers, directors, parents, affiliates and employees, and each of their
      respective heirs, executors, administrators, successors and
      assigns.

    

    “Capital
      Transaction” shall mean a transaction pursuant to which (i) the Buyer finances
      or refinances the Property or any portion thereof, (ii) all or any portion
      of
      the Property sold, condemned, exchanged or otherwise disposed of, (iii)
      insurance proceeds or other damages in respect of the Property are recovered
      by
      the Buyer, or (iv) any other transaction that, in accordance with generally
      accepted accounting principles, is considered capital in nature.

     

    “Cash”
      shall mean all cash on hand or on deposit in any house bank, operating account
      or other account maintained in connection with the ownership or operation of
      the
      Hotel, including Charlene Schwartz’s personal bank, money market or other
      similar depository accounts.

    

    “Compensation”
      means all salaries and wages which the employees are entitled to receive at
      the
      time in question, together with all employment taxes with respect thereto,
      including, without limitation, any withholding or employer contributions under
      the Federal Insurance Contribution Act and Federal Unemployment Taxes Act,
      but
      expressly excluding all other compensation accrued or payable to the Employees,
      including, without limitation, any (i) bonus or incentive compensation; (ii)
      accrued vacation days, sick days and personal days; and (iii) any health,
      welfare and other benefits provided to the Employees under the Seller Employee
      Plans, and employer contributions to, and amounts paid or accrued under, the
      Seller Employee Plans or Seller IRA Plan for the benefit of the
      Employees.

    

    “Confidential
      Information” has the meaning set forth in Section 10 of this
      Agreement.

    

    “Contracts”
      shall mean the contracts listed on the attached Schedule 1-1. 

     

    “Cut-Off
      Time” shall mean 11:59 p.m. on the day preceding the Settlement Date, or such
      other time expressly provided in this Agreement.

    

    “Deeds”
      shall collectively mean (i) with respect to the Pennsylvania Property, special
      warranty deeds wherein Seller shall convey title to each property comprising
      the
      Pennsylvania Property, subject to the Permitted Exceptions that are applicable
      to the respective Pennsylvania Property and (ii) with respect to the New Jersey
      Property, a bargain and sale deed with covenants against grantor’s acts wherein
      Seller shall convey to Buyer title to the New Jersey Property subject to the
      Permitted Exceptions that are applicable to the New Jersey Property.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    “Due
      Diligence Period” shall mean the period commencing on Tuesday, October 25, 2005,
      and ending at 5:00 p.m. on November 25, 2005, provided that the Due Diligence
      Period may be extended, at Buyer’s sole option, for the Extended Due Diligence
      Period.

    

    “Employees”
      means all employees of Seller or Manager, or any of their affiliates, who are
      employed full-time or part-time at the Hotels at the time in question.

    

    “Employer”
      means the Seller, Manager or any of their affiliates which employs the
      Employees.

    

    “Escrow
      Holder” shall mean Buyer’s Title Company.

     

    “Excluded
      Property” shall mean the property, assets, rights and interests set forth on
      Schedule 1-2, which are not included in the Property and are not being sold
      to
      Buyer.

    

    “Extended
      Due Diligence Period” shall mean a fifteen (15) day extension of the Due
      Diligence Period, ending at 5:00 p.m. on December 10, 2005. Buyer shall have
      the
      right to extend the Due Diligence Period for the Extended Due Diligence Period
      by giving Seller written notice thereof prior to the end of the Due Diligence
      Period. 

    

    “Guest
      Ledger” means any and all charges accrued to the open accounts of any guests or
      customers at the Hotel as of the Cut-Off Time for the use and occupancy of
      any
      guest, conference, meeting or banquet rooms or other facilities at the Hotel,
      any restaurant, bar or banquet services, or any other goods or services provided
      by or on behalf of Seller.

    

    “Hazardous
      Substances” shall mean
      any
      substance or material whose presence, nature, quantity or intensity of
      existence, use, manufacture, disposal, transportation, spill, release or effect,
      either by itself or in combination with other materials is either:
      (1) potentially injurious to the public health, safety or welfare, the
      environment or the Property, (2) regulated, monitored or defined as a
      hazardous or toxic substance or waste by any
      federal, state, municipal or other governmental department, commission, board,
      bureau, agency or instrumentality, domestic or foreign (“Governmental
      Body”),
      or
      (3) a basis for liability of the owner of the Property to any Governmental
      Body or third party, and shall include, but not be limited to, hydrocarbons,
      petroleum, gasoline, crude oil, or any products, by-products or components
      thereof, and asbestos and mold.

    

    “Hotel”
      or “Hotels” shall mean the hotel businesses operated by Seller on the Real
      Property.

    

    “Improvements”
      shall mean the buildings (including all mechanical and utility systems and
      fixtures) and improvements constructed on the Real Property.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    “Land”
      shall mean collectively the New Jersey Property and the Pennsylvania
      Property.

    

    “Langhorne
      Courtyard” shall mean the 118 room Courtyard by Marriott currently operated by
      Seller on the Langhorne Courtyard Property.

    

    “Langhorne
      Courtyard Property” shall mean the real property located at 5 N. Cabot
      Boulevard, Langhorne, Pennsylvania, upon which Seller currently operates the
      Langhorne Courtyard, the legal description of which is attached hereto as
      Exhibit A-1. 

    

    “Licenses,
      Permits and Approvals” shall mean all certificates, licenses (including, without
      limitation, any and all liquor licenses for the Hotels, if any), permits,
      authorizations and approvals issued for or with respect to the Personal Property
      or the Real Property by governmental and quasi-governmental authorities having
      jurisdiction, to the extent transferable.

    

    “Manager”
      shall mean collectively the affiliates of Seller that have been engaged by
      Seller to manage the Hotels. For purposes of this Agreement, Solow, Inc. is
      not
      a Manager. 

    

    “Management
      Agreement” shall have the meaning set forth in Section 12(a).

    

    “Marriott”
      shall mean Marriott International, Inc. or its affiliate.

    

    “Mt.
      Laurel Fairfield” shall mean the 118 room Fairfield Inn and Suites which is
      currently operated by Seller on the New Jersey Property.

    

    “NOI”
      shall mean, solely for purposes of the earn-out set forth in Section 12(g),
      for
      any period, Operating Revenues less (i) Operating Expenses; (ii) 4% of revenues
      for the management fees (notwithstanding the fact that Buyer will be paying
      a
      3.5% management fee to Seller or its affiliate under the Management Agreement
      and a 1% management fee to Asset Manager under the Asset Management Agreement);
      (iii) 3% of revenues for furniture, fixtures and equipment (“FF&E”)
      reserves; (iv) real property and personal property taxes, assessments and other
      taxes levied in connection with the Property and FF&E; (v) insurance
      premiums and deductibles and (vi) scheduled lease payments under the Van Lease.
      

    

    “New
      Jersey Property” shall mean the real property located at 350 Century Parkway,
      Mt. Laurel, New Jersey, upon which Seller currently operates the Mt. Laurel
      Fairfield, the legal description of which is attached hereto as Exhibit A-2.
      

    

    “Operating
      Expenses” shall mean, for any period, the current obligations of the Buyer or
      its affiliates with respect to the Property for such period, determined in
      accordance with an accounting system agreed upon by Buyer and Seller during
      the
      Due Diligence Period, or Extended Due Diligence Period, if properly extended,
      consistently applied, for operating expenses of the Property, but specifically
      excluding items (ii), (iii), (iv) and (v) within the definition of “NOI” above
      and also excluding depreciation and principal and interest payments, rents
      or
      other similar payments in connection with any financing of real property,
      personal property or improvements.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    “Operating
      Revenues” shall mean, for any period, the gross revenues of Buyer arising from
      the ownership of the Property during such period determined in accordance with
      an accounting system agreed upon by Buyer and Seller during the Due Diligence
      Period, or Extended Due Diligence Period, if properly extended, but specifically
      excluding the proceeds of Capital Transactions and capital contribution by
      the
      Buyer or its affiliates.

    

    “Permitted
      Exceptions” shall have the meaning set forth in Section 4(a) below.

    

    “Personal
      Property” shall mean (i) all fixtures (other then those which constitute
      Improvements), furniture, furnishings, equipment, machinery, appliances, art
      work and other items of tangible personal property which are located at one
      of
      the Hotels and used exclusively in the operation of the Hotels, or ordered
      for
      future use at one of the Hotels as of the Settlement; (ii) all linens, uniforms,
      engineering, maintenance, cleaning and housekeeping supplies, matches and
      ashtrays, soap and other toiletries, stationery, menus and other printed
      materials, and all other similar materials and supplies, which are located
      at
      one of the Hotels or ordered for future use at one of the Hotels as of the
      Settlement; (iii) any trademarks, trade names, service marks and other
      intellectual property rights set forth in Schedule 1-3; (iv) warranties and
      guaranties held by Seller pursuant to any Contracts or with respect to any
      Improvements or Personal Property; (v) direct dial telephone numbers for the
      Hotels; (vi) all hardware and software computer and information technology
      systems at the Hotels; (vii) Books and Records and (viii) any other tangible
      or
      intangible personal property located at one of the Hotels which is owned by
      Seller and used exclusively in the operation of one of the Hotels, but
      specifically excluding (A) Cash, (B) Accounts Receivable, (C) the Excluded
      Property, (D) the Third Party Property, (E) refundable escrows, such as township
      escrows, held by any governmental entity with jurisdiction over the Property
      and
      (F) all assets of Solow, Inc. located at Solow’s corporate offices in Newtown,
      Pennsylvania.

    

    “Prepaid
      Expenses” shall mean all prepaid expenses to the extent Seller receives a credit
      for such prepaid expenses at Settlement as set forth in Section
      7(e).

    

    “Property”
      shall mean collectively the Real Property, the Personal Property, the Hotels
      and
      the Improvements.

    

    “Pennsylvania
      Property” shall mean collectively (i) the Bethlehem Fairfield Property and (ii)
      the Langhorne Courtyard Property. 

    

    “Real
      Property” shall mean collectively the New Jersey Property, the Pennsylvania
      Property, the Improvements constructed on the New Jersey Property and the
      Pennsylvania Property and the Appurtenances relating thereto.

    

    “Seller
      IRA Plan” shall mean the IRA Plan maintained by Seller, Manager or an affiliate
      thereof for the benefit of the Employees. 

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    “Seller
      Employee Plans” shall mean all plans and programs maintained by or on behalf of
      Seller for the health, welfare or benefit of any Employees and/or their spouses,
      dependents or other qualified beneficiaries.

    

    “Seller
      Indemnified Parties” shall have the meaning set forth in Section
      13(b).

    

    “Settlement”
      shall have the meaning set forth in Section 7(a).

    

    “Settlement
      Date” shall have the meaning set forth in Section 7(a).

    

    “Termination
      Date” shall have the meaning set forth in Section 21.

    

    “Third-Party
      Property” shall mean any fixtures or personal property owned by (i) the lessor
      under the Van Lease, (ii) the supplier or vendor providing vending equipment
      such as soda or candy machines in connection with the sale of such supplier
      or
      vendor’s products, (iii) Marriott, (iv) any Employees, or (vi) any guests or
      customers of the Hotel. 

    

    “Van
      Lease” shall mean the lease for the passenger van currently utilized by Seller
      in connection with the Langhorne Courtyard. 

    

    “WARN
      Act” means the Worker’s Adjustment and Retraining Notification Act of 1988, 29
      U.S.C. Section 2102, et
      seq.,
      and any
      similar state and local applicable law, as amended from time to time, and any
      regulations, rules and guidance issued pursuant thereto.

     

    2.    
Agreement
      to Sell.
      Subject
      to the terms and conditions set forth in this Agreement, Seller hereby agrees
      to
      sell and convey the Property to Buyer, and Buyer hereby agrees to purchase
      the
      Property from Seller. 

     

    3.    
Purchase
      Price.
      

    

    (a)    The
      total
      consideration and purchase price (the “Purchase Price”), which Buyer agrees to
      pay to Seller and which Seller agrees to accept for the Property is Forty
      Million Five Hundred Thousand U.S. Dollars ($40,500,000.00), subject to the
      prorations and adjustments described herein, payable as follows: 

    

    
      	 	 	 
	
              Federal
                wire transfer at signing of this Agreement (the “Deposit”)

            	
              $100,000.00

            	 
	 	 	 
	
              Federally
                wired funds at Settlement

            	
              $40,400,000.00

            	 
	
              TOTAL                
                               
                

            	
              $40,500,000.00

            	 

    

    

    (b)    The
      Deposit shall be paid to Buyer’s Title Company (defined below) (“Escrow Holder”)
      and shall be placed by Escrow Holder in an interest bearing escrow account
      pending Settlement (as hereinafter defined). All interest earned on the Deposit
      shall be considered part of the Deposit. The Deposit will be credited against
      the Purchase Price at Settlement. If Settlement does not occur hereunder, the
      Deposit shall be paid to party entitled thereto in accordance with this
      Agreement. 

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    (c)    Seller
      and Buyer hereby agree that the Purchase Price shall be allocated among the
      Land, Improvements and Personal Property as set forth in Schedule 3(c) for
      federal, state and local tax purposes. Seller and Buyer acknowledge and agree
      that the allocation set forth in Schedule 3(c) represents an arm’s length
      agreement based on the Parties’ best judgment as to the fair market value of the
      Property. Seller and Buyer shall file all federal, state and local tax returns
      and related tax documents consistent with the allocation set forth in Schedule
      3(c), and shall not make any statement or take any position in connection with
      any tax return, refund claim, audit, litigation or otherwise, which is
      inconsistent with such allocation. This Section 3(c) shall survive the
      Settlement. 

    

    4.    Title.

    

    (a)    At
      Settlement, Seller shall convey to Buyer good and marketable title to the Real
      Property, insurable at regular rates by a reputable title insurance company
      licensed to do business in the Commonwealth of Pennsylvania and the State of
      New
      Jersey (the “Title Company”), free and clear of all liens, encumbrances, and
      restrictions other than the following (the “Permitted Exceptions”): (i) the lien
      of real estate taxes, water rent and sewer charges that are not due and payable
      on the Settlement Date, (ii) all easements, restrictions, or covenants of record
      that do not restrict or prohibit the use and operation of the Property or the
      use of the Property, or any portion thereof, as a hotel , (iii) special
      assessments which have become a lien on the Real Property as of the Settlement
      Date (but only for installments due after the Settlement Date), (iv) rights
      of
      the public and adjoining land owners in highways, streets, roads and lanes
      bounding the Real Property, (v) retaining walls and other walls, bushes, trees,
      hedges, fences and the like extending from or onto the Real Property and any
      portion of the Real Property lying in the bed of any public street, (vi)
      standard conditions and exceptions to title insurance contained in the ALTA
      1992
      Owner’s Standard Form B Title Insurance Policy, (vii) such state of facts as a
      current and accurate survey and/or physical inspection of the Real Property
      might disclose, provided that such state of facts shall not include facts that
      restrict or prohibit, in any way, the current use and operation of the Property
      or that in any way violate any local, state or federal law, regulation, code
      or
      ordinance, including without limitation, those pertaining to zoning, (viii)
      subsurface conditions affecting the Real Property not disclosed by any
      instrument recorded in the land records of the county in which the applicable
      Real Property is located and to which seller has no notice or knowledge, and
      (ix) any other encumbrances and restrictions appearing on the Title Commitment
      (defined below) that are deemed to be Permitted Exceptions by virtue of Section
      4(b) below. 

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    (b)    Upon
      the
      full execution of this Agreement, Buyer shall order from the Title Company
      and
      promptly deliver to Seller, when received by Buyer, a commitment to issue an
      owner’s policy of title insurance reflecting the status of title to the Real
      Property (the “Title Commitment”). Buyer shall have until the expiration of the
      Due Diligence Period or the Extended Due Diligence Period, if properly extended,
      such time being strictly of the essence, to notify Seller in writing of any
      objection which Buyer may have as a result of any exception reported in the
      Title Commitment or any matter depicted on its survey of the Property, which
      exception or matter is not a Permitted Exception. Solely to the extent that
      Seller receives written notice from Buyer of any such objection on or before
      the
      expiration of the Due Diligence Period or the Extended Due Diligence Period,
      if
      properly extended, said objection shall be deemed a “Title Objection”. To the
      extent that Seller does not receive notice from Buyer of any such objection
      on
      or before the expiration of the Due Diligence Period, or the Extended Due
      Diligence Period, if properly extended, said objection and the exception or
      matter to which said objection relates shall be deemed a Permitted Exception
      and
      Buyer shall take title to the Real Property subject thereto. Seller shall have
      no obligation whatsoever to eliminate any objection, exception or matter, which
      is so deemed a Permitted Exception. Notwithstanding the forgoing, if between
      the
      end of the Due Diligence Period, or the Extended Due Diligence Period, if
      properly extended, and the Settlement Date, Buyer obtains a bring down search
      from its Title Company and such search discloses any title defect objectionable
      to Buyer, other than a Permitted Exception, which was not set forth in the
      Title
      Commitment (a “Subsequent Defect”), Buyer shall provide Seller with a copy of
      such bring down search and a legible copy of the Subsequent Defect within five
      (5) days following Buyer’s receipt of such bring down search and such Subsequent
      Defect shall be deemed a Title Objection for purposes of this Section 4(b),
      and
      the Settlement Date shall be extended by the times set forth in Section 4(c)
      if
      necessary in order to allow Seller to determine whether to eliminate such Title
      Objection and to actually eliminate such Title Objection if so elected by
      Seller.

    

    (c)    Seller
      may, at its sole option, elect to eliminate from Buyer’s final title policy any
      particular Title Objection. Seller shall make said election by written notice
      to
      Buyer given within five (5) days of Seller’s receipt of timely written notice of
      said particular Title Objection. If Seller elects to eliminate any such Title
      Objection, and the elimination of such Title Objection requires additional
      time
      to eliminate such Title Objection, then and in either of those events, Seller
      may extend the Settlement Date for an additional reasonable period of time,
      not
      to exceed thirty (30) days. Such extension of the Settlement Date by Seller
      shall not diminish Seller’s or Buyer’s rights under the remaining provisions of
      this Section 4(c). If Seller is unable or does not desire to eliminate any
      one
      or more particular Title Objections, Seller shall so notify Buyer in writing
      within ten (10) days of Seller’s receipt of timely written notice of said
      particular Title Objections. With respect to Title Objections which Seller
      has
      initially elected to eliminate, if, despite Seller’s good faith efforts, Seller
      reasonably determines that it will be unable to eliminate any such Title
      Objection on or before the Settlement Date or any extension thereof, Seller
      shall so notify Buyer in writing within ten (10) business days of said
      determination. Upon receipt of either of the notices referred to in the two
      immediately preceding sentences hereof, Buyer shall have the option to either
      waive such Title Objections in writing and consummate the transaction
      contemplated herein without abatement of the Purchase Price or terminate this
      Agreement at any time within ten (10) business days after receipt of Seller’s
      notice, such ten (10) business day period being strictly of the essence. If
      no
      election to terminate is made in writing by Buyer within such ten (10) business
      day period, Buyer shall automatically and conclusively be deemed to have
      irrevocably waived all such Title Objections and shall take title to the Real
      Property subject thereto without any adjustment or abatement of the Purchase
      Price.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (d)   In
      the
      event of proper termination under this Section 4, this Agreement shall be deemed
      null and void, and the Deposit, and interest earned thereon, shall be returned
      to Buyer and the parties hereto shall have no further objections to or recourse
      against each other with regard to the matters provided for in this Agreement,
      except as specifically set forth herein and except for rights and objections
      which expressly survive the termination hereof.

    

    5.    Representations
      and Warranties.
      

    

    (a)  
Seller
      hereby makes the following representations and warranties to Buyer for the
      purpose of inducing Buyer to execute and deliver this Agreement and to
      consummate the transactions contemplated by this Agreement, each of which
      representations and warranties is true and correct on the date of this Agreement
      and shall be true and correct as of the Settlement Date:

    

    (i)    Seller
      has full legal and equitable title to the Personal Property and Seller has
      full
      legal and equitable fee simple title to the Real Property and the legal power
      to
      convey all right, title and interest in and to the Property to Buyer in
      accordance with this Agreement. There is no existing agreement, commitment,
      option or right with, in or to any person or entity to acquire the Real Property
      or any interest therein. 

    

    (ii)   To
      the
      best of Seller’s knowledge, Seller has not received any notices of violation of
      law or ordinance with respect to the Property that are outstanding. Seller
      has
      not received any notice of special tax or public assessment against the Property
      for public improvements that will remain unpaid at Settlement. 

    

    (iii)   Seller
      is
      an adult individual who has the sole legal capacity and authority to execute,
      deliver and perform this Agreement.

    

    (iv)   Seller
      is
      not legally prohibited from (i) executing or delivering this Agreement, (ii)
      complying with or performing the terms of this Agreement, or (iii) consummating
      the transactions contemplated by this Agreement. The execution and performance
      by Seller of this Agreement will not be in violation of or cause a default
      under
      any applicable law, agreement, instrument, covenant, condition, restriction,
      judgment, order or decree.

    

    (v)    No
      further consent, waiver, approval, or authorization of, or filing, registration,
      or qualification with, or notice to, any governmental authority or any other
      entity or person is required to be made, obtained, or given by Seller in
      connection with the execution, delivery, and performance of this Agreement,
      other than the consent of Marriott as more particularly described in Section
      7(f)(iv) below.

    

    (vi)          
      There
      are
      no leases or other occupancy agreements for all or any portion of the Real
      Property, and there are no operating, equipment or capital leases other than
      the
      Van Lease. 

    

    (vii)         
      Seller
      is
      a “United States person” within the meaning of Sections 1445(f)(3) and
      7701(a)(30) of the Internal Revenue Code of 1986, as amended.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    (viii)        
      There
      are
      no lawsuits, actions, suits, claims or proceedings pending against or affecting
      Seller or the Property or any part of or interest in the Property. To Seller’s
      knowledge, there are no other lawsuits, actions, suits, claims or proceedings
      threatened in writing against or affecting Seller or the Property or any part
      of
      or interest in the Property, except for a possible lawsuit against Seller by
      a
      former housekeeper at the Langhorne Courtyard alleging improper termination
      (the
“Langhorne Courtyard Claim”). Seller shall indemnify,
      defend and hold the Buyer Indemnified Parties harmless from and against any
      and
      all claims, costs, penalties, damages, losses, liabilities and expenses that
      any
      of the Buyer Indemnified Parties may at any time incur as a result of the
      Langhorne Courtyard Claim.

    

    (ix)    The
      “Contract Schedule” set forth on Schedule 1-1 contains a complete and accurate
      list of all contracts affecting the Property. During the Due Diligence Period,
      Seller will deliver to Buyer true and complete copies of each of the Contracts
      listed on the Contract Schedule. 

     

    (x)    The
      names
      of all Employees and the salary of each employee, and whether each employee
      is a
      full or part-time employee, are set forth on Schedule 5(a)(x). Seller is not
      a
      party to any written employment or compensation agreements with any of the
      Employees. Seller is not a party to any collective bargaining agreement with
      any
      labor union. Seller has not received notice of efforts to organize a collecting
      bargaining group among all of or any of the Employees.

    

    (xi)    Neither
      the execution, delivery, or performance by Seller of this Agreement, nor the
      consummation of the transactions contemplated hereby, nor compliance by Seller
      with any of the provisions hereof, will violate
      any judgment, ruling, order, writ, injunction, decree, statute, rule, regulation
      or agreement applicable to the Seller or the Property.

    

    (xii)   There
      is
      no loan agreement, guarantee, note, bond, indenture and other debt instrument,
      lease and other contract to which the Seller is a party or by which the Property
      is bound other than the Permitted Exceptions or such other documents that will
      be satisfied at or prior to Settlement.

    

    (xiii)        
      All
      of
      the Seller’s and Manager’s insurance policies for the Property (“Insurance
      Policies”) are valid and in full force and effect and the Seller shall pay all
      future premiums for such policies up to the Settlement Date (and any
      replacements thereof) on or before the due date therefor. The Seller shall
      pay
      all premiums on, and shall not cancel or allow to expire, any of the Insurance
      Policies prior to the Settlement Date unless such policy is replaced, without
      any lapse of coverage, by another policy or policies providing coverage at
      least
      as extensive as the policy or policies being replaced. The Insurance Policies
      are attached hereto as Schedule 5(a)(xiii).

    

    (xiv)        
      To
      the
      Seller’s knowledge, except as otherwise disclosed in writing to the Buyer prior
      to the end of the Due Diligence Period, for each of the accounting years, when
      a
      given year is taken as a whole, all of the Seller’s and the Property’s financial
      information and financial statements and reports previously delivered or to
      be
      delivered to the Buyer is and shall be correct and complete in all material
      respects. Buyer acknowledges that Seller does not prepare or have prepared
      compiled, reviewed or audited financial statements so the foregoing
      representation is not based on Seller’s review of compiled, reviewed or audited
      financial statements. 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      (xv)        
        Except
        for matters in Buyer's environmental reports and statements, and matters
        in
        Seller’s environmental reports that are delivered to Buyer during the Due
        Diligence Period, and except for cleaning supplies and the like used in the
        ordinary course of the operations of the Hotels, Seller has no knowledge
        (a) of the presence of any Hazardous Substances on the Property, or any
        portion thereof, or, (b) of any spills, releases, discharges, or disposal
        of Hazardous Substances that have occurred or are presently occurring on
        or onto
        the Property, and or any portion thereof, or (c) of the presence of any PCB
        transformers serving, or stored on, the Property, or any portion thereof,
        and
        Seller has no knowledge of any failure to comply with any applicable local,
        state and federal environmental laws, regulations, ordinances and administrative
        and judicial orders relating to the generation, recycling, reuse, sale, storage,
        handling, transport and disposal of any Hazardous Substances.

    

    

    (xvi)        
      The
      franchise licenses from Marriott with respect to each Hotel (each a “Franchise
      License”) are valid and in full force and effect, and on the Settlement Date
      Seller will not be in default with respect thereto (with or without the giving
      of any required notice and/or lapse of time). Subject to Buyer obtaining
      Marriott Approval, neither the execution, delivery, or performance by the Seller
      of this Agreement, nor the consummation of the transactions contemplated hereby,
      nor compliance by the Seller with any of the provisions hereof, will violate,
      conflict with, result in a breach of any provision of, constitute a default
      (or
      an event that, with notice or lapse of time or both, would constitute a default)
      under, result in the termination of, or result in a right of termination under
      any of the terms, conditions, or provisions of, any Franchise
      License.

    

    (xvii)       
      To
      Seller’s knowledge, there are no violations of any environmental laws or
      regulations relating to Hazardous Substances respecting the Property or the
      Hotels.

    

    (xviii)      
      To
      the
      best of Seller’s knowledge, Seller possesses all licenses
      (including, without limitation, the liquor license for the Langhorne Courtyard),
      permits and approvals required by any governmental or quasi-governmental agency,
      body or officer for the ownership, operation and use of the Property or any
      part
      thereof (collectively “Authorizations”),
      each of which is valid and in full force and effect, and, to the best of
      Seller’s knowledge, no provision, condition or limitation of any of the
      Authorizations has been breached or violated.  To the best of Seller’s
      knowledge, the Seller has not misrepresented or failed to disclose any relevant
      fact in obtaining all Authorizations, and the Seller has no knowledge of any
      change in the circumstances under which those Authorizations were obtained
      that
      result in their termination, suspension, modification or limitation other than
      the Seller’s liquor license, if any.   

    

    (xviii)       
      The
      provisions of this Section 5(a) shall survive Settlement for the period set
      forth in Section 21 below.

    

    (b)    Buyer,
      to
      induce Seller to enter into this Agreement and to complete Settlement, makes
      the
      following representations and warranties to Seller, which representations and
      warranties are true and correct as of the date of this Agreement, and shall
      be
      true and correct at and as of the Settlement Date in all respects as though
      such
      representations and warranties were made both at and as of the date of this
      Agreement, and at and as of the Settlement Date.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    (i)    Buyer
      is
      a real estate investment trust, duly organized, qualified to do business and
      in
      good standing under the laws of the State of Maryland. The execution and
      delivery of this Agreement by the signatories hereto on behalf of Buyer and
      the
      performance of this Agreement by Buyer have been duly authorized by Buyer.
      Buyer
      has the legal capacity and authority to execute, deliver and perform this
      Agreement. Buyer shall have the right to assign this Agreement to an entity
      in
      which it will be a member or partner, either directly or indirectly, and which
      entity shall have the requisite power, authority and financial ability required
      of Buyer under this Agreement, but such assignment shall not relieve Buyer
      from
      liability under this Agreement.

    

    (ii)   Buyer
      is
      not prohibited from (i) executing or delivering this Agreement, (ii) complying
      with or performing the terms of this Agreement, or (iii) consummating the
      transactions contemplated by this Agreement. Execution and performance by Buyer
      of this Agreement will not be in violation or cause a default under any
      applicable law, agreement, instrument, covenant, condition, restriction,
      judgment, order or decree.

    

    (iii)          
      No
      further consent, waiver, approval, or authorization of, or filing, registration,
      or qualification with, or notice to, any governmental authority or any other
      entity or person is required to be made, obtained, or given by Buyer in
      connection with the execution, delivery, and performance of this
      Agreement.

    

    (iv)          Buyer,
      or
      its assignee, has or will have, at the Settlement Date, all necessary funds,
      or
      commitments for necessary funds, to complete the purchase contemplated by this
      Agreement.

    

    (v)   The
      provisions of this Section 5(b) shall survive Settlement for the period set
      forth in Section 21 below.

    

    6.    Due
      Diligence.
      

    

    (a)    Subject
      to Section 10 below, Buyer shall have the right during the Due Diligence Period
      to review the Van Lease, Licenses, Permits and Approvals, Contracts, Books
      and
      Records, Bookings and legal compliance of the Property and to go in, on or
      over
      the Property for the purpose of conducting building surveys, inspections, soil
      tests, environmental testing, feasibility studies and any and all other studies,
      tests and examinations thereof as Buyer may desire. Subject to Section 10 below,
      Seller shall permit Buyer and its agents reasonable access to the Property,
      upon
      forty-eight hours advance notice to Seller, to enable Buyer to conduct such
      inspections. Buyer shall repair any and all damage by reason of any such testing
      and shall indemnify and save Seller harmless for any liability in connection
      therewith. In the exercise of its rights pursuant to this Section 6, Buyer
      shall
      comply fully with its obligations under Section 10 below and shall not interfere
      with the conduct of Seller's operations being conducted on the Property and
      shall give Seller reasonable advance notice of any such activities Buyer plans
      to conduct on the Property. Before entering upon the Property, Buyer shall
      deliver to Seller a certificate of insurance evidencing Buyer’s maintenance of
      general liability insurance having a single combined limit of not less than
      $1,000,000.00 and naming Seller and its Manager as additional insured.
Seller
      shall cooperate with Buyer in good faith to permit Buyer to expeditiously
      conduct due diligence on the Property in accordance with this
      Agreement. 

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    Promptly
      following the commencement of the Due Diligence Period, Seller shall provide
      the
      Buyer access to all records and information concerning the Property to the
      extent in Seller’s possession, and the
      Seller shall make available to the Buyer, its auditors, engineers, attorneys
      for
      inspection at the offices of Solow, Inc. in Newtown, Pennsylvania or at the
      individual Hotels, depending on where the applicable records are currently
      located, copies of all existing architectural and engineering studies, ALTA
      surveys, existing title insurance policies, zoning and site plan materials,
      environmental audits,
      environmental reports, zoning compliance letters,
      real and
      personal property tax records, STAR reports, Seller’s internally-prepared
      financial reports and statements for the past three years (including a year
      to
      date statement of net income if available), existing franchise
      agreements, current franchise property improvement plans, the current deed,
      historical reports on capital expenditures, forward-looking capital budget,
      permits, licenses, operating and services contracts, and
      all
      other materials or information, if any, relating to the Property to the extent
      same are in Seller’s possession. Seller shall also deliver relevant portions of
      Seller’s income tax returns solely to the extent that such portions relate
      solely to the operations of the Hotels. Buyer acknowledges that Charlene
      Schwartz shall not be required to deliver full copies of her personal income
      tax
      returns. Except as otherwise set forth in Section 5(a) above, Seller makes
      no
      representation or warranty concerning the accuracy or authenticity of any
      information contained in such materials other than the accuracy of the
      historical reports on capital expenditures and the forward-looking budget
      prepared by Seller and, subject to the limitations contained in Section
      5(a)(xiv), Seller’s financial statements. 

    

    (b)    Buyer
      shall have the right to terminate this Agreement for any reason or no reason
      whatsoever by delivering written notice thereof to Seller at any time prior
      to
      5:00 p.m. on the last day of the Due Diligence Period or the Extended Due
      Diligence Period, if applicable (SAID TIME AND DATE BEING STRICTLY OF THE
      ESSENCE). The failure of Buyer to terminate this Agreement as aforesaid shall
      constitute a waiver of Buyer’s right to terminate this Agreement pursuant to
      this Section 6. 

    

    (c)    BUYER
      ACKNOWLEDGES THAT IT HAS BEEN AFFORDED AND/OR SHALL BE AFFORDED THE OPPORTUNITY
      FOR ITSELF AND ITS ENGINEERS, CONTRACTORS, ACCOUNTANTS AND OTHER REPRESENTATIVES
      OF ITS CHOOSING, TO INSPECT THE PROPERTY. BUYER EXPRESSLY ACKNOWLEDGES THAT,
      EXCEPT FOR SELLER’S REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 5(a), IT
      IS BUYING THE PROPERTY IN ITS “AS IS” CONDITION ON THE DATE HEREOF, SUBJECT TO
      REASONABLE USE, WEAR AND TEAR AND NORMAL DEPRECIATION BETWEEN THE DATE HEREOF
      AND SETTLEMENT. EXCEPT FOR MATTERS RELATED TO SELLER’S REPRESENTATIONS AND
      WARRANTIES SET FORTH IN SECTION 5(a), BUYER RELEASES SELLER FROM ALL
      RESPONSIBILITY AND LIABILITY REGARDING THE CONDITION OR UTILITY OF THE PROPERTY.
      

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    (d)    BUYER
      AFFIRMS THAT SELLER HAS NOT MADE, NOR HAS BUYER RELIED UPON, ANY REPRESENTATION,
      EXPRESS OR IMPLIED, OR PROMISE MADE BY SELLER, OR ANY OF ITS EMPLOYEES OR
      AGENTS, OR ANY BROKER, WITH RESPECT TO THE PROPERTY OR ITS OPERATION, EXCEPT
      AS
      SPECIFICALLY SET FORTH IN SECTION 5(a) OR ELSEWHERE IN THIS AGREEMENT, IF ANY.
      EXCEPT AS SET FORTH IN SECTION 5(a), SELLER HEREBY EXPRESSLY DISCLAIMS ANY
      AND
      ALL WARRANTIES, EXPRESS OR IMPLIED, RELATING IN ANY WAY TO THE PROPERTY,
      INCLUDING, WITHOUT LIMITATION, ANY WARRANTY PROVIDED FOR UNDER STATUTORY OR
      COMMON LAW OR THE UNIFORM COMMERCIAL CODE, INCLUDING BUT NOT LIMITED TO
      WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. BOTH BUYER
      AND SELLER ARE ACTING AT ARM’S LENGTH TO PROTECT THEIR OWN INTERESTS, AND BOTH
      BUYER AND SELLER SHALL USE THEIR OWN INDEPENDENT BUSINESS JUDGMENT CONCERNING
      THE SALE AND PURCHASE OF THE PROPERTY. BUYER HAS COMPLETED OR PRIOR TO
      SETTLEMENT SHALL HAVE COMPLETED TO ITS SATISFACTION, ALL INVESTIGATIONS,
      INSPECTIONS AND TESTS WHICH BUYER DEEMS NECESSARY IN ITS SOLE DISCRETION TO
      DETERMINE, AMONG OTHER THINGS: (i) THE CONDITION OF THE PROPERTY, INCLUDING,
      BUT
      NOT LIMITED TO, THE SOIL CONDITION OF THE PROPERTY, THE EXISTENCE OF ANY
      ENVIRONMENTAL CONDITION, AND THE EXISTENCE OF PATENT OR LATENT DEFECTS IN
      CONSTRUCTION OF THE IMPROVEMENTS ON THE REAL PROPERTY; (ii) THE CONDITION OF
      TITLE TO THE REAL PROPERTY; AND (iii) THE STATUS OF ALL BUILDING CODE, ZONING
      AND OTHER APPLICABLE GOVERNMENTAL REQUIREMENTS OF WHATEVER KIND REGARDING THE
      REAL PROPERTY OR ANY INTENDED USE OF THE REAL PROPERTY, INCLUDING, WITHOUT
      LIMITATION, THE STATUS OF ANY PERMIT, APPLICATION, LICENSE, APPROVAL,
      CERTIFICATE OR OTHER INTANGIBLE RIGHT OF WHATEVER KIND REGARDING THE REAL
      PROPERTY AND THE HOTELS, AND (iv) THE
      STATUS AND EFFECT OF ALL RECORDED CONVENANTS AND RESTRICTIONS RELATING TO THE
      PROPERTY, IT BEING AGREED AS SET FORTH ABOVE THAT SELLER SHALL GIVE NO WARRANTY
      AND MAKE NO REPRESENTATION, EXCEPT FOR THOSE SET FORTH IN SECTION 5(a),
      REGARDING SUCH MATTERS. BUYER ACKNOWLEDGES THAT, EXCEPT FOR MATTERS RELATED
      TO
      SELLER’S REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 5(a), IT AGREES TO
      ACCEPT CONVEYANCE OF THE REAL PROPERTY AT SETTLEMENT IN ITS “AS-IS, WHERE-IS”
PHYSICAL CONDITION AS OF THE SETTLEMENT DATE, SOLELY BASED UPON ITS RELIANCE
      ON
      ITS OWN INVESTIGATIONS, INSPECTIONS AND JUDGMENT. 

    

    (e)    If
      this
      Agreement is properly terminated in accordance with Section 6(b) above, the
      Deposit shall be returned to Buyer and the parties hereto shall have no further
      objections to or recourse against each other with regard to the matters provided
      for in this Agreement, except as specifically set forth herein and except for
      rights and objections which expressly survive the termination
      hereof.

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

    (f)    During
      the Due Diligence Period, or the Extended Due Diligence Period, if properly
      extended, the parties shall use their diligent good faith efforts to agree
      upon
      the accounting system to be used to determine Operating Revenues and Operating
      Expenses. The agreed-upon accounting system shall be documented in a writing
      to
      be signed by Buyer and Seller at Settlement. 

    

    7.    Settlement.
      

    

    (a)    Settlement
      of the conveyance of the Property to Buyer shall be made on the fifteenth
      (15th)
      day
      following the expiration of the Due Diligence Period or the Extended Due
      Diligence Period, if properly extended, or the next business day if such
      fifteenth (15th)
      day is
      not a business day (“Settlement Date”), commencing at 10:00 a.m. (prevailing
      time) at the offices of Sirlin Gallogly & Lesser, P.C., 1529 Walnut Street,
      Suite 600, Philadelphia, Pennsylvania 19102, the Center City Philadelphia
      offices of Buyer’s Title Company or the Center City Philadelphia offices of
      counsel to Buyer’s mortgagee (“Settlement”). The date and time of Settlement are
      hereby agreed to be of the essence of this Agreement. 

    

    (b)    Real
      estate taxes; rents; water and sewer rentals; gas, telephone, electric and
      other
      utility charges; any other governmental tax or charge levied or assessed against
      the Property; and any other items or charges which are properly apportionable
      under local law or custom shall be apportioned on a per diem basis as of the
      Settlement Date, with Buyer being considered the owner on the Settlement Date.
      

    

    (c)    Buyer
      and
      Seller shall evenly divide and evenly pay all state and local realty transfer
      taxes or transfer fees applicable to the sale set forth in this Agreement.
      

    

    (d)    Possession
      of the Real Property is to be delivered by delivery of an executed Deed and
      all
      keys to the Real Property in Seller’s possession (which keys may either be
      delivered to the Settlement or left at the respective Real Property).

    

    (e)    The
      items
      of revenue and expense with respect to the Hotel set forth in this Section
      7(e)
      shall be prorated between Seller and Buyer as of the Cut-Off Time, so that
      the
      Settlement Date is a day of income and expense for Buyer. Buyer shall receive
      a
      credit for items of expense in this Section 7(e) to the extent the same are
      accrued or due and payable but unpaid as of the Cut-Off Time in which case
      Buyer
      shall be obligated to pay such expense, and Seller shall receive a credit for
      any of the items of expense in this Section 7(e) which have been paid prior
      to
      or at the Settlement or will be paid by Seller after the Settlement to the
      extent such payment related to any period of time after the Cut-Off
      Time.

    

    (i)    Buyer
      shall receive a credit for all prepaid deposits for Bookings scheduled for
      accommodations or events on or after the Settlement Date which Buyer is
      obligated to honor pursuant to this Agreement, except to the extent such
      deposits are transferred to Buyer.

    

    (ii)    Seller
      shall remove all monies from all vending machines, laundry machines, pay
      telephones and other coin-operated equipment as of the Cut-Off Time and shall
      retain all monies collected therefrom as of the Cut-Off Time, and Buyer shall
      be
      entitled to any monies collected therefrom after the Cut-Off
      Time.

    
      
        
        

      

      
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    (iii)   Except
      to
      the extent an adjustment or proration is made under another subsection of this
      Section, (i) Seller shall pay in full prior to the Settlement all amounts
      payable to vendors or other suppliers of good or services to the Hotel (the
      “Trade
      Payables”)
      which
      are due and payable as of the Settlement Date for which goods or services have
      been delivered to the Hotel prior to Settlement, and (ii) Buyer shall receive
      a
      credit for the amount of such Trade Payables which have accrued, but are not
      yet
      due and payable as of the Settlement Date, and Buyer shall pay all such Trade
      Payables accrued as of the Settlement Date when such Trade Payables becomes
      due
      and payable; provided, however, Seller and Buyer shall reprorate the amount
      of
      credit for any Trade Payables and pay any deficiency in the original proration
      to the other Party promptly upon receipt of the actual bill for such goods
      or
      services. Seller shall receive a credit for all advance payments or deposits
      made with respect to goods and services ordered in the ordinary course of
      business, but not delivered to the Hotel prior to the Settlement Date, and
      Buyer
      shall pay the amounts which become due and payable for such goods and services
      which were ordered prior to Settlement but not delivered to the Hotel prior
      to
      the Settlement Date. Notwithstanding the foregoing, Seller shall pay for (x)
      the
      upgraded linen and bedding package required by Marriott and (y) the chairs
      for
      the Langhorne Courtyard lounge, both of which have already been ordered by
      Seller but may not be delivered until after Settlement. The re-proration
      obligations in this Section 7(e)(iii) shall survive the Settlement.

    

    (iv)   At
      Settlement, Seller shall receive a credit in an amount equal to: (i) all amounts
      charged to the Guest Ledger for all room nights up to and including the night
      during which the Cut-Off time occurs, and Buyer shall be entitled to retain
      all
      deposits made and amounts collected for such Guest Ledger.

    

    (v)    At
      Settlement, Seller shall receive a credit for all Accounts Receivable (other
      than the Guest Ledger which is addressed in subparagraph iv above) in an amount
      equal to the Accounts Receivable which are unpaid for not more than ninety
      (90)
      days, and Buyer shall be entitled to all amounts collected for such Accounts
      Receivable. 

    

    (vi)    No
      later
      than the day prior to Settlement, Seller and Buyer, through their respective
      employees, agents or representatives, jointly shall make such examinations,
      audits and inventories of the Hotel as may be necessary to make the adjustment
      and prorations to the Purchase Price as set forth herein. Based upon such
      examinations, audits and inventories, Seller and Buyer jointly shall prepare
      prior to Settlement a settlement statement (“Settlement
      Statement”),
      which
      shall set forth Seller’s and Buyer’s best estimate of the amounts of the items
      to be adjusted and prorated under this Agreement. The Settlement Statement
      shall
      be approved and executed by Seller and Buyer, and such adjustments and
      prorations shall be final with respect to the items set forth in the Settlement
      Statement, except to the extent any such items shall be reprorated after the
      Settlement as expressly set forth in Section 7(e)(iii).

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (f)    Without
      limitation to other conditions set forth in this Agreement, and notwithstanding
      anything contained herein to the contrary, Buyer's obligation to close hereunder
      is expressly contingent upon the satisfaction, or the express written waiver,
      of
      the following conditions:

    

    (i)    As
      of the
      Settlement, title to the Real Property shall be as required by Section 4 of
      this
      Agreement;

    

    (ii)    All
      representations and warranties made by Seller in this Agreement shall be true,
      complete and accurate as of the Settlement Date
      and
      Seller shall have executed and delivered to the Buyer at Settlement a
      certificate to the foregoing effect;
      

    

    (iii)    Seller
      shall have performed, observed and complied with all agreements, covenants
      and
      obligations to be performed by Seller under this Agreement, including without
      limitation, the execution and/or delivery of all documents required to be
      executed and/or delivered by or on behalf of Seller hereunder;

    

    (iv)    Marriott
      shall have consented in writing to the sale of the Property to Buyer as
      contemplated in this Agreement and shall have approved in writing the granting
      of a new franchise license for each Hotel to Buyer or an affiliate of Buyer
      (collectively, “Marriott Approval”). Buyer
      shall use diligent efforts to obtain Marriott Approval, and Seller shall use
      diligent efforts in assisting Buyer in obtaining Marriott Approval and shall
      fully cooperate with Buyer's application and pursuit of the same. In the event
      that Buyer is unable to obtain Marriott Approval on or before the Settlement
      Date, then either (i) the parties hereto shall agree to extend the Settlement
      Date, or (ii) Buyer, at Buyer's sole option, may elect to terminate this
      Agreement and immediately receive a full refund of the Deposit with interest
      thereon;

    

    (v)    From
      the
      date hereof to and including the Settlement Date, Seller shall comply with
      and
      perform all of the duties and obligations of the licensee under the franchise
      license for each Hotel and Seller shall not be in default under any such
      franchise license; and

    

    (vi)    On
      the
      Settlement Date, Seller shall terminate its existing management agreement,
      if
      any, for each Hotel, and Seller shall be responsible for all fees and costs
      associated with such terminations. On the Settlement Date, following the
      termination of the existing management agreements, Seller, or one or more
      affiliates of Seller, shall enter into the Management Agreement and Asset
      Management Agreement (as each is defined in Section 12) for each
      Hotel.

    

    (vii)   On
      or
      before the Settlement Date, Buyer and Seller shall have executed the agreements
      referred to in Sections 6(f), 11(m) and 11(n). 

    

    If
      the
      conditions precedent in this Section 7(f) above are not satisfied as of the
      Settlement Date, Buyer may exercise any of the remedies set forth in this
      Agreement, as applicable, or waive such conditions in whole or in part and
      proceed to Settlement. Notwithstanding the foregoing, if the condition set
      forth
      in Section 7(f)(i) above is not satisfied, Buyer’s sole remedy shall be to
      exercise the remedies set forth in Section 4 above, and if the condition set
      forth in Section 7(f)(iv) above is not satisfied, Buyer’s sole remedy shall be
      to exercise the remedies set forth in Section 7(f)(iv) above. 

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    

    (g)    Without
      limitation to other conditions set forth in this Agreement, and notwithstanding
      anything contained herein to the contrary, Seller's obligation to close
      hereunder is expressly contingent upon the satisfaction, or the express written
      waiver, of the following conditions:

    

    (i)    All
      representations and warranties made by Buyer in this Agreement shall be true,
      complete and accurate in all material respects as of the Settlement Date;

    

    (ii)   Buyer
      shall have performed, observed and complied with all agreements, covenants
      and
      obligations to be performed by Buyer under this Agreement, including without
      limitation, the payment of the balance of the Purchase Price and the execution
      and/or delivery of all documents required to be executed and/or delivered by
      or
      on behalf of Buyer hereunder;

    

    (iii)  
Marriott
      shall have provided Marriott Approval; and 

    

    (iv)   On
      the
      Settlement Date, following the termination of the existing management agreements
      by Seller, Buyer or one or more of its affiliates, shall enter into the
      Management Agreement and Asset Management Agreement (as each is defined in
      Section 12) for each Hotel.

    

    (v)    On
      or
      before the Settlement Date, Buyer and Seller shall have executed the agreements
      referred to in Sections 6(f), 11(m) and 11(n). 

    

    If
      the
      conditions precedent in this Section 7(g) above are not satisfied as of the
      Settlement Date, Seller may exercise any of the remedies set forth in this
      Agreement, as applicable, or waive such conditions in whole or in part and
      proceed to Settlement. Notwithstanding the foregoing, the condition set forth
      in
      Section 7(g)(iii) above is not satisfied, Buyer’s sole remedy shall be to
      exercise the remedies set forth in Section 7(f)(iv) above. 

    

    (h)    Without
      limiting the generality of any provision of this Section 7, Seller shall be
      liable for the payment of all sales, use and personal property taxes owed by
      Seller as of the Settlement Date. Seller shall pay all sales, use and personal
      property taxes for the last billing cycle ending before Settlement on or before
      the due date for such billing cycle, and shall pay all sales, use and personal
      property taxes for the billing cycle in which the Settlement Date occurs on
      or
      before the due date for such billing cycle (provided that Seller’s obligation
      for such taxes shall end as of the Cut-Off Time). Seller shall indemnify, defend
      and hold Buyer Indemnified Parties harmless from any and all liability, claims,
      fines, costs, liens or damages as a result of or in connection with any taxes,
      whether or not settled, assessed or determined as of the Settlement Date, owed
      by Seller for the period prior to and including the Cut-Off Time, including,
      without limitation, those taxes owed by Seller under the New Jersey Sales and
      Use Tax Act and the Business Personal Property Tax Act. The provisions of this
      Section 7(h) shall survive Settlement. 

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

    8.    Settlement
      Documents.
      

    

    (a)    At
      the
      time and place of Settlement, Seller shall deliver or cause to be delivered
      to
      Buyer the following:

    

    (i)            the
      Deeds; 

    

    (ii)   a
      bill of
      sale whereby Seller shall convey to Buyer its interest in the Personal Property
      (the “Bill of Sale”); 

    

    (iii)         
      an
      assignment whereby Seller will assign and Buyer shall assume all of Seller's
      right, title, and interest, including all the obligations of Seller, in, to
      and
      under the Van Lease and any warranties, Licenses, Permits and Approvals
      -(hereinafter referred to as the "Assign-ment");

    

    (iv)   an
      affidavit pursuant to the Foreign Investment in Real Property Act stating that
      Seller is not a foreign person;

    

    (v)    a
      Seller's title affidavit and such other documents as may be reasonably requested
      by the Title Company or Buyer’s attorney relating to the conveyance of the
      Property;

    

    (vi)   all
      Licenses, including without limitation a final certificate of occupancy for
      the
      Hotels, and as many signed originals (or true and correct copies of same) of
      the
      other items covered by the Assignment as are in Seller's possession (all of
      which shall be left in the respective Real Property if currently located there);
      

    

    (vii)        
      all
      equipment operating manuals and all equipment warranties and equipment
      guarantees, if any, in Seller's possession (all of which shall be left in the
      respective Real Property if currently located there); 

    

    (viii)       
      all
      master and duplicate keys to all locks for the Real Property which are in
      Seller's possession (all of which shall be left in the respective Real Property
      if currently located there);

    

    (ix)    the
      Management Agreement and Asset Management Agreement; 

    

    (x)    The
      certificate required under Section 7(f)(ii);

    

    (xi)    A
      set of
      all guest registration cards, guest transcripts, guest histories, and all other
      available guest information;

     

    (xii)    A
      list of
      advance room reservations, functions and the like, in reasonable detail so
      as to
      enable Buyer to honor the Seller’s advance room reservations;

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    

    (xiii)        
      To
      the
      extent not previously delivered to Buyer during the Due Diligence Period, all
      books, records, operating reports, appraisal reports, files, real estate and
      personal property tax bills, and other materials relating to the Hotels in
      the
      Seller’s possession or control;

    

    (xiv)        
      such
      other documents as may be reasonably requested by Buyer to carry out the intent
      of this Agreement or by the Title Company.

    

    (b)    At
      the
      time and place of Settlement, Buyer shall deliver or cause to be delivered
      to
      Seller the following:

    

    (i)    
the
      balance of the Purchase Price; 

    

    (ii)            a
      counterpart of the Assignment; 

    

    (iii)           the
      Management Agreement and Asset Management Agreement; and

    

    (iv)           such
      other documents as may be reasonably requested by Seller to carry out the intent
      of this Agreement or by the Title Company.

    

    9.    Risk
      of Loss.
       All
      risk
      of loss shall be on Seller prior to Settlement. Except as set forth in the
      next
      sentence, in the event that there is a casualty or condemnation of all or any
      portion of the Property, Buyer may, at its sole discretion, either (i) continue
      to Settlement without an abatement in Purchase Price, in which event Seller
      shall and/or shall cause Manager to assign all insurance proceeds and rights
      to
      insurance proceeds for such casualty or all condemnation awards for such
      condemnation, as applicable, to Buyer or (ii) terminate this Agreement, in
      which
      event the Deposit, plus all accrued interest, shall be promptly delivered to
      Buyer and this Agreement shall be null and void and of no force or effect and
      all copies shall be canceled. Notwithstanding the foregoing, in the event that
      the Property is damaged by fire or other casualty and the estimated cost to
      repair such damage is less than $500,000.00 and such damage is fully insured,
      Buyer shall not have the right to terminate the Agreement provided that Seller
      shall either (i) continue to Settlement without an abatement in Purchase Price,
      and Seller shall assign and/or cause Manager to assign all insurance proceeds
      and rights to insurance proceeds for such casualty to Buyer, or (ii) repair
      such
      damaged portion of the Property to the condition that existed prior to such
      damage, in which case Settlement shall be extended for such reasonable period
      of
      time, not to exceed sixty (60) days, if such repair or restoration cannot be
      reasonably completed prior to Settlement; and in the event Seller has not fully
      completed restoration of the damaged Property within such 60-day period, Buyer
      shall have the right to terminate this Agreement and receive a full refund
      of
      the Deposit and interest thereon. Notwithstanding anything herein to the
      contrary, in the event a casualty or condemnation is uninsured or underinsured,
      Buyer shall have the right to terminate this Agreement and receive a full refund
      of the Deposit and interest thereon. 

    

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    
       

      10.    Confidentiality

       

    

    (a)    Seller
      and Buyer shall keep confidential and not make any public announcement or
      disclose any terms of this Agreement, any information disclosed by Buyer’s due
      diligence inspections or in any due diligence materials delivered to Buyer,
      and
      any other documents, materials, data or other information with respect to the
      Hotel which is not generally known to the public (the “Confidential
      Information”); provided, however, that Seller and Buyer shall be permitted to
      (i) disclose any Confidential Information to the extent required by court order
      or under applicable law, (ii) make a public announcement regarding the
      transaction contemplated in this Agreement, provided that Seller and Buyer
      shall
      approve the form and substance of any such public announcement, which approval
      shall not be unreasonably withheld, conditioned or delayed, or (iii) disclose
      any Confidential Information to any person on a “need-to-know” basis, such as
      their respective directors, officers, partners, members, employees, attorneys,
      accountants, consultants, engineers, surveyors, lenders, investors, managers,
      franchisors and such other persons whose assistance is required to consummate
      the transactions contemplated in this Agreement; provided, however, that Seller
      or Buyer (as the case may be) shall (a) advise such person of the confidential
      nature of such Confidential Information, and (b) use commercially reasonable
      efforts to cause such person to maintain the confidentiality of such
      information. This Section 10(a) shall survive the termination of this Agreement
      and Settlement. Notwithstanding anything in this Section 10(a) to the contrary,
      Buyer shall have the right to refer to this Agreement and the transactions
      contemplated hereby in any filing pursuant to any state or federal securities
      law or regulation and in the filing of a Form 8-K.

    

    (b)    Buyer
      shall not, through its employees, agents, representatives or any other person,
      directly or indirectly, initiate or pursue any communication with any Employees
      or any person representing any Employees involving any matter whatsoever,
      including with respect to the Hotel, the Real Property, the Employees or this
      Agreement, without Seller’s prior written consent, which consent may be withheld
      in Seller’s sole reasonable discretion, unless such communication is arranged by
      Seller. Without limiting the generality of the foregoing, the foregoing
      prohibition shall be applicable to Buyer and its agents, employees and
      representatives while conducting all due diligence investigations and if
      addressed by an Employee during the course of due diligence investigations,
      Buyer and its agents, employees and representatives shall not disclose the
      nature of their activities. All communications with Seller regarding the Hotels,
      the Real Property or any other matter covered by this Agreement shall be
      addressed to Seller either in writing as set forth in Section 15 below or by
      cell phone or email at the phone number or email address set forth on Schedule
      10(b) attached hereto. Notwithstanding the foregoing, Buyer shall have the
      right
      to interview the Senior Personnel (defined below) during the Due Diligence
      Period and thereafter; provided, however, that Buyer shall give Seller at least
      2 business days prior notice to Seller, and Charlene Schwartz shall have the
      right to be present for any such interview or shall have consented in writing
      to
      such interview without her presence. 

    

    Seller
      shall cooperate with Buyer in good faith to permit Buyer to expeditiously
      conduct due diligence on the Property in accordance with this Agreement.
      Notwithstanding anything in this Agreement to the contrary, upon at least two
      (2) business days notice to Seller, Buyer and its representatives may,
during
      the Due Diligence Period and thereafter,
      during
      normal business hours, communicate with the general manager of the Hotels and
      the senior marketing managers for the Hotels (collectively, the “Senior
      Personnel”) with Charlene Schwartz present for such communication.
      Subject
      to Buyer’s compliance with its obligations under this Section 10, Seller shall
      direct the Senior Personnel to cooperate with Buyer and its representatives
      in
      conducting its due diligence. 

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    

    11.    Operations
      Pending Settlement.
      

    

    (a)    Seller
      shall not sell, mortgage or voluntarily encumber the Real Property.

    

    (b)    Seller
      will promptly furnish Buyer with copies of all notices received by Seller
      relating to the Real Property. 

    

    (c)    Seller
      agrees that until the Settlement Date, Seller will not, without the prior
      written approval of Buyer, enter into any lease for space in nor grant any
      other
      right of possession, use or occupancy of all or any portion of the Real Property
      for a term extending beyond the date of Settlement.

    

    (d)    Seller
      shall, at its expense, maintain the Property in its present order and condition,
      make all necessary repairs and deliver the Property on the Settlement Date
      in
      the same condition it is in on the date hereof, reasonable wear and tear
      excepted.

    

    (e)    Seller
      shall notify Buyer in writing, promptly after Seller acquires knowledge thereof,
      of any facts or events that would cause any of Seller’s representations and
      warranties to be untrue or incorrect in any material respect.

    

    (f)    Seller
      shall maintain in full force and effect all applicable Licenses, Permits and
      Approvals and timely apply for renewals of all such Licenses, Permits and
      Approvals which will expire before the Settlement Date.

    

    (g)    From
      the
      date of this Agreement until the Settlement or termination of this Agreement,
      Seller and Buyer shall use commercially reasonable efforts to take, or cause
      to
      be taken, all actions and to do, or cause to be done, all things necessary,
      proper or advisable to consummate the transaction contemplated in this
      Agreement, including, without limitation, (i) obtaining all necessary consents,
      approvals and authorizations required to be obtained from any governmental
      authority or other person under this Agreement or applicable law, and (ii)
      effecting all registrations and filings required under this Agreement or
      applicable law. After the Settlement, Seller and Buyer shall use commercially
      reasonable efforts (at no cost or expense to such party, other than any de
      minimus cost or expense or any cost or expense which the requesting party agrees
      in writing to reimburse) to further effect the transaction contemplated in
      this
      Agreement. This Section 11(g) shall survive the Settlement.

    

    (h)    On
      or
      prior to the Settlement Date, Seller shall pay directly to its Employees all
      Compensation due such Employees through the date immediately prior to the
      Settlement Date, and Buyer shall not receive a credit for any Compensation.
      In
      addition, on or prior to the Settlement Date, Seller shall pay the 2005 year-end
      bonuses that are due to the managers of each of the three (3) Hotels and to
      Patrick Brogan.

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    

    (i)    Seller
      shall pay directly to the Employees all Accrued Vacation Pay due to such
      Employees through the date immediately prior to the Settlement Date on Seller’s
      first payroll date on or after the Settlement Date, and Buyer shall not receive
      a credit for any Accrued Vacation Pay.

    

    (j)    Buyer
      shall be responsible for obtaining any consents from (i) Marriott in connection
      with Marriott Approval, (ii) any licensor, vendor or supplier of any computer
      hardware or software which will remain at the Hotel and (iii) the lessor under
      the Van Lease, provided that promptly after the execution of this Agreement
      Seller contacts Marriott and informs Marriott of the transaction contemplated
      herein and authorizes Marriott to communicate with Buyer, and Seller uses
      reasonable efforts to cooperate with Buyer in obtaining Marriott Approval and
      any and all of the aforementioned consents. Buyer shall pay any fees or expenses
      charged by any of the foregoing parties in respect of such assignments or
      transfer of new licenses (as the case may be). 

    

    (k)    If
      and to
      the extent required by applicable law, Seller shall apply for a tax clearance
      certificate from the New Jersey Department of Treasury concerning the sale
      and
      transfer of the Property, but the receipt of such certificate shall not be
      a
      condition to Settlement.

    

    (l)           
       If
      and to
      the extent required by applicable law, Seller shall apply for a bulk sales
      clearance certificate from the Pennsylvania Department of Revenue concerning
      the
      sale and transfer of the Property,
      but the
      receipt of such certificate shall not be a condition to Settlement.

    

    (m)          
      During
      the Due Diligence Period, Buyer and Seller shall use their diligent good faith
      efforts to negotiate an agreement of sale for the Langhorne Residence Inn
      currently being developed by Seller at 15 Cabot Boulevard, Langhorne,
      Pennsylvania.

    

    (n)   During
      the Due Diligence Period, Buyer and Seller shall use their diligent good faith
      efforts to negotiate an agreement relating to joint future development of hotel
      deals by Buyer and Seller within a ten (10) mile radius of each of the Bethlehem
      Fairfield Property, the New Jersey Property and the Langhorne Residence
      Property.

    

    12.          
      Operations/Obligations
      After Settlement

    

    (a)    At
      Settlement, Buyer or one of its affiliates, and Seller or Solow, Inc. or one
      or
      more other affiliates of Seller as determined by Seller, shall enter into a
      management agreement pursuant to which Seller or Seller’s affiliate shall manage
      the Hotels on behalf of Buyer for a period of one (1) year from the Settlement
      Date (the “Management Agreement”). The Management Agreement shall provide that
      Seller or its affiliate will be paid a management fee equal to three and one
      half percent (3.5%) of all gross revenues derived from the operations of the
      Hotels, such fee to be paid in arrears on a monthly basis within fifteen (15)
      days following the end of each calendar month. Buyer and Seller shall use their
      best efforts to agree on the form and substance of the Management Agreement
      during the Due Diligence Period. Notwithstanding the one (1) year term of the
      Management Agreement, Seller or its affiliate executing the Management Agreement
      shall have the right to terminate the Management Agreement and turn over
      management responsibilities to Buyer at any time upon at least thirty (30)
      days
      advance written notice, provided that the actual early termination of the
      Management Agreement shall not be effective until Buyer has received consent
      for
      such termination from Marriott and Buyer’s mortgagee, provided further that
      Buyer shall promptly request such consent and diligently use its best efforts
      to
      obtain such consent within the thirty (30) day period and Buyer shall request
      that its mortgagee include a provision in its loan documents permitting the
      early termination of the Management Agreement so long as an affiliate of Buyer
      is hired to perform the management of the Hotels. At Settlement, Buyer or one
      of
      its affiliates and Hersha Hospitality Management, LP (“Asset Manager”) shall
      enter into an asset management agreement (the “Asset Management Agreement”),
      pursuant to which Asset Manager will provide accounting and support services
      for
      the Hotels for a period of one (1) year from the Settlement Date, and for such
      services Asset Manager shall earn an asset management fee of 1% of all gross
      revenues derived from the operations of the Hotels.

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    

    (b)    Seller
      shall cause its affiliate executing the Management Agreement to continue
      employing the Employees at their then-current job descriptions and then-current
      rate of Compensation during the term of the Management Agreement, as such rate
      of Compensation is scheduled to be increased in 2006 as set forth on Schedule
      5(a)(x). Seller or Employer shall not increase the salaries of the salaried
      Employees beyond the 2006 levels without first obtaining Buyer’s prior written
      consent, but Seller shall have the right to increase the wages of the hourly
      Employees in accordance with Seller’s historic compensation practices. Upon the
      expiration or sooner termination of the Management Agreement, Seller shall
      terminate (or shall cause Employer to) terminate the employment of all Employees
      effective as of the termination date of the Management Agreement (other than
      Mary Seiferman, who shall continue to be employed by Solow, Inc.), and Buyer
      shall offer employment to all of such Employees for such Employee’s current job
      description and at such Employee’s rate of Compensation and level of seniority
      enjoyed by such Employees prior to Settlement. In addition, upon the expiration
      or sooner termination of the Management Agreement, Buyer shall offer employment
      to Patrick Brogan for his then-current job description and at his then-current
      rate of Compensation (i.e., the Compensation for 2006 as set forth on Schedule
      5(a)(x)), which shall not be materially increased by Seller during the term
      of
      the Management Agreement without Buyer’s prior written consent. The terminated
      Employees who accept such offers of employment are referred to collectively
      herein as the “Rehired Employees”. Buyer shall indemnify and hold harmless the
      Seller and the Employers under the WARN Act with respect to the Employees as
      a
      result of the failure of Buyer to employ a sufficient number of the individuals
      previously employed by Seller and offer such terms of employment as required
      to
      comply with the provisions of the WARN Act; provided that Seller has complied
      with its obligations to notify Buyer of the termination of any Employees as
      set
      forth in this Section. Seller and Buyer shall agree on the form, substance
      and
      manner of delivery of any announcement or communication to the Employees
      regarding their employment or termination of employment at the Hotel.

    

    (c)    Buyer
      shall honor all Bookings made prior to the Settlement Date for any period on
      or
      after the Settlement Date. 

    

    (d)    Seller
      and Buyer shall use commercially reasonable efforts to cooperate with each
      other
      (at no cost or expense to the party whose cooperation is requested, other than
      any de minimis cost or expense or any cost or expense which the requesting
      party
      agreed in writing to reimburse) to provide written notice to any person under
      any Contracts, Licenses, Permits and Approvals, and to effect any registrations
      or filings with any governmental authority or other person, regarding the change
      in ownership or operating of the Hotel. 

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    

    (e)    After
      the
      Settlement, Buyer shall provide reasonable access to Seller and its officers,
      employees, agents and representatives to (i) the Books and Records pertaining
      only to the operations of the Hotel for any purpose deemed reasonably necessary
      or advisable by Seller, including, without limitation, to facilitate the
      preparation of any documents required to be filed by Seller under applicable
      law
      or the resolution of any audit, litigation or other proceeding, claim or charge
      made by any person or insurance claim involving Seller or any of its affiliates
      (the foregoing shall apply only to the Books and Records delivered by Seller
      to
      Buyer under this Agreement and any books and records applicable to the period
      covered by the Management Agreement and not to any books, records, reports
      or
      other information of Buyer or regarding the Hotel regardless of the source
      of
      such information); and (ii) the employees of Buyer whose assistance or testimony
      is deemed necessary or advisable by Seller to assist Seller in evaluating or
      defending any audit, litigation or other proceeding, claim or charge made by
      any
      Person or insurance claim involving any Seller or any of its affiliates;
      provided, however, that (A) Seller shall provide a written request to Buyer
      for
      such access, which shall be scheduled at the convenience of Buyer, and not
      less
      than two (2) business days after delivery of such request; (B) Buyer shall
      not
      be required to provide such access during non-business hours; (C) Buyer shall
      have the right to accompany the officer, employees, agents or representatives
      of
      Seller or its affiliate in providing access to its books and records, the
      Property or the employees of Buyer (or Buyer’s manager) as provided in this
      Section; and (D) Buyer shall incur no cost or expense, other than any de minimis
      cost or expense, or any cost or expense which Seller shall promptly reimburse
      Buyer for, in connection with providing access to information pursuant to this
      Section. Buyer, at its cost and expense, shall retain all Books and Records
      with
      respect to the Hotel for period of three (3) years after the Settlement. The
      provisions of this Section 12(e) shall survive Settlement for a period of three
      (3) years. 

    

    (f)    Seller
      and Buyer agree that, in the event Seller or its affiliates intends to complete
      closing under the existing agreement of sale with Civic Center Corporation
      regarding a portion of Bucks County Parcel No. 22-57-12 (the “Lot”), Seller
      shall give Buyer written notice thereof at least forty-five (45) days prior
      to
      the scheduled closing date, and Buyer shall have the right to acquire a
      non-controlling interest in the entity that will take title to Lot (the “Lot
      Entity”). Seller shall have the sole right to determine the form of entity used
      to acquire the Lot. Buyer shall exercise this right by giving Seller written
      notice of its acceptance no later than fifteen (15) days following the date
      on
      which Buyer received Seller’s notice. Seller and Buyer agree to negotiate and
      agree to the specific terms of the organizational documents governing the Lot
      Entity during the period between Buyer’s acceptance of Seller’s offer and the
      closing under the agreement of sale for the Lot. The provisions of this Section
      12(f) shall survive Settlement for as long as the agreement of sale for the
      Lot
      remains in full force and effect. 

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    

    (g)    Earn-Out:
      The Seller shall value the Bethlehem Fairfield, Langhorne Courtyard and Mt.
      Laurel Fairfield (the “Stabilized Properties”) on June 30, 2007. The value of
      the Stabilized Properties shall be computed by applying a 9% capitalization
      rate
      to the audited (by Buyer’s auditors) trailing 12 months’ (July 1, 2006 to June
      30, 2007) NOI for the Stabilized Properties. If the then current value of the
      Stabilized Properties exceeds $40,500,000.00, the Buyer will pay Seller on
      or
      before September 30, 2007, lawful money of the United States equal to the
      difference between the then current value of the Stabilized Properties and
      $40,500,000.00, but in no event shall such earn-out payments exceed
      $3,000,000.00 in aggregate for the Stabilized Properties. In the event that
      prior to June 30, 2007, one or more of the Stabilized Properties is sold,
      condemned, conveyed in lieu of condemnation or substantially destroyed by fire
      or other casualty and is not reconstructed prior to June 30, 2007, the “value”
of such property for purposes of this Section 12(g) shall be computed by
      applying a 9% capitalization rate to the trailing 12 months’ (i.e., the last 12
      full calendar months preceding the closing date of such sale or transfer by
      condemnation or deed in lieu thereof or the date of such casualty) NOI for
      the
      applicable property (which NOI shall be based on Buyer’s audited financial
      statements for any period following the Settlement Date and based on Seller’s
      unaudited financial statements for any period prior to the Settlement Date),
      but
      the earn-out payment for such property for purposes of this sentence only shall
      not exceed $1,550,000.00 for the Langhorne Courtyard, $800,000 for the Mt.
      Laurel Fairfield and $650,000.00 for the Bethlehem Fairfield, and the “value” of
      the other property or properties shall be determined in accordance with the
      formula set forth in the second sentence of this Section 12(g). Seller shall
      have the right to audit Buyer’s Books and Records relating to the Stabilized
      Properties in order to verify the amount of the earn-out payment. The provisions
      of this Section 12(g) shall survive Settlement and the Termination Date. In
      the
      event that Buyer fails to pay the foregoing earn-out when due, Seller shall
      have
      the right to bring appropriate legal or equitable proceedings to enforce this
      provision. 

    

    (h)    Seller
      shall cooperate with Buyer and Asset Manager
      to have
      the liquor licenses for the Hotels, if any, transferred to their name; provided,
      however, that (i) final Pennsylvania Liquor Control Board (“PLCB”) approval of
      the transfer of the liquor license to Buyer and/or Asset Manager shall not
      be a
      condition to Settlement, and (ii) if PLCB approval has not been granted prior
      to
      the Settlement Date (A) Settlement will be held without transfer of the liquor
      license or any withholding of any portion of the Purchase Price, (B) the parties
      will continue to pursue PLCB approval after Settlement, (C) the liquor license
      shall continue to be titled in the name of Seller’s Manager until PLCB approval
      has been issued, and (D) no alcohol shall be sold at the applicable Hotel until
      the license transfer has been approved by the PLCB but Manager may give alcohol
      away if permitted by applicable law. If required by the PLCB, the parties shall
      execute a separate agreement of sale for the liquor license.

    

    (i)    The
      provisions of this Section 12 shall survive Settlement for the longer of (i)
      the
      period specifically provided in the applicable subsection of this Section 12
      or
      (ii) the period set forth in Section 21.

    

    13.          
      Indemnification.

    

    (a)    Seller
      shall indemnify and hold harmless the Buyer Indemnified Parties and their
      officers, directors, shareholders, trustees, agents, employees, successors
      and
      assigns from and against any and all losses, claims,
      costs, penalties, damages, liabilities and expenses incurred
      by any of the Buyer Indemnified Parties after the Settlement to the extent
      resulting from (i) subject to Section 21, the breach by Seller of any of its
      covenants, obligations, representations and/or warranties under this Agreement
      which expressly survive the Settlement, or (ii) any taxes owed by Seller to
      any
      taxing authority for periods prior to the Cut-off Time, or (iii) the operations
      of the Hotels by Seller and/or Manager prior to the Settlement Date, except
      to
      the extent that any of the foregoing are caused by any of the Buyer Indemnified
      Parties. 

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    

    (b)    Buyer
      shall indemnify and hold harmless Seller and its Manager and their respective
      officers, directors, shareholders, trustees, agents, employees, successors
      and
      assigns (“Seller Indemnified Parties”) from and against any and all losses,
      claims, costs, penalties, damages, liabilities and expenses incurred by the
      Seller Indemnified Parties after the Settlement to the extent resulting from
      (i)
      subject to Section 21, the breach by Buyer of any of its covenants, obligations,
      representations and/or warranties under this Agreement which expressly survive
      the Settlement, or (ii) the operation of the Hotels by Buyer after the
      Settlement Date, except to the extent that any of the foregoing are caused
      by
      the Seller Indemnified Parties. 

    

    (c)    The
      provisions of this Section 13(a)(i) and 13(b)(i) shall survive Settlement until
      the Termination Date, subject to the provisions of Section 21. Notwithstanding
      anything to the contrary contained in this Agreement, the remaining provisions
      of Section 13(a) and 13(b) shall survive both the Settlement Date and the
      Termination Date.

    

    14.         
      Default.
      

    

    (a)    If
      Buyer’s representations and warranties contained herein are false or misleading
      in any material respect or if Buyer defaults in performing any of its material
      obligations hereunder and Buyer does not cure such default within five (5)
      days
      of receipt of notice from Seller of such default, then Seller shall have the
      right, as its sole and exclusive remedy, to terminate this Agreement and to
      be
      paid the Deposit and all interest earned thereon as liquidated damages for
      such
      breach. Notwithstanding the foregoing, if Seller elects to terminate this
      Agreement as a result of Buyer’s material default and Buyer refuses to give the
      Title Company authorization to release the Deposit to Seller and a court of
      competent jurisdiction determines that Seller properly terminated the Agreement
      of Sale, Seller shall be entitled to collect from Buyer, in addition to the
      Deposit, Seller’s actual damages suffered or incurred directly as a result of
      Buyer’s refusal to authorize the release of the Deposit, including, without
      limitation, legal costs as set forth in Section 14(c) below. 

    

    (b)    If
      Seller’s representations and warranties contained herein are false or misleading
      in any material respect or if Seller shall fail or refuse to complete Settlement
      for reasons other than Buyer's default or a failure of a condition precedent
      to
      Settlement or if Seller defaults in performing any of its material obligations
      hereunder and Seller does not cure such default within five (5) days of receipt
      of notice from Buyer of such default, Buyer shall have the right, as its sole
      and exclusive remedy, to either seek specific performance of this Agreement
      or
      to terminate this Agreement and recover the Deposit and interest earned thereon.
      

    

    (c)    In
      any
      litigation brought by the parties to enforce their respective remedies under
      Sections 14(a) or 14(b) above, the prevailing party in such litigation shall
      be
      entitled to recover its reasonable legal fees from the non-prevailing party
      as
      part of the relief granted in such action. 

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    

    (d)    Tender
      at
      the time of Settlement of an executed Deed by Seller and the balance of the
      Purchase Price by Buyer are hereby mutually waived, but nothing herein contained
      shall be construed as to relieve Seller from the obligation to deliver the
      Deeds
      or to relieve Buyer from the concurrent obligation to pay the balance of the
      Purchase Price.

    

    15.         
      Notices. In addition to the provisions of Section 10(b) above, all
      notices to be given to Seller and/or to Buyer shall be mailed by registered
      or
      certified mail, return receipt requested or an overnight service with receipt,
      to the addresses set forth in the preamble to this Agreement. All notices to
      Seller shall be copied to Seller’s counsel, John D. Benson, Esquire, Sirlin
      Gallogly & Lesser, P.C., 1529 Walnut Street, Suite 600, Philadelphia,
      Pennsylvania 19102; Telephone: 215-864-9700; Facsimile: 215-864-9669 and to
      Buyer’s counsel, Lok Mohapatra, Esquire, Shah & Byler, LLP, Penn Mutual
      Towers, 510 Walnut Street, 9th Floor, Philadelphia, PA 19106; Telephone:
      215-238-1045; Facsimile: 267-238-1874. Any notice required hereunder may be
      given on behalf of a party by that party’s legal counsel. Any notice shall be
      deemed received when actually received or refused by the party to whom such
      notice was directed. 

    

    16.          
      Status
      of Escrow Holder.
      It is
      expressly understood, covenanted and agreed that:

    

    (a)    The
      duties of Escrow Holder are only as herein specifically provided, and are purely
      ministerial in nature, and Escrow Holder shall incur no liability whatever
      except for willful misconduct or gross negligence, as long as Escrow Holder
      has
      acted in good faith.

    

    (b)    Seller
      and Buyer each hereby release and indemnify Escrow Holder from and against
      any
      act done or omitted to be done by Escrow Holder in good faith in the performance
      of its duties hereunder, except to the extent such act constitutes willful
      misconduct or gross negligence.

    

    (c)    Escrow
      Holder is acting as a stakeholder only with respect to the Deposit. If there
      is
      any dispute as to whether Escrow Holder is obligated to deliver the Deposit
      or
      as to whom the Deposit is to be delivered, Escrow Holder shall not be required
      to make any delivery, but in such event Escrow Holder may hold the same until
      receipt by Escrow Holder of an authorization in writing, signed by all of the
      parties having any interest in such dispute, directing the disposition of the
      Deposit and any interest accrued thereon or until the final determination of
      the
      rights of the parties in an appropriate proceeding. If such written
      authorization is not given, or proceedings for such determination are not begun
      within thirty (30) days after Settlement was to have occurred, Escrow Holder
      may, but is not required to, bring an appropriate action or proceeding for
      leave
      to deposit the Deposit in court pending such determination. Escrow Holder shall
      be reimbursed for all costs and expenses of such action or proceeding by Seller
      and Buyer including, without limitation, reasonable attorneys' fees and
      disbursements. Upon making delivery of the Deposit in the manner provided in
      this Agreement, Escrow Holder shall have no further liability hereunder or
      to
      Buyer or Seller.

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    

    17.    Broker.
      Buyer
      and Seller each represent to the other that they have not dealt with any broker,
      agent or other finder in connection with the sale of the Property and agree
      to
      indemnify the other against any claim for a commission brought by any other
      broker, agent or other finder claiming to have worked for the respective party.
      

    

    18.    Entire
      Agreement.
      This
      Agreement sets forth all the agreements, promises, warranties, representations,
      understandings and promises between the parties hereto, and the parties are
      not
      bound by any agreements, undertakings or conditions except as expressly set
      forth herein. All additions, variations or modifications to this Agreement
      shall
      be void and ineffective unless in writing and signed by the
      parties.

    

    19.    Assignment;
      Successors and Assigns.
      Buyer
      shall have the right to assign its right to take title to the Property to an
      entity in which Buyer is the direct or indirect owner of a majority of the
      ownership interests. In the event of any permitted assignment, Buyer and the
      assignee shall remain jointly and severally liable for the performance of all
      of
      Buyer’s obligations under this Agreement. This Agreement shall extend to, be
      binding upon, and inure to the benefit of the heirs, executors, administrators
      and successors of the parties hereto.

    

    20.    Governing
      Law.
      This
      Agreement shall be construed and interpreted in accordance with the laws of
      the
      Commonwealth of Pennsylvania.

    

    21.    Merger.
       The
      representations and warranties set forth in this Agreement shall survive
      Settlement until the one hundred eightieth (180th)
      day
      following the expiration or sooner termination of the Management Agreement
      (the
“Termination Date”). All of the covenants and agreements of the Seller and the
      Buyer made in, or pursuant to, this Agreement that expressly survive Settlement
      shall survive until the Termination Date, except as otherwise expressly provided
      in this Agreement. On the Termination Date, all representations, warranties,
      covenants and agreements that are to terminate on that date shall terminate
      unless either party shall have given the other party written notice that such
      party has a claim for a breach of a specific representation, warranty, covenant
      or agreement specified in such notice (the “Specified Claim”), in which case the
      party claiming such Specified Claim shall have one (1) year to bring suit
      against the other party on account of such Specified Claim. Except for the
      representations, warranties, covenants and agreements that survive Settlement
      pursuant to this Section 21, all other representations, warranties, covenants
      and agreements shall merge into the Deeds or any other document or instrument
      executed and delivered in connection herewith. 

    

    22.    No
      Recording.
      This
      Agreement shall not be recorded in any governmental recording office without
      the
      express written consent of Seller.

    

    23.    Tax
      Deferred Exchange.
      Buyer
      understands that Seller may desire to exchange the Real Property for other
      property of like kind and qualifying use within the meaning of Section 1031
      of
      the Internal Revenue Code. Towards that end, Buyer hereby grants Seller the
      right to assign its rights, but not its obligations, under this Agreement to
      a
      qualified intermediary as provided in Treasury Regulation Section
      1.1031(k)-1(g)(4) at any time prior to Settlement. Buyer agrees to cooperate
      with Seller to facilitate the like kind exchange as long as Buyer shall not
      incur any additional liabilities, costs, or expenses as a result of such
      cooperation and, in addition, Buyer shall not be required to adversely change
      any of the terms and conditions of this Agreement, nor to take title to, nor
      enter into an acquisition agreement for any other property.

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    

    24.    No
      Partnership.
      This
      Agreement does not and shall not be construed to create a partnership, joint
      venture or any other relationship between the parties hereto except the
      relationship of Seller and Buyer specifically established hereby.

    

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

    

    26.    Seller.
      Buyer
      acknowledges that the Property is not owned jointly by each of the parties
      comprising Seller, but that certain portions of the Property are owned by
      Charlene Schwartz, other portions by Langhorne Courtyard, Inc., other portions
      by Mt. Laurel FFI, Inc. and other portions by Bethlehem FFI, Inc. Any
      representation, warranty or covenant made by “Seller” with respect to the
“Property” or the “Real Property” shall be deemed to have been made, and shall
      be required to be performed only, by the party owning such Property or Real
      Property with respect to the individual portions of the Property that each
      person or entity owns itself and not with respect to the individual portions
      of
      the Property that the other person or entities owns. For example, and without
      limiting the generality of the foregoing, Charlene Schwartz shall not be liable
      for any breach of a representation, warranty or covenant made by Langhorne
      Courtyard, Inc. with respect to the portion of the Property owned individually
      by Langhorne Courtyard, Inc. 

    

    27.    Schedules.
      Buyer
      and Seller shall use their best efforts to agree on the Schedules to be attached
      to this Agreement no later than October 28, 2005. If the parties have not agreed
      to the Schedules by 5:00 p.m. on October 28, 2005, either party may terminate
      this Agreement at any time until the parties have agreed on the Schedules.
      

    

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused these presents to be duly
      executed and their corporate seal to be duly attached by their proper officials
      thereunto duly authorized, the day and year first above written.

    

    
      	 	 	 	 	 
	 	 	
              SELLER: 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	  	 
	
              Witness

            	 	
              CHARLENE
                SCHWARTZ 

            	 
	 	 	 	 	 
	 	 	
              LANGHORNE
                COURTYARD, INC. 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	 	 
	
              Witness

            	 	
               CHARLENE
                SCHWARTZ, President

            	 
	 	 	 	 	 
	 	 	
              MT.
                LAUREL FFI, INC. 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	 	 
	
              Witness

            	 	
               CHARLENE
                SCHWARTZ, President

            	 
	 	 	 	 	 
	 	 	
              BETHLEHEM
                FFI, INC. 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	 	 
	
              Witness

            	 	
               CHARLENE
                SCHWARTZ, President

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              BUYER: 

            	 
	 	 	 	 	 
	 	 	
              HERSHA
                HOSPITALITY TRUST 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	 	 
	
              Witness

            	 	 	
              Name:

            	 
	 	 	 	
              Title:
                

            	 

    

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    The
      undersigned is joining in this Agreement for the sole purpose of agreeing to
      be
      bound by the provisions of this Agreement insofar as such provisions relate
      to
      the duties of Escrow Holder and the holding and distribution of the
      Deposit.

    

    
      	 	
              [TITLE
                COMPANY] 

            	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	
              By:

            	 	 

    

     

    32

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