Document:

Exhibit 10.8

    
      
        

      

      Exhibit
        10.8

       

      CONDITIONAL
        PAYMENT GUARANTY

       

      THIS
        CONDITIONAL PAYMENT GUARANTY ("Guaranty")
        made
        as of February 8, 2006, by HERSHA HOSPITALITY LIMITED PARTNERSHIP, a Virginia
        limited partnership and MYSTIC HOTEL INVESTORS, LLC, a Delaware limited
        liability company (collectively, "Guarantors"),
        to
        and for the benefit of MERRILL LYNCH CAPITAL, a Division of Merrill Lynch
        Business Financial Services Inc., a Delaware corporation, its successors
        and
        assigns ("Lender").

      

      R
        E C I T A L S

      

      A.    On
        or
        about the date hereof, Adriaen's Landing Hotel, LLC, a Connecticut limited
        liability company ("Borrower")
        and
        Lender entered into that certain Loan Agreement ("Loan
        Agreement")
        whereby Lender agreed to make a first mortgage loan (the "Loan")
        available to Borrower in the maximum aggregate amount up to Fifty Million
        and
        No/100ths Dollars ($50,000,000.00), for, among other things, the refinance
        of
        the Hartford Marriott Hotel located in Hartford, Connecticut (the "Project").
        Capitalized terms used and not otherwise defined herein shall have the meanings
        given to them in the Loan Agreement.

      

      B.    In
        connection with the Loan, Borrower has executed and delivered a certain
        Promissory Note (the "Note")
        in
        favor of Lender of even date herewith in the maximum principal amount of
        the
        Loan, payment of which is secured by (i) a certain Open-End Mortgage Deed,
        Assignment of Leases and Rents, Security Agreement and Fixture Filing of
        even
        date herewith made by Borrower in favor of Lender (the "Mortgage")
        against the Project, and (ii) the other Loan Documents.

      

      C.    Guarantors
        are signatories to the Supplemental Limited Joinder attached to and made
        a part
        of the Loan Agreement.

      

      D.    Guarantors
        will derive material financial benefit from the Loan evidenced and secured
        by
        the Note, the Mortgage and
        the
        other Loan Documents.

      

      E.    Lender
        has relied on the statements and agreements contained herein in agreeing
        to make
        the Loan. The execution and delivery of this Guaranty by Guarantors is a
        condition precedent to the making of the Loan by Lender.

      

      AGREEMENTS

      

      NOW,
        THEREFORE, intending to be legally bound, Guarantors, in consideration of
        the
        matters described in the foregoing Recitals, which Recitals are incorporated
        herein and made a part hereof, and for other good and valuable consideration
        the
        receipt and sufficiency of which are acknowledged, hereby covenants and agrees
        for the benefit of Lender and its successors, indorsees, transferees,
        participants and assigns as follows:

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        1.    Guarantors
          absolutely, unconditionally and irrevocably guarantee:

        

        (a)    the
          full
          and prompt payment of the principal of and interest on the Note when due,
          whether at stated maturity, upon acceleration or otherwise, and at all
          times
          thereafter, and the full and prompt payment of all sums which may now be
          or may
          hereafter become due and owing under the Note, the Loan Agreement and the
          other
          Loan Documents;

        

        (b)    the
          prompt, full and complete performance of all of Borrower's obligations
          under
          each and every covenant contained in the Loan Documents; and

         

        (c)    the
          full
          and prompt payment of any Enforcement Costs (as hereinafter defined in
          Section
          7
          hereof);

        

      

      All
        amounts due, debts, liabilities and payment obligations described in subsections
        (a) and (b) of this Section 1
        shall be
        hereinafter collectively referred to as the "Indebtedness."
        Notwithstanding any provisions hereof to the contrary, the obligations and
        liabilities of Guarantors under this Guaranty are contingent upon the occurrence
        and continuation of a Condition Subsequent and, therefore, this Guaranty
        will
        only be effective and enforceable if a Condition Subsequent occurs. For purposes
        hereof, "Condition
        Subsequent"
        means
        if at any time and any and all periods during which the net worth of Mystic
        Partners, LLC (calculated based on the undepreciated historical costs of
        the
        assets of Mystic Partners, LLC, as set forth on Schedule II to the Loan
        Agreement) is less than Fifty Million and No/100ths Dollars ($50,000,000.00).
        Notwithstanding anything contained in this Guaranty to the contrary, if
        (i) a Condition Subsequent occurs or is in existence at any time on or
        after the date on which Lender has accelerated the Loan in accordance with
        the
        Loan Agreement or (ii) Lender has commenced enforcement of this Guaranty,
        Lender shall at all times thereafter be entitled to enforce all of its rights
        and remedies hereunder.

      

      2.    In
        the
        event of any default by Borrower in the payment of the Indebtedness, after
        the
        expiration of any applicable cure or grace period, Guarantors agree, on demand
        by Lender or any holder of the Note (which demand may be made concurrently
        with
        notice to Borrower that Borrower is in default of its obligations), to pay
        the
        Indebtedness regardless of any defense, right of set-off or claims which
        Borrower or Guarantors may have against Lender or the holder of the
        Note.

      

      All
        of
        the remedies set forth herein and/or provided for in any of the other Loan
        Documents or at law or equity shall be equally available to Lender, and the
        choice by Lender of one such alternative over another shall not be subject
        to
        question or challenge by Guarantors or any other person, nor shall any such
        choice be asserted as a defense, setoff, or failure to mitigate damages in
        any
        action, proceeding, or counteraction by Lender to recover or seeking any
        other
        remedy under this Guaranty, nor shall such choice preclude Lender from
        subsequently electing to exercise a different remedy. The parties have agreed
        to
        the alternative remedies provided herein in part because they recognize that
        the
        choice of remedies in the event of a default hereunder will necessarily be
        and
        should properly be a matter of good faith business judgment, which the passage
        of time and events may or may not prove to have been the best choice to maximize
        recovery by Lender at the lowest cost to Borrower and/or Guarantor. It is
        the
        intention of the parties that such good faith choice by Lender be given
        conclusive effect regardless of such subsequent developments.

      
        
          
          

        

        
          -
            2 -

          
            

          

        

        
          
          

        

      

      

      3.    Guarantors
        do hereby (a) waive notice of acceptance of this Guaranty by Lender and any
        and all notices and demands of every kind which may be required to be given
        by
        any statute, rule or law, (b) agree to refrain from asserting, until after
        repayment in full of the Loan, any defense, right of set-off or other claim
        which Guarantors may have against Borrower, (c) waive any defense, right
        of
        set-off or other claim which Guarantors or Borrower may have against Lender
        or
        the holder of the Note, (d) waive any and all rights Guarantors may have
        under
        any anti-deficiency statute or other similar protections, (e) waive all
        rights at law or in equity to seek subrogation, contribution, indemnification
        or
        any other form of reimbursement or repayment from Borrower or any other person
        or entity now or hereafter primarily or secondarily liable for any of the
        Indebtedness until the Indebtedness has been satisfied in full, (f) waive
        presentment for payment, demand for payment, notice of nonpayment or dishonor,
        protest and notice of protest, diligence in collection and any and all
        formalities which otherwise might be legally required to charge Guarantors
        with
        liability, and (f) waive any failure by Lender to inform Guarantors of any
        facts Lender may now or hereafter know about Borrower, the Project, the Loan,
        or
        the transactions contemplated by the Loan Agreement, it being understood
        and
        agreed that Lender has no duty so to inform and that Guarantors are fully
        responsible for being and remaining informed by Borrower of all circumstances
        bearing on the risk of nonperformance of Borrower's obligations. Credit may
        be
        granted or continued from time to time by Lender to Borrower without notice
        to
        or authorization from Guarantors, regardless of the financial or other condition
        of Borrower at the time of any such grant or continuation. Lender shall have
        no
        obligation to disclose or discuss with Guarantors its assessment of the
        financial condition of Borrower. Guarantors acknowledge that no representations
        of any kind whatsoever have been made by Lender. No modification or waiver
        of
        any of the provisions of this Guaranty shall be binding upon Lender except
        as
        expressly set forth in a writing duly signed and delivered by
        Lender.

      

      4.    Guarantors
        further agree that Guarantors' liability as guarantors shall not be impaired
        or
        affected by any renewals or extensions which may be made from time to time,
        with
        or without the knowledge or consent of Guarantors of the time for payment
        of
        interest or principal under the Note or by any forbearance or delay in
        collecting interest or principal under the Note, or by any waiver by Lender
        under the Loan Agreement, Mortgage or
        any
        other Loan Documents, or by Lender's failure or election not to pursue any
        other
        remedies it may have against Borrower or Guarantors, or by any change or
        modification in the Note, Loan Agreement, Mortgage or any other Loan Document,
        or by the acceptance by Lender of any additional security or any increase,
        substitution or change therein, or by the release by Lender of any security
        or
        any withdrawal thereof or decrease therein, or by the application of payments
        received from any source to the payment of any obligation other than the
        Indebtedness even though Lender might lawfully have elected to apply such
        payments to any part or all of the Indebtedness, it being the intent hereof
        that, subject to Lender's compliance with the terms of this Guaranty, Guarantors
        shall remain liable for the payment of the Indebtedness, until the Indebtedness
        has been paid in full, notwithstanding any act or thing which might otherwise
        operate as a legal or equitable discharge of a surety. Guarantors further
        understand and agree that Lender may at any time enter into agreements with
        Borrower to amend and modify the Note, Loan Agreement, Mortgage or
        other
        Loan Documents, and may waive or release any provision or provisions of the
        Note, Loan Agreement, Mortgage and
        other
        Loan Documents or any thereof, and, with reference to such instruments, may
        make
        and enter into any such agreement or agreements as Lender and Borrower may
        deem
        proper and desirable, without in any manner impairing or affecting this Guaranty
        or any of Lender's rights hereunder or Guarantors' obligations
        hereunder.

      
        
          
          

        

        
          -
            3 -

          
            

          

        

        
          
          

        

      

      

      

      5.    This
        is
        an absolute, present and continuing guaranty of payment and not of collection.
        Guarantors agree that this Guaranty may be enforced by Lender without the
        necessity at any time of resorting to or exhausting any other security or
        collateral given in connection herewith or with the Note, Loan Agreement,
        Mortgage or
        any of
        the other Loan Documents through foreclosure or sale proceedings, as the
        case
        may be, under the Mortgage or
        otherwise, or resorting to any other guaranties, and Guarantors hereby waive
        any
        right to require Lender to join Borrower in any action brought hereunder
        or to
        commence any action against or obtain any judgment against Borrower or to
        pursue
        any other remedy or enforce any other right. Guarantors further agree that
        nothing contained herein or otherwise shall prevent Lender from pursuing
        concurrently or successively all rights and remedies available to it at law
        and/or in equity or under the Note, Loan Agreement, Mortgage or
        any
        other Loan Documents, and the exercise of any of its rights or the completion
        of
        any of its remedies shall not constitute a discharge of Guarantors' obligations
        hereunder, it being the purpose and intent of Guarantors that the obligations
        of
        Guarantors hereunder shall be absolute, independent and unconditional under
        any
        and all circumstances whatsoever. None of Guarantors' obligations under this
        Guaranty or any remedy for the enforcement thereof shall be impaired, modified,
        changed or released in any manner whatsoever by any impairment, modification,
        change, release or limitation of the liability of Borrower under the Note,
        Loan
        Agreement, Mortgage or
        other
        Loan Documents or by reason of the bankruptcy of Borrower or by reason of
        any
        creditor or bankruptcy proceeding instituted by or against Borrower. This
        Guaranty shall continue to be effective or be reinstated (as the case may
        be) if
        at any time payment of all or any part of any sum payable pursuant to the
        Note,
        Loan Agreement, Mortgage or
        any
        other Loan Document is rescinded or otherwise required to be returned by
        Lender
        upon the insolvency, bankruptcy, dissolution, liquidation, or reorganization
        of
        Borrower, or upon or as a result of the appointment of a receiver, intervenor,
        custodian or conservator of or trustee or similar officer for, Borrower or
        any
        substantial part of its property, or otherwise, all as though such payment
        to
        Lender had not been made, regardless of whether Lender contested the order
        requiring the return of such payment. In the event of the foreclosure of
        the
        Mortgage and
        of a
        deficiency, Guarantors hereby promise and agree forthwith to pay the amount
        of
        such deficiency notwithstanding the fact that recovery of said deficiency
        against Borrower would not be allowed by applicable law; however, the foregoing
        shall not be deemed to require that Lender institute foreclosure proceedings
        or
        otherwise resort to or exhaust any other collateral or security prior to
        or
        concurrently with enforcing this Guaranty.

      
        
          
          

        

        
          -
            4 -

          
            

          

        

        
          
          

        

      

      6.    In
        the
        event Lender or any holder of the Note shall assign the Note in whole or
        part to
        any lender or other entity in accordance with the Loan Agreement, Guarantors
        will accord full recognition thereto and agree that all rights and remedies
        of
        Lender or such holder hereunder shall be enforceable against Guarantors by
        such
        lender or other entity with the same force and effect and to the same extent
        as
        would have been enforceable by Lender or such holder but for such
        assignment.

      

      7.    If:
        (a) this Guaranty is placed in the hands of an attorney for collection or
        is collected through any legal proceeding; (b) an attorney is retained to
        represent Lender in any bankruptcy, reorganization, receivership, or other
        proceedings affecting creditors' rights and involving a claim under this
        Guaranty; (c) an attorney is retained to provide advice or other
        representation with respect to this Guaranty; or (d) an attorney is
        retained to represent Lender in any proceedings whatsoever in connection
        with
        this Guaranty and Lender prevails in any such proceedings, then Guarantors
        shall
        pay to Lender upon demand all attorney's fees, costs and expenses incurred
        in
        connection therewith (all of which are referred to herein as "Enforcement
        Costs"),
        in
        addition to all other amounts due hereunder, regardless of whether all or
        a
        portion of such Enforcement Costs are incurred in a single proceeding brought
        to
        enforce this Guaranty as well as the other Loan Documents.

      

      8.    The
        parties hereto intend and believe that each provision in this Guaranty comports
        with all applicable local, state and federal laws and judicial decisions.
        However, if any provision or provisions, or if any portion of any provision
        or
        provisions, in this Guaranty is found by a court of law to be in violation
        of
        any applicable local, state or federal ordinance, statute, law, administrative
        or judicial decision, or public policy, and if such court should declare
        such
        portion, provision or provisions of this Guaranty to be illegal, invalid,
        unlawful, void or unenforceable as written, then it is the intent of all
        parties
        hereto that such portion, provision or provisions shall be given force to
        the
        fullest possible extent that they are legal, valid and enforceable, that
        the
        remainder of this Guaranty shall be construed as if such illegal, invalid,
        unlawful, void or unenforceable portion, provision or provisions were not
        contained therein, and that the rights, obligations and interest of Lender
        or
        the holder of the Note under the remainder of this Guaranty shall continue
        in
        full force and effect.

      

      9.    TO
        THE GREATEST EXTENT PERMITTED BY LAW, GUARANTORS HEREBY WAIVE ANY AND ALL
        RIGHTS
        TO REQUIRE MARSHALLING OF ASSETS BY LENDER. WITH RESPECT TO ANY SUIT, ACTION
        OR
        PROCEEDINGS RELATING TO THIS GUARANTY (EACH, A "PROCEEDING"), LENDER (BY
        ITS
        ACCEPTANCE HEREOF) AND GUARANTORS IRREVOCABLY (A) SUBMIT TO THE NON-EXCLUSIVE
        JURISDICTION OF THE STATE AND FEDERAL COURTS HAVING JURISDICTION IN THE CITY
        OF
        CHICAGO, COUNTY OF COOK AND STATE OF ILLINOIS, AND (B) WAIVE ANY OBJECTION
        WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT
        IN ANY SUCH COURT, WAIVE ANY CLAIM THAT ANY PROCEEDING HAS BEEN BROUGHT IN
        AN
        INCONVENIENT FORUM AND FURTHER WAIVE THE RIGHT TO OBJECT, WITH RESPECT TO
        SUCH
        PROCEEDING, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY. NOTHING
        IN THIS GUARANTY SHALL PRECLUDE LENDER FROM BRINGING A PROCEEDING IN ANY
        OTHER
        JURISDICTION NOR WILL THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE
        JURISDICTIONS PRECLUDE THE BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION.
        LENDER AND GUARANTORS FURTHER AGREE AND CONSENT THAT, IN ADDITION TO ANY
        METHODS
        OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS
        IN ANY PROCEEDING IN ANY ILLINOIS STATE OR UNITED STATES COURT SITTING IN
        THE
        CITY OF CHICAGO AND COUNTY OF COOK MAY BE MADE BY CERTIFIED OR REGISTERED
        MAIL,
        RETURN RECEIPT REQUESTED, DIRECTED TO THE APPLICABLE PARTY AT THE ADDRESS
        INDICATED BELOW, AND SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT;
EXCEPT
        THAT IF SUCH PARTY SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED
        COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO
        MAILED.

      
        
          
          

        

        
          -
            5 -

          
            

          

        

        
          
          

        

      

       

      10.    Any
        indebtedness of Borrower to Guarantors now or hereafter existing is hereby
        subordinated to the payment of the Indebtedness. Guarantors agree that, until
        the entire Indebtedness has been paid in full, Guarantors will not seek,
        accept,
        or retain for its own account, any payment from Borrower on account of such
        subordinated debt. Any payments to Guarantors on account of such subordinated
        debt shall be collected and received by Guarantors in trust for Lender and
        shall
        be paid over to Lender on account of the Indebtedness without impairing or
        releasing the obligations of Guarantors hereunder.

      

      11.    Any
        amounts received by Lender from any source on account of the Loan may be
        utilized by Lender for the payment of the Indebtedness and any other obligations
        of Borrower to Lender in such order as Lender may from time to time elect.
        Additionally, if the indebtedness guaranteed hereby is less than the full
        indebtedness evidenced by the Note, all rents, proceeds and avails of the
        Project, including proceeds of realization of Lender's collateral, shall
        be
        deemed applied on the indebtedness of Borrower to Lender that is not guaranteed
        by Guarantors until such unguaranteed indebtedness of Borrower to Lender
        has
        been fully repaid before being applied upon the indebtedness guaranteed by
        Guarantors.

      

      12.    GUARANTORS
        AND LENDER (BY ITS ACCEPTANCE HEREOF) EACH KNOWINGLY, VOLUNTARILY AND
        INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY CLAIM, CONTROVERSY,
        DISPUTE, ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS GUARANTY
        AND THE
        OTHER LOAN DOCUMENTS (INCLUDING WITHOUT LIMITATION ANY ACTIONS OR PROCEEDINGS
        FOR ENFORCEMENT OF THE LOAN DOCUMENTS) AND AGREE THAT ANY SUCH ACTION OR
        PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. GUARANTORS
        AND
        LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO
        A
        BUSINESS RELATIONSHIP, THAT EACH OF THEM HAS RELIED ON THIS WAIVER IN ENTERING
        INTO THIS GUARANTY AND THE OTHER LOAN DOCUMENTS AND THAT EACH OF THEM WILL
        CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. GUARANTORS
        AND
        LENDER EACH WARRANT AND REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING
        THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY
        WAIVES ITS JURY TRIAL RIGHTS.

      
        
          
          

        

        
          -
            6 -

          
            

          

        

        
          
          

        

      

      

      13.    Any
        notice, demand, request or other communication which any party hereto may
        be
        required or may desire to give hereunder shall be in writing and shall be
        deemed
        to have been properly given (a) if hand delivered, when delivered; (b) if
        mailed
        by United States Certified Mail (postage prepaid, return receipt requested),
        three (3) Business Days after mailing (c) if by any reliable overnight courier
        service, on the next Business Day after delivered to such courier service
        or (d)
        if by telecopier on the day of transmission, if before 3:00 p.m. (Chicago
        Time) on a Business Day so long as copy is sent on the same day by overnight
        courier as set forth below:

       

      
        	
                Guarantors:  
                  

              	
                Hersha
                  Hospitality Limited Partnership

              
	 	
                510
                  Walnut Street, 9th
                  Floor

              
	 	
                Philadelphia,
                  Pennsylvania 19106

              
	 	
                Attention:  
                  

              	
                Chief
                  Financial Officer

              
	 	
                Telephone: 
                  

              	
                215-238-1046

              
	 	Facsimile: 
                	215-238-0157
	 	 	 
	 	
                Mystic
                  Hotel Investors, LLC

              
	 	
                914
                  Hartford Turnpike

              
	 	
                P.O.
                  Box 715

              
	 	
                Waterford,
                  CT 06385

              
	 	
                Telephone:  
                  

              	
                860-442-4559

              
	 	
                Facsimile:  
                  

              	
                860-437-7752

              
	 	 	 
	
                Lender:  
                  

              	
                Merrill
                  Lynch Capital, a Division of

              
	 	
                Merrill
                  Lynch Business Financial Services Inc.

              
	 	
                222
                  N. LaSalle Street - 16th Floor

              
	 	
                Chicago,
                  IL 60601

              
	 	
                Attention:  
                  

              	
                National
                  Portfolio Manager - Real Estate

              
	 	
                Telephone:  
                  

              	
                312-499-3812

              
	 	
                Facsimile:  
                  

              	
                312-499-3026

              
	 	 	 
	
                With
                  a copy to:   

              	
                Merrill
                  Lynch Capital, a Division of

              
	 	
                Merrill
                  Lynch Business Financial Services Inc.

              
	 	
                222
                  N. LaSalle Street - 16th Floor

              
	 	
                Chicago,
                  IL 60601

              
	 	
                Attention:  
                  

              	
                Real
                  Estate Legal

              
	 	
                Telephone:  
                  

              	
                312-499-3140
                  

              
	 	
                Facsimile:  
                  

              	
                312-499-3026

              

      

       

      
        
          
          

        

        
          -
            7 -

          
            

          

        

        
          
          

        

      

      
        

        
          	
                  With
                    a copy to:   

                	
                  Goldberg,
                    Kohn, Bell, Black,

                
	 	
                  Rosenbloom
                    & Moritz, Ltd.

                
	 	
                  55
                    East Monroe Street, Suite 3700

                
	 	
                  Chicago,
                    IL 60603

                
	 	
                  Attention:
                    James B. Rosenbloom, Esq.

                
	 	
                  Telephone:  
                    

                	
                  312-201-3925

                
	 	
                  Facsimile:  
                    

                	
                  312-332-2196

                

        

         

      

      or
        at
        such other address as the party to be served with notice may have furnished
        in
        writing to the party seeking or desiring to serve notice as a place for the
        service of notice. Any notice or demand delivered to the person or entity
        named
        above to accept notices and demands for such party shall constitute notice
        or
        demand duly delivered to such party, even if delivery is refused.

      

      14.    To
        induce
        Lender to make the Loan, Guarantors make the following representations and
        warranties to Lender set forth in this Section. Guarantors acknowledge that
        but
        for the truth and accuracy of the matters covered by the following
        representations and warranties, Lender would not have agreed to make the
        Loan.

      

      (a)    Guarantors
        are duly formed, validly existing, and in good standing in its state of
        organization and has qualified to do business and is in good standing in
        any
        state in which it is necessary in the conduct of its business.

      

      (b)    Guarantors
        maintain an office at the address set forth for such party in Section 13.

      

      (c)    Any
        and
        all balance sheets, net worth statements, and other financial data with respect
        to Guarantors which have heretofore been given to Lender by or on behalf
        of
        Guarantors fairly and accurately present the financial condition of Guarantors
        as of the respective dates thereof.

      

      (d)    The
        execution, delivery, and performance by Guarantors of this Guaranty does
        not and
        will not violate (i) any Laws, order, rule, regulation, writ, injunction or
        decree now in effect of any Government Authority, or court having jurisdiction
        over Guarantors, (ii) any contractual restriction binding on or affecting
        Guarantors or Guarantors' property or assets which may adversely affect
        Guarantors' ability to fulfill its obligations under this Guaranty, (iii)
        the
        instruments creating any trust holding title to any assets included in
        Guarantors' financial statements, or (iv) the organizational or other documents
        of Guarantors.

      

      (e)    To
        the
        Guarantors' knowledge, this Guaranty creates legal, valid, and binding
        obligations of Guarantors enforceable in accordance with its terms subject
        to
        bankruptcy and general equity principles.

      

        
          
            
            

          

          
            -
              8 -

            
              

            

          

          
            
            

          

        

      

       

      (f)    Except
        as
        disclosed in writing to Lender, there is no action, proceeding, or investigation
        pending or, to the knowledge of Guarantors, threatened or affecting Guarantors,
        which may adversely affect Guarantors' ability to fulfill its obligations
        under
        this Guaranty. There are no judgments or orders for the payment of money
        rendered against Guarantors for an amount in excess of $100,000.00 that have
        been undischarged for a period of ten (10) or more consecutive days and the
        enforcement of which is not stayed by reason of a pending appeal or otherwise.
        Guarantors are not in default under any agreements which may materially and
        adversely affect Guarantors' ability to fulfill its obligations under this
        Guaranty.

      

      (g)    All
        statements set forth in the Recitals are true and correct.

      

      All
        of
        the foregoing representations and warranties shall be deemed remade on the
        date
        of the first disbursement of Loan proceeds, on the date of each advance of
        Loan
        proceeds, and upon any extension of the Loan pursuant to the Loan Agreement.
        Guarantors hereby agree to indemnify, defend and hold Lender free and harmless
        from and against all loss, cost, liability, damage, and expense, including
        attorney's fees and costs, which Lender may sustain by reason of the inaccuracy
        or breach of any of the foregoing representations and warranties as of the
        date
        the foregoing representations and warranties are made and are
        remade.

      

      15.    Guarantors
        shall deliver or cause to be delivered to Lender all of the Guarantors'
        financial statements to be delivered in accordance with the terms of the
        Loan
        Agreement.

      

      16.    This
        Guaranty shall be binding upon the heirs, executors, legal and personal
        representatives, successors and assigns of Guarantors. If more than one party
        executes this Guaranty, the liability of all such parties shall be joint
        and
        several.

      

      17.    THIS
        GUARANTY, THE NOTE, AND ALL OTHER INSTRUMENTS EVIDENCING AND SECURING THE
        LOAN
        SECURED HEREBY WERE NEGOTIATED IN THE STATE OF ILLINOIS, AND DELIVERED BY
        GUARANTORS OR BORROWER, AS APPLICABLE, AND ACCEPTED BY LENDER IN THE STATE
        OF
        ILLINOIS, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO
        THE
        PARTIES AND THE UNDERLYING TRANSACTIONS EMBODIED HEREBY. IN ALL RESPECTS,
        INCLUDING, WITHOUT LIMITATION, MATTERS OF CONSTRUCTION OF THE IMPROVEMENTS
        AND
        PERFORMANCE OF THIS GUARANTY AND THE OBLIGATIONS ARISING HEREUNDER, THIS
        GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
        LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
        IN SUCH STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
        AMERICA.

       

      
        
          
          

        

        
          -
            9 -

          
            

          

        

        
          
          

        

      

      18.    Lender
        shall be entitled to honor any request for Loan proceeds made by Borrower
        and
        shall have no obligation to see to the proper disposition of such advances.
        Guarantors agree that its obligations hereunder shall not be released or
        affected by reason of any improper disposition by Borrower of such Loan
        proceeds.

      

      19.    This
        Guaranty may be executed in any number of counterparts and by different parties
        hereto in separate counterparts, each of which when so executed shall be
        deemed
        to be an original and all of which taken together shall constitute one and
        the
        same instrument.

       

      
        
          
          

        

        
          -
            10 -

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, Guarantors have delivered this Guaranty in the State of
        Illinois as of the date first written above.

      

      
        	
                GUARANTORS:

              
	 
	
                HERSHA
                  HOSPITALITY LIMITED PARTNERSHIP,
                  a
                  Virginia limited partnership

              
	 	 
	 	 
	
                By:

              	 
	
                Name:

              	 
	
                Its:

              	 
	 	 
	 	 
	
                MYSTIC
                  HOTEL INVESTORS, LLC,
                  a
                  Delaware limited liability company

              
	 	 
	
                By:

              	 
	
                Name:

              	 
	
                Its:Exhibit 10.9

    
      

    

    Exhibit
      10.9

    

    CONDITIONAL
      PAYMENT GUARANTY

    

    THIS
      CONDITIONAL PAYMENT GUARANTY ("Guaranty")
      made
      as of February 8, 2006, by HERSHA HOSPITALITY LIMITED PARTNERSHIP, a
      Virginia limited partnership and MYSTIC HOTEL INVESTORS, LLC, a Delaware limited
      liability company (collectively, "Guarantors"),
      to
      and for the benefit of MERRILL LYNCH CAPITAL, a Division of Merrill Lynch
      Business Financial Services Inc., a Delaware corporation, its successors and
      assigns ("Lender").

    

    R
      E C I T A L S

    

    A.   On
      or
      about the September 30, 2005, 315 Trumbull Street Associates, LLC, a
      Connecticut limited liability company ("Borrower")
      and
      Lender entered into that certain Loan Agreement ("Loan
      Agreement")
      whereby Lender agreed to make a first mortgage loan (the "Loan")
      available to Borrower in the maximum aggregate amount up to Twenty-Seven Million
      and No/100ths Dollars ($27,000,000.00), for, among other things, the refinance
      of the Hartford Hilton Hotel located in Hartford, Connecticut (the "Project").
      Capitalized terms used and not otherwise defined herein shall have the meanings
      given to them in the Loan Agreement.

    

    B.   In
      connection with the Loan, Borrower executed and delivered a certain Promissory
      Note (the "Note")
      in
      favor of Lender of even date herewith in the maximum principal amount of the
      Loan, payment of which is secured by (i) a certain Open-End Mortgage Deed,
      Assignment of Leases and Rents, Security Agreement and Fixture Filing of even
      date herewith made by Borrower in favor of Lender (the "Mortgage")
      against the Project, and (ii) the other Loan Documents.

    

    C.   In
      connection with the Loan, Mystic Partners, LLC, a Delaware limited liability
      company ("Mystic")
      executed that certain Conditional Payment Guaranty dated September 30,
      2005, in favor of Lender (the "Hilton
      Guaranty"),
      pursuant to which Mystic conditionally guaranteed the repayment of the
      Loan.

    

    D.   Concurrently
      herewith, Lender and Mystic have entered into a certain Amended and Restated
      Payment Guaranty (the "Amended
      and Restated Hilton Guaranty"),
      pursuant to which the Hilton Guaranty has been amended and restated in its
      entirety.

    

    E.   Concurrently
      herewith, Lender and Adriaen's Landing Hotel, LLC ("Marriott
      Borrower"),
      an
      affiliate of Borrower, have entered into a certain Loan Agreement pursuant
      to
      which Lender has agreed to make a Loan (the "Marriott Loan") available to
      Marriott Borrower in the maximum aggregate amount of up to Fifty Million and
      No/100ths Dollars ($50,000,000.00).

    

    F.   Guarantors
      collectively own one hundred percent (100%) of the membership interests in
      Mystic.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    G.   Mystic
      owns not less than eighty-five percent (85%) of the ownership interests in
      Borrower and Marriott Borrower.

    

    H.   Guarantors
      will derive material financial benefit from the Loan and the Marriott
      Loan.

    

    I.    
Lender
      has relied on the statements and agreements contained herein in agreeing to
      enter into the Amended and Restated Hilton Guaranty and make the Marriott Loan.
      The execution and delivery of this Guaranty by Guarantors is a condition
      precedent to the execution of the Amended and Restated Hilton Guaranty by Lender
      and the making of the Marriott Loan.

    

    AGREEMENTS

    

    NOW,
      THEREFORE, intending to be legally bound, Guarantors, in consideration of the
      matters described in the foregoing Recitals, which Recitals are incorporated
      herein and made a part hereof, and for other good and valuable consideration
      the
      receipt and sufficiency of which are acknowledged, hereby covenants and agrees
      for the benefit of Lender and its successors, indorsees, transferees,
      participants and assigns as follows:

    

    1.    
Guarantors
      absolutely, unconditionally and irrevocably guarantee:

    

      (a)    the
        full
        and prompt payment of the principal of and interest on the Note when due,
        whether at stated maturity, upon acceleration or otherwise, and at all times
        thereafter, and the full and prompt payment of all sums which may now be
        or may
        hereafter become due and owing under the Note, the Loan Agreement and the
        other
        Loan Documents;

      

      (b)    the
        prompt, full and complete performance of all of Borrower's obligations under
        each and every covenant contained in the Loan Documents; and

      

      (c)    the
        full
        and prompt payment of any Enforcement Costs (as hereinafter defined in
Section
        7
        hereof);

    

     

    All
      amounts due, debts, liabilities and payment obligations described in subsections
      (a) and (b) of this Section 1
      shall be
      hereinafter collectively referred to as the "Indebtedness."
      Notwithstanding any provisions hereof to the contrary, the obligations and
      liabilities of Guarantors under this Guaranty are contingent upon the occurrence
      and continuation of a Condition Subsequent and, therefore, this Guaranty will
      only be effective and enforceable if a Condition Subsequent occurs. For purposes
      hereof, "Condition
      Subsequent"
      means
      if at any time and for any and all periods during which the net worth of Mystic
      Partners, LLC (calculated based on the undepreciated historical costs of the
      assets of Mystic Partners, LLC, as set forth on Schedule II to the Loan
      Agreement) is less than Fifty Million and No/100ths Dollars ($50,000,000.00).
      Notwithstanding anything contained in this Guaranty to the contrary, if
      (i) a Condition Subsequent occurs or is in existence at any time on or
      after the date on which Lender has accelerated the Loan in accordance with
      the
      Loan Agreement or (ii) Lender has commenced enforcement of this Guaranty,
      Lender shall at all times thereafter be entitled to enforce all of its rights
      and remedies hereunder.

    
      
        
        

      

      
        -
          2 -

        
          

        

      

      
        
        

      

    

     

    2.   In
      the
      event of any default by Borrower in the payment of the Indebtedness, after
      the
      expiration of any applicable cure or grace period, Guarantors agree, on demand
      by Lender or any holder of the Note (which demand may be made concurrently
      with
      notice to Borrower that Borrower is in default of its obligations), to pay
      the
      Indebtedness regardless of any defense, right of set-off or claims which
      Borrower or Guarantors may have against Lender or the holder of the
      Note.

    
          All
      of the remedies set forth
      herein and/or provided for in any of the other Loan Documents or at law or
      equity shall be equally available to Lender, and the choice by Lender of one
      such alternative over another shall not be subject to question or challenge
      by
      Guarantors or any other person, nor shall any such choice be asserted as a
      defense, setoff, or failure to mitigate damages in any action, proceeding,
      or
      counteraction by Lender to recover or seeking any other remedy under this
      Guaranty, nor shall such choice preclude Lender from subsequently electing
      to
      exercise a different remedy. The parties have agreed to the alternative remedies
      provided herein in part because they recognize that the choice of remedies
      in
      the event of a default hereunder will necessarily be and should properly be
      a
      matter of good faith business judgment, which the passage of time and events
      may
      or may not prove to have been the best choice to maximize recovery by Lender
      at
      the lowest cost to Borrower and/or Guarantor. It is the intention of the parties
      that such good faith choice by Lender be given conclusive effect regardless
      of
      such subsequent developments.

    

    3.   Guarantors
      do hereby (a) waive notice of acceptance of this Guaranty by Lender and any
      and all notices and demands of every kind which may be required to be given
      by
      any statute, rule or law, (b) agree to refrain from asserting, until after
      repayment in full of the Loan, any defense, right of set-off or other claim
      which Guarantors may have against Borrower, (c) waive any defense, right of
      set-off or other claim which Guarantors or Borrower may have against Lender
      or
      the holder of the Note, (d) waive any and all rights Guarantors may have under
      any anti-deficiency statute or other similar protections, (e) waive all
      rights at law or in equity to seek subrogation, contribution, indemnification
      or
      any other form of reimbursement or repayment from Borrower or any other person
      or entity now or hereafter primarily or secondarily liable for any of the
      Indebtedness until the Indebtedness has been satisfied in full, (f) waive
      presentment for payment, demand for payment, notice of nonpayment or dishonor,
      protest and notice of protest, diligence in collection and any and all
      formalities which otherwise might be legally required to charge Guarantors
      with
      liability, and (f) waive any failure by Lender to inform Guarantors of any
      facts Lender may now or hereafter know about Borrower, the Project, the Loan,
      or
      the transactions contemplated by the Loan Agreement, it being understood and
      agreed that Lender has no duty so to inform and that Guarantors are fully
      responsible for being and remaining informed by Borrower of all circumstances
      bearing on the risk of nonperformance of Borrower's obligations. Credit may
      be
      granted or continued from time to time by Lender to Borrower without notice
      to
      or authorization from Guarantors, regardless of the financial or other condition
      of Borrower at the time of any such grant or continuation. Lender shall have
      no
      obligation to disclose or discuss with Guarantors its assessment of the
      financial condition of Borrower. Guarantors acknowledge that no representations
      of any kind whatsoever have been made by Lender. No modification or waiver
      of
      any of the provisions of this Guaranty shall be binding upon Lender except
      as
      expressly set forth in a writing duly signed and delivered by
      Lender.

    
      
        
        

      

      
        -
          3 -

        
          

        

      

      
        
        

      

    

    

    4.   Guarantors
      further agree that Guarantors' liability as guarantors shall not be impaired
      or
      affected by any renewals or extensions which may be made from time to time,
      with
      or without the knowledge or consent of Guarantors of the time for payment of
      interest or principal under the Note or by any forbearance or delay in
      collecting interest or principal under the Note, or by any waiver by Lender
      under the Loan Agreement, Mortgage or
      any
      other Loan Documents, or by Lender's failure or election not to pursue any
      other
      remedies it may have against Borrower or Guarantors, or by any change or
      modification in the Note, Loan Agreement, Mortgage or any other Loan Document,
      or by the acceptance by Lender of any additional security or any increase,
      substitution or change therein, or by the release by Lender of any security
      or
      any withdrawal thereof or decrease therein, or by the application of payments
      received from any source to the payment of any obligation other than the
      Indebtedness even though Lender might lawfully have elected to apply such
      payments to any part or all of the Indebtedness, it being the intent hereof
      that, subject to Lender's compliance with the terms of this Guaranty, Guarantors
      shall remain liable for the payment of the Indebtedness, until the Indebtedness
      has been paid in full, notwithstanding any act or thing which might otherwise
      operate as a legal or equitable discharge of a surety. Guarantors further
      understand and agree that Lender may at any time enter into agreements with
      Borrower to amend and modify the Note, Loan Agreement, Mortgage or
      other
      Loan Documents, and may waive or release any provision or provisions of the
      Note, Loan Agreement, Mortgage and
      other
      Loan Documents or any thereof, and, with reference to such instruments, may
      make
      and enter into any such agreement or agreements as Lender and Borrower may
      deem
      proper and desirable, without in any manner impairing or affecting this Guaranty
      or any of Lender's rights hereunder or Guarantors' obligations
      hereunder.

    

    5.   This
      is
      an absolute, present and continuing guaranty of payment and not of collection.
      Guarantors agree that this Guaranty may be enforced by Lender without the
      necessity at any time of resorting to or exhausting any other security or
      collateral given in connection herewith or with the Note, Loan Agreement,
      Mortgage or
      any of
      the other Loan Documents through foreclosure or sale proceedings, as the case
      may be, under the Mortgage or
      otherwise, or resorting to any other guaranties, and Guarantors hereby waive
      any
      right to require Lender to join Borrower in any action brought hereunder or
      to
      commence any action against or obtain any judgment against Borrower or to pursue
      any other remedy or enforce any other right. Guarantors further agree that
      nothing contained herein or otherwise shall prevent Lender from pursuing
      concurrently or successively all rights and remedies available to it at law
      and/or in equity or under the Note, Loan Agreement, Mortgage or
      any
      other Loan Documents, and the exercise of any of its rights or the completion
      of
      any of its remedies shall not constitute a discharge of Guarantors' obligations
      hereunder, it being the purpose and intent of Guarantors that the obligations
      of
      Guarantors hereunder shall be absolute, independent and unconditional under
      any
      and all circumstances whatsoever. None of Guarantors' obligations under this
      Guaranty or any remedy for the enforcement thereof shall be impaired, modified,
      changed or released in any manner whatsoever by any impairment, modification,
      change, release or limitation of the liability of Borrower under the Note,
      Loan
      Agreement, Mortgage or
      other
      Loan Documents or by reason of the bankruptcy of Borrower or by reason of any
      creditor or bankruptcy proceeding instituted by or against Borrower. This
      Guaranty shall continue to be effective or be reinstated (as the case may be)
      if
      at any time payment of all or any part of any sum payable pursuant to the Note,
      Loan Agreement, Mortgage or
      any
      other Loan Document is rescinded or otherwise required to be returned by Lender
      upon the insolvency, bankruptcy, dissolution, liquidation, or reorganization
      of
      Borrower, or upon or as a result of the appointment of a receiver, intervenor,
      custodian or conservator of or trustee or similar officer for, Borrower or
      any
      substantial part of its property, or otherwise, all as though such payment
      to
      Lender had not been made, regardless of whether Lender contested the order
      requiring the return of such payment. In the event of the foreclosure of the
      Mortgage and
      of a
      deficiency, Guarantors hereby promise and agree forthwith to pay the amount
      of
      such deficiency notwithstanding the fact that recovery of said deficiency
      against Borrower would not be allowed by applicable law; however, the foregoing
      shall not be deemed to require that Lender institute foreclosure proceedings
      or
      otherwise resort to or exhaust any other collateral or security prior to or
      concurrently with enforcing this Guaranty.

    
      
        
        

      

      
        -
          4 -

        
          

        

      

      
        
        

      

    

     

    6.   In
      the
      event Lender or any holder of the Note shall assign the Note in whole or part
      to
      any lender or other entity in accordance with the Loan Agreement, Guarantors
      will accord full recognition thereto and agree that all rights and remedies
      of
      Lender or such holder hereunder shall be enforceable against Guarantors by
      such
      lender or other entity with the same force and effect and to the same extent
      as
      would have been enforceable by Lender or such holder but for such
      assignment.

    

    7.   If:
      (a) this Guaranty is placed in the hands of an attorney for collection or
      is collected through any legal proceeding; (b) an attorney is retained to
      represent Lender in any bankruptcy, reorganization, receivership, or other
      proceedings affecting creditors' rights and involving a claim under this
      Guaranty; (c) an attorney is retained to provide advice or other
      representation with respect to this Guaranty; or (d) an attorney is
      retained to represent Lender in any proceedings whatsoever in connection with
      this Guaranty and Lender prevails in any such proceedings, then Guarantors
      shall
      pay to Lender upon demand all attorney's fees, costs and expenses incurred
      in
      connection therewith (all of which are referred to herein as "Enforcement
      Costs"),
      in
      addition to all other amounts due hereunder, regardless of whether all or a
      portion of such Enforcement Costs are incurred in a single proceeding brought
      to
      enforce this Guaranty as well as the other Loan Documents.

    

    8.   The
      parties hereto intend and believe that each provision in this Guaranty comports
      with all applicable local, state and federal laws and judicial decisions.
      However, if any provision or provisions, or if any portion of any provision
      or
      provisions, in this Guaranty is found by a court of law to be in violation
      of
      any applicable local, state or federal ordinance, statute, law, administrative
      or judicial decision, or public policy, and if such court should declare such
      portion, provision or provisions of this Guaranty to be illegal, invalid,
      unlawful, void or unenforceable as written, then it is the intent of all parties
      hereto that such portion, provision or provisions shall be given force to the
      fullest possible extent that they are legal, valid and enforceable, that the
      remainder of this Guaranty shall be construed as if such illegal, invalid,
      unlawful, void or unenforceable portion, provision or provisions were not
      contained therein, and that the rights, obligations and interest of Lender
      or
      the holder of the Note under the remainder of this Guaranty shall continue
      in
      full force and effect.

    
      
        
        

      

      
        -
          5 -

        
          

        

      

      
        
        

      

    

     

    9.   TO
      THE GREATEST EXTENT PERMITTED BY LAW, GUARANTORS HEREBY WAIVE ANY AND ALL RIGHTS
      TO REQUIRE MARSHALLING OF ASSETS BY LENDER. WITH RESPECT TO ANY SUIT, ACTION
      OR
      PROCEEDINGS RELATING TO THIS GUARANTY (EACH, A "PROCEEDING"), LENDER (BY ITS
      ACCEPTANCE HEREOF) AND GUARANTORS IRREVOCABLY (A) SUBMIT TO THE NON-EXCLUSIVE
      JURISDICTION OF THE STATE AND FEDERAL COURTS HAVING JURISDICTION IN THE CITY
      OF
      CHICAGO, COUNTY OF COOK AND STATE OF ILLINOIS, AND (B) WAIVE ANY OBJECTION
      WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT
      IN ANY SUCH COURT, WAIVE ANY CLAIM THAT ANY PROCEEDING HAS BEEN BROUGHT IN
      AN
      INCONVENIENT FORUM AND FURTHER WAIVE THE RIGHT TO OBJECT, WITH RESPECT TO SUCH
      PROCEEDING, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY. NOTHING
      IN THIS GUARANTY SHALL PRECLUDE LENDER FROM BRINGING A PROCEEDING IN ANY OTHER
      JURISDICTION NOR WILL THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE
      JURISDICTIONS PRECLUDE THE BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION.
      LENDER AND GUARANTORS FURTHER AGREE AND CONSENT THAT, IN ADDITION TO ANY METHODS
      OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS
      IN ANY PROCEEDING IN ANY ILLINOIS STATE OR UNITED STATES COURT SITTING IN THE
      CITY OF CHICAGO AND COUNTY OF COOK MAY BE MADE BY CERTIFIED OR REGISTERED MAIL,
      RETURN RECEIPT REQUESTED, DIRECTED TO THE APPLICABLE PARTY AT THE ADDRESS
      INDICATED BELOW, AND SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT;
EXCEPT
      THAT IF SUCH PARTY SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED
      COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO
      MAILED.

    

    10.   Any
      indebtedness of Borrower to Guarantors now or hereafter existing is hereby
      subordinated to the payment of the Indebtedness. Guarantors agree that, until
      the entire Indebtedness has been paid in full, Guarantors will not seek, accept,
      or retain for its own account, any payment from Borrower on account of such
      subordinated debt. Any payments to Guarantors on account of such subordinated
      debt shall be collected and received by Guarantors in trust for Lender and
      shall
      be paid over to Lender on account of the Indebtedness without impairing or
      releasing the obligations of Guarantors hereunder.

    
      
        
        

      

      
        -
          6 -

        
          

        

      

      
        
        

      

    

     

    11.   Any
      amounts received by Lender from any source on account of the Loan may be
      utilized by Lender for the payment of the Indebtedness and any other obligations
      of Borrower to Lender in such order as Lender may from time to time elect.
      Additionally, if the indebtedness guaranteed hereby is less than the full
      indebtedness evidenced by the Note, all rents, proceeds and avails of the
      Project, including proceeds of realization of Lender's collateral, shall be
      deemed applied on the indebtedness of Borrower to Lender that is not guaranteed
      by Guarantors until such unguaranteed indebtedness of Borrower to Lender has
      been fully repaid before being applied upon the indebtedness guaranteed by
      Guarantors.

    

    12.   GUARANTORS
      AND LENDER (BY ITS ACCEPTANCE HEREOF) EACH KNOWINGLY, VOLUNTARILY AND
      INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY CLAIM, CONTROVERSY,
      DISPUTE, ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS GUARANTY AND
      THE
      OTHER LOAN DOCUMENTS (INCLUDING WITHOUT LIMITATION ANY ACTIONS OR PROCEEDINGS
      FOR ENFORCEMENT OF THE LOAN DOCUMENTS) AND AGREE THAT ANY SUCH ACTION OR
      PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. GUARANTORS
      AND
      LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO
      A
      BUSINESS RELATIONSHIP, THAT EACH OF THEM HAS RELIED ON THIS WAIVER IN ENTERING
      INTO THIS GUARANTY AND THE OTHER LOAN DOCUMENTS AND THAT EACH OF THEM WILL
      CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. GUARANTORS
      AND
      LENDER EACH WARRANT AND REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING
      THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY
      WAIVES ITS JURY TRIAL RIGHTS.

    

    13.   Any
      notice, demand, request or other communication which any party hereto may be
      required or may desire to give hereunder shall be in writing and shall be deemed
      to have been properly given (a) if hand delivered, when delivered; (b) if mailed
      by United States Certified Mail (postage prepaid, return receipt requested),
      three (3) Business Days after mailing (c) if by any reliable overnight courier
      service, on the next Business Day after delivered to such courier service or
      (d)
      if by telecopier on the day of transmission, if before 3:00 p.m. (Chicago
      Time) on a Business Day so long as copy is sent on the same day by overnight
      courier as set forth below:

     

    
      	
              Guarantors:  
                

            	
              Hersha
                Hospitality Limited Partnership

            
	 	
              510
                Walnut Street, 9th
                Floor

            
	 	
              Philadelphia,
                Pennsylvania 19106

            
	 	
              Attention: 
                

            	
              Chief
                Financial Officer

            
	 	
              Telephone: 
                

            	
              215-238-1046
                

            
	 	
              Facsimile: 
                

            	
              215-238-0157

            
	 	 	 
	 	
              Mystic
                Hotel Investors, LLC

            
	 	
              914
                Hartford Turnpike

            
	 	
              P.O.
                Box 715

            
	 	
              Waterford,
                CT 06385

            
	 	
              Telephone: 
                

            	
              860-442-4559

            
	 	
              Facsimile: 
                

            	
              860-437-7752

            

    

     

    
      
        
        

      

      
        -
          7 -

        
          

        

      

      
        
        

      

    

    
       

      
        	
                Lender:  
                  

              	
                Merrill
                  Lynch Capital, a Division of

              
	 	
                Merrill
                  Lynch Business Financial Services Inc.

              
	 	
                222
                  N. LaSalle Street - 16th Floor

              
	 	
                Chicago,
                  IL 60601

              
	 	
                Attention: 
                  

              	
                National
                  Portfolio Manager - Real Estate

              
	 	
                Telephone: 
                  

              	
                312-499-3812

              
	 	
                Facsimile:  
                  

              	
                312-499-3026

              
	 	 	 
	
                With
                  a copy to:   

              	
                Merrill
                  Lynch Capital, a Division of

              
	 	
                Merrill
                  Lynch Business Financial Services Inc.

              
	 	
                222
                  N. LaSalle Street - 16th Floor

              
	 	
                Chicago,
                  IL 60601

              
	 	
                Attention: 
                  

              	
                Real
                  Estate Legal

              
	 	
                Telephone: 
                  

              	
                312-499-3140
                  

              
	 	
                Facsimile: 
                  

              	
                312-499-3026

              
	 	 	 
	
                With
                  a copy to:   

              	
                Goldberg,
                  Kohn, Bell, Black,

              
	 	
                Rosenbloom
                  & Moritz, Ltd.

              
	 	
                55
                  East Monroe Street, Suite 3700

              
	 	
                Chicago,
                  IL 60603

              
	 	
                Attention:
                  James B. Rosenbloom, Esq.

              
	 	
                Telephone: 
                  

              	
                312-201-3925

              
	 	
                Facsimile: 
                  

              	
                312-332-2196

              

      

      

    

    or
      at
      such other address as the party to be served with notice may have furnished
      in
      writing to the party seeking or desiring to serve notice as a place for the
      service of notice. Any notice or demand delivered to the person or entity named
      above to accept notices and demands for such party shall constitute notice
      or
      demand duly delivered to such party, even if delivery is refused.

    

    14.   To
      induce
      Lender to make the Loan, Guarantors make the following representations and
      warranties to Lender set forth in this Section. Guarantors acknowledge that
      but
      for the truth and accuracy of the matters covered by the following
      representations and warranties, Lender would not have agreed to make the
      Loan.

     

    
      (a)    Guarantors
        are duly formed, validly existing, and in good standing in its state of
        organization and has qualified to do business and is in good standing in
        any
        state in which it is necessary in the conduct of its business.

      

      (b)    Guarantors
        maintain an office at the address set forth for such party in Section 13.

      

      (c)    Any
        and
        all balance sheets, net worth statements, and other financial data with respect
        to Guarantors which have heretofore been given to Lender by or on behalf
        of
        Guarantors fairly and accurately present the financial condition of Guarantors
        as of the respective dates thereof.

    

     

    
      
        
        

      

      
        -
          8 -

        
          

        

      

      
        
        

      

    

    (d)    The
      execution, delivery, and performance by Guarantors of this Guaranty does not
      and
      will not violate (i) any Laws, order, rule, regulation, writ, injunction or
      decree now in effect of any Government Authority, or court having jurisdiction
      over Guarantors, (ii) any contractual restriction binding on or affecting
      Guarantors or Guarantors' property or assets which may adversely affect
      Guarantors' ability to fulfill its obligations under this Guaranty, (iii) the
      instruments creating any trust holding title to any assets included in
      Guarantors' financial statements, or (iv) the organizational or other documents
      of Guarantors.

    

    (e)    To
      the
      Guarantors' knowledge, this Guaranty creates legal, valid, and binding
      obligations of Guarantors enforceable in accordance with its terms subject
      to
      bankruptcy and general equity principles.

    

    (f)    
Except
      as
      disclosed in writing to Lender, there is no action, proceeding, or investigation
      pending or, to the knowledge of Guarantors, threatened or affecting Guarantors,
      which may adversely affect Guarantors' ability to fulfill its obligations under
      this Guaranty. There are no judgments or orders for the payment of money
      rendered against Guarantors for an amount in excess of $100,000.00 that have
      been undischarged for a period of ten (10) or more consecutive days and the
      enforcement of which is not stayed by reason of a pending appeal or otherwise.
      Guarantors are not in default under any agreements which may materially and
      adversely affect Guarantors' ability to fulfill its obligations under this
      Guaranty.

    

    (g)    All
      statements set forth in the Recitals are true and correct.

     

    All
      of
      the foregoing representations and warranties shall be deemed remade on the
      date
      of the first disbursement of Loan proceeds, on the date of each advance of
      Loan
      proceeds, and upon any extension of the Loan pursuant to the Loan Agreement.
      Guarantors hereby agree to indemnify, defend and hold Lender free and harmless
      from and against all loss, cost, liability, damage, and expense, including
      attorney's fees and costs, which Lender may sustain by reason of the inaccuracy
      or breach of any of the foregoing representations and warranties as of the
      date
      the foregoing representations and warranties are made and are
      remade.

    

    15.   Guarantors
      shall deliver or cause to be delivered to Lender all of the Guarantors'
      financial statements to be delivered in accordance with the terms of the Loan
      Agreement.

    

    16.   This
      Guaranty shall be binding upon the heirs, executors, legal and personal
      representatives, successors and assigns of Guarantors. If more than one party
      executes this Guaranty, the liability of all such parties shall be joint and
      several.

    
      
        
        

      

      
        -
          9 -

        
          

        

      

      
        
        

      

    

     

    17.   THIS
      GUARANTY, THE NOTE, AND ALL OTHER INSTRUMENTS EVIDENCING AND SECURING THE LOAN
      SECURED HEREBY WERE NEGOTIATED IN THE STATE OF ILLINOIS, AND DELIVERED BY
      GUARANTORS OR BORROWER, AS APPLICABLE, AND ACCEPTED BY LENDER IN THE STATE
      OF
      ILLINOIS, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
      PARTIES AND THE UNDERLYING TRANSACTIONS EMBODIED HEREBY. IN ALL RESPECTS,
      INCLUDING, WITHOUT LIMITATION, MATTERS OF CONSTRUCTION OF THE IMPROVEMENTS
      AND
      PERFORMANCE OF THIS GUARANTY AND THE OBLIGATIONS ARISING HEREUNDER, THIS
      GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
      LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
      IN SUCH STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
      AMERICA.

    

    18.   Lender
      shall be entitled to honor any request for Loan proceeds made by Borrower and
      shall have no obligation to see to the proper disposition of such advances.
      Guarantors agree that its obligations hereunder shall not be released or
      affected by reason of any improper disposition by Borrower of such Loan
      proceeds.

    

    19.   This
      Guaranty may be executed in any number of counterparts and by different parties
      hereto in separate counterparts, each of which when so executed shall be deemed
      to be an original and all of which taken together shall constitute one and
      the
      same instrument.

     

    
      
        
        

      

      
        -
          10 -

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, Guarantors have delivered this Guaranty in the State of
      Illinois as of the date first written above.

    

    
      	
              GUARANTORS:

            
	
              HERSHA
                HOSPITALITY LIMITED PARTNERSHIP,
                a
                Virginia limited partnership

            
	 	 
	 	 
	
              By:

            	 
	
              Name:

            	 
	
              Its:

            	 
	 	 
	 	 
	
              MYSTIC
                HOTEL INVESTORS, LLC,
                a
                Delaware limited liability company

            
	 	 
	 	 
	
              By:

            	 
	
              Name:

            	 
	
              Its:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}]]