Document:

ex10_1.htm

    
      

    

    
       

    

    CONTRIBUTION
      AGREEMENT

     

    dated
      as
      of July 1, 2007

     

    by
      and
      among

    

    

    HERSHA
      NORWICH ASSOCIATES, LLC,

    KIRIT
      PATEL,

    ASHWIN
      SHAH and

    K&D
      INVESTMENT ASSOCIATES, L.L.C.

    

    as
      Contributors,

    

    and

     

    HERSHA
      HOSPITALITY LIMITED PARTNERSHIP and

    44
      NORWICH MANAGER, LLC

    

     

    as
      Acquirers,

     

    

    
      IN
        CONNECTION WITH THE PURCHASE AND SALE OF

    

    
      MEMBERSHIP
        INTERESTS IN 44 HERSHA NORWICH ASSOCIATES, LLC, OWNER OF HOLIDAY INN NORWICH,
        LOCATED AT

      10
        LAURA
        BOULEVARD, NORWICH, CT

    

    
      
         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

    

    THIS
      CONTRIBUTION AGREEMENT, dated as of July 1, 2007 (the “Agreement”), by Hersha
      Norwich Associates, LLC, a Delaware limited liability company (the “Hersha
      Contributor”), Kirit Patel, an individual (the “Patel Contributor”), Ashwin
      Shah, an individual (the “Shah Contributor”), K&D Investment Associates,
      L.L.C., a Michigan limited liability company (the “K&D Contributor”,
      collectively, the “Contributors”), 44 Hersha Norwich Associates, LLC, a
      Connecticut limited liability company (the “LLC”), 44 Norwich Manager, LLC, a
      Delaware limited liability company (the “Manager Acquirer”) and Hersha
      Hospitality Limited Partnership, a Virginia limited partnership (the
“Partnership Acquirer”, collectively, the “Acquirers”), provides:

     

    ARTICLE
      I

     

    DEFINITIONS;
      RULES OF CONSTRUCTION

     

    1.1           Definitions.   The
      following terms shall have the indicated meanings:

     

    “Act
      of Bankruptcy” shall mean if a party hereto or any general partner thereof
      shall (a) apply for or consent to the appointment of, or the taking of
      possession by, a receiver, custodian, trustee or liquidator of itself or of
      all
      or a substantial part of its property, (b) admit in writing its inability
      to pay its debts as they become due, (c) make a general assignment for the
      benefit of its creditors, (d) file a voluntary petition or commence a
      voluntary case or proceeding under the Federal Bankruptcy Code (as now or
      hereafter in effect), (e) be adjudicated a bankrupt or insolvent,
      (f) file a petition seeking to take advantage of any other law relating to
      bankruptcy, insolvency, reorganization, winding-up or composition or adjustment
      of debts, (g) fail to controvert in a timely and appropriate manner, or
      acquiesce in writing to, any petition filed against it in an involuntary case
      or
      proceeding under the Federal Bankruptcy Code (as now or hereafter in effect),
      or
      (h) take any corporate or limited liability company action for the purpose
      of effecting any of the foregoing; or if a proceeding or case shall be
      commenced, without the application or consent of a party hereto or any general
      partner thereof, in any court of competent jurisdiction seeking (1) the
      liquidation, reorganization, dissolution or winding-up, or the composition
      or
      readjustment of debts, of such party or general partner, (2) the
      appointment of a receiver, custodian, trustee or liquidator or such party or
      general partner or all or any substantial part of its assets, or (3) other
      similar relief under any law relating to bankruptcy, insolvency, reorganization,
      winding-up or composition or adjustment of debts, and such proceeding or case
      shall continue undismissed; or an order (including an order for relief entered
      in an involuntary case under the Federal Bankruptcy Code, as now or hereafter
      in
      effect) judgment or decree approving or ordering any of the foregoing shall
      be
      entered and continue unstayed and in effect, for a period of 60 consecutive
      days.

     

    “Apportionment
      Date” shall mean the day immediately preceding the Closing
      Date.

     

    “Articles
      of Organization” shall mean the Articles of Organization of the LLC filed
      with the Secretary of State of the State of Connecticut, a true and correct
      copy
      of which is attached hereto as Exhibit F.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Assignment
      and Assumption Agreement” shall mean that certain Assignment and Assumption
      Agreement with respect to the Interests (defined herein below), dated as of
      the
      Closing Date, by and between Contributors and
      Acquirers.

     

    “Authorizations”
      shall mean all licenses, 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.

     

    “Closing”
      shall mean the Closing of the contribution and acquisition of the Interests
      pursuant to this Agreement.

     

    “Closing
      Date” shall mean the date on which the Closing occurs.

     

    “Consideration”
      shall mean the value of Sixteen Million Eighty Thousand Dollars ($16,080,000.00)
      less the principal amount of the first Existing Mortgage outstanding on the
      Closing Date, payable in limited partnership units of Partnership Acquirer
      payable to the Contributors at Closing in the manner described in Section
      2.3 and the assumption or modification by Partnership Acquirer of the
      existing loans from New Alliance Bank, a Connecticut banking corporation,
      successor by merger to Westbank, a Massachusetts banking corporation to the
      LLC,
      dated July 28, 2005 and amended September 26, 2006, in the total original
      principal amount of Eight Million Four Hundred Twenty-Three Thousand Dollars
      ($8,423,000.00).

     

    “Continuing
      Liabilities” shall include liabilities arising under Operating Agreements,
      Leases, equipment leases, loan agreements, or proration credits at Closing,
      but
      shall exclude any liabilities arising from any other arrangement, agreement
      or
      pending litigation.

     

    “Deposit”
      shall have the meaning set forth in Section 2.3.

    

    “Employment
      Agreements” shall mean any and all employment agreements, written or oral,
      between the Contributors or its managing agent and the persons employed with
      respect to the Property.  A schedule indicating all pertinent
      information with respect to each Employment Agreement in effect as of the date
      hereof, name of employee, social security number, wage or salary, accrued
      vacation benefits, other fringe benefits, etc., is attached hereto as
Exhibit B.

     

    “Escrow
      Agent” shall mean __________.

     

    “Existing
      Mortgage” shall mean the existing loans from New Alliance Bank, a
      Connecticut banking corporation, successor by merger to Westbank, a
      Massachusetts banking corporation to the LLC, dated July 28, 2005 and amended
      September 26, 2006, in the total original principal amount of Eight Million
      Four
      Hundred Twenty-Three Thousand Dollars ($8,423,000.00).

     

    “FIRPTA
      Certificate” shall mean the affidavit of the Contributors under Section 1445
      of the Internal Revenue Code certifying that such Contributors are not a foreign
      corporation, foreign partnership, foreign limited liability company, foreign
      trust, foreign estate or foreign person (as those terms are defined in the
      Internal Revenue Code and the Income Tax Regulations), in form and substance
      satisfactory to the Acquirer.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Governmental
      Body” means any federal, state, municipal or other governmental department,
      commission, board, bureau, agency or instrumentality, domestic or
      foreign.

     

    “Hersha”
      shall mean Hersha Hospitality Trust, a Maryland business trust.

     

    “Hotel”
      shall mean the hotel and related amenities located on the Land.

     

    “Improvements”
      shall mean the Hotel and all other buildings, improvements, fixtures and other
      items of real estate located on the Land.

     

    “Insurance
      Policies” shall mean those certain policies of insurance described on
Exhibit C attached hereto.

     

    “Intangible
      Personal Property” shall mean all intangible personal property owned or
      possessed by the Contributors or the LLC and used in connection with the
      ownership, operation, leasing, occupancy or maintenance of the Property,
      including, without limitation, the right to use the trade name “Holiday Inn
      Norwich” and all variations thereof, the Authorizations, escrow accounts,
      insurance policies, general intangibles, business records, plans and
      specifications, surveys and title insurance policies pertaining to the real
      property and the personal property, all licenses, permits and approvals with
      respect to the construction, ownership, operation, leasing, occupancy or
      maintenance of the Property, any unpaid award for taking by condemnation or
      any
      damage to the Land by reason of a change of grade or location of or access
      to
      any street or highway, and the share of the Tray Ledger as hereinafter defined,
      excluding (a) any of the aforesaid rights the Acquirer elects not to
      acquire, (b) the Contributor’s cash on hand, in bank accounts and invested
      with financial institutions and (c) accounts receivable except for the above
      described share of the Tray Ledger.

     

    “Hersha
      Interests” shall mean all right, title and interest of Hersha Contributor in
      the LLC, consisting of a 50% membership interest in the LLC.

     

    “Patel
      Interests” shall mean all right, title and interest of Patel Contributor in
      the LLC, consisting of a 20% membership interest in the LLC.

     

    “Shah
      Interests” shall mean all right, title and interest of Shah Contributor in
      the LLC, consisting of a 15% membership interest in the LLC.

     

    “K&D
      Interests” shall mean all right, title and interest of K&D Contributor
      in the LLC, consisting of a 15% membership interest in the LLC.

     

    “Interests”
      shall mean the Hersha Interests, the Patel Interests, the Shah Interests
and
      the
      K&D Interests.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Inventory”
      shall mean all inventory located at the Hotel, including without limitation,
      all
      mattresses, pillows, bed linens, towels, paper goods, soaps, cleaning supplies
      and other such supplies.

     

    “Joinder”
      shall have the meaning set forth in Section 2.3(c).

     

    "Knowledge"
      shall mean the actual knowledge of the Contributors that they would have had
      after making reasonable investigation.

     

    “LP
      Units” shall mean the value of _________ limited partnership units of
      Partnership Acquirer.

     

    “Land”
      shall mean that certain parcel of real estate lying and being in the Town of
      Norwich, County of New London and State of Connecticut at 10 Laura Boulevard,
      Norwich, Connecticut, as more particularly described on Exhibit A
      attached hereto, together with all easements, rights, privileges, remainders,
      reversions and appurtenances thereunto belonging or in any way appertaining,
      and
      all of the estate, right, title, interest, claim or demand whatsoever of the
      Contributor therein, in the streets and ways adjacent thereto and in the beds
      thereof, either at law or in equity, in possession or expectancy, now or
      hereafter acquired.

     

    “Leases”
      shall mean those leases of real property listed on Exhibit D attached
      hereto.

     

    “LLC”
      shall mean 44 Hersha Norwich Associates, LLC, a Connecticut limited liability
      company that owns, as its only assets, the fee interest in the Land, and the
      Hotel and Improvements located on the Land.

     

    “LLC
      Operating Agreement” shall mean the current operating agreement of the LLC,
      a true and correct copy of which is attached hereto as
Exhibit G.

     

    “Manager”
      shall mean Hersha Hospitality Management, LP, a Pennsylvania limited
      partnership.

     

    “Operating
      Agreements” shall mean the management agreements, service contracts, supply
      contracts, leases (other than the Leases) and other agreements, if any, in
      effect with respect to the construction, ownership, operation, occupancy or
      maintenance of the Property.  All of the Operating Agreements in force
      and effect as of the date hereof are listed on Exhibit E attached
      hereto.

     

    “Owner's
      Title Policy” shall mean an owner's policy of title insurance issued to the
      Acquirers by the Title Company, dated as of the Closing Date, pursuant to which
      the Title Company insures the Acquirers’ ownership of title to the fee interest
      in the Real Property (including the marketability thereof) subject only to
      Permitted Title Exceptions.  The Owner's Title
      Policy shall insure the Acquirers in the amount of the Consideration and shall
      be acceptable in form and substance to the Acquirers.  The description
      of the Land in the Owner's Title Policy shall be by courses and distances and
      shall be identical to the description shown on a survey provided by the
      Contributors to the Acquirers.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Permitted
      Title Exceptions” shall mean those exceptions to title to the Real Property
      that are satisfactory to the Acquirers as determined pursuant to
Section 2.2.

     

    “Property”
      shall mean collectively the Land, Improvements, the Inventory, the Reservation
      System, the Tangible Personal Property and the Intangible Personal
      Property.

     

    “Real
      Property” shall mean the Land and the Improvements.

     

    “Reservation
      System” shall mean the Contributors’ Reservation Terminal and Reservation
      System equipment and software, if any.

     

    “Securities
      Act” shall mean the Securities Act of 1933, as amended.

     

    “Study
      Period” shall mean the period commencing as of the date hereof, and
      continuing through the time of Closing.

     

    “Tangible
      Personal Property” shall mean the items of tangible personal Property
      consisting of all furniture, fixtures and equipment situated on, attached to,
      or
      used in the operation of the Hotel, and all furniture, furnishings, equipment,
      machinery, and other personal property of every kind located on or used in
      the
      operation of the Hotel and owned by the Contributors or the LLC.

    

    “Title
      Commitment” shall mean the commitment by the Title Company to issue the
      Owner's Title Policy.

     

    “Title
      Company” shall mean _________.

     

    “Tray
      Ledger” shall mean the final night's room revenue (revenue from rooms
      occupied as of 11:59:59 p.m. on the Apportionment Date, inclusive of food,
      beverage, telephone and similar charges), net of any sales taxes, room taxes
      or
      other taxes thereon.

     

    “Utilities”
      shall mean public sanitary and storm sewers, natural gas, telephone, public
      water facilities, electrical facilities and all other utility facilities and
      services necessary for the operation and occupancy of the Property as a
      hotel.

     

    1.2           Rules
      of Construction.  The following rules shall apply to the
      construction and interpretation of this Agreement:

     

    (a)           Singular
      words shall connote the plural number as well as the singular and vice versa,
      and the masculine shall include the feminine and the neuter.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)           All
      references herein to particular articles, sections, subsections, clauses or
      exhibits are references to articles, sections, subsections, clauses or exhibits
      of this Agreement.

     

    (c)           Headings
      contained herein are solely for convenience of reference and shall not
      constitute a part of this Agreement nor shall they affect its meaning,
      construction or effect.

     

    (d)           Each
      party hereto and its counsel have reviewed and revised (or requested revisions
      of) this Agreement, and therefore any usual rules of construction requiring
      that
      ambiguities are to be resolved against a particular party shall not be
      applicable in the construction and interpretation of this Agreement or any
      exhibits hereto.

     

    ARTICLE
      II

     

    CONTRIBUTION
      AND ACQUISITION; STUDY PERIOD;

    PAYMENT
      OF CONSIDERATION

     

    2.1           Contribution
      and Acquisition.  The Contributors agree to contribute, assign and
      transfer their Interests to the Acquirers and the Acquirers agree to accept
      the
      Interests in exchange for the Consideration and in accordance with the other
      terms and conditions set forth herein.

     

    2.2           Study
      Period.  (a)  The Acquirers shall have the right, until
      the end of the Study Period, to enter upon the Real Property and to perform,
      at
      the Acquirers’ expense, such economic, surveying, engineering, environmental,
      topographic and marketing tests, studies and investigations as the Acquirers
      may
      deem appropriate.  If such tests, studies and investigations warrant,
      in the Acquirers’ sole, absolute and unreviewable discretion, the purchase of
      the Interests for the purposes contemplated by the Acquirers, then the Acquirers
      may elect to proceed to Closing and shall so notify the Contributors prior
      to
      the expiration of the Study Period.  If for any reason the Acquirers
      do not so notify the Contributors of their determination to proceed to Closing
      prior to the expiration of the Study Period, or if the Acquirers notify the
      Contributors, in writing, prior to the expiration of the Study Period that
      it
      has determined not to proceed to Closing, this Agreement automatically shall
      terminate, and the Acquirers shall be released from any further liability or
      obligation under this Agreement.

     

    (b)           During
      the Study Period, the Contributors shall make available to the Acquirers, its
      agents, auditors, engineers, attorneys and other designees, for inspection
      copies of all existing architectural and engineering studies, surveys, title
      insurance policies, zoning and site plan materials, correspondence,
      environmental audits and other related materials or information if any, relating
      to the Property which are in, or come into, the Contributors’ possession or
      control.

     

    (c)           The
      Acquirers hereby indemnify and defend the Contributors against any loss, damage
      or claim arising from entry upon the Real Property by the Acquirers or any
      agents, contractors
      or employees of the Acquirers.  The Acquirers, at its own expense,
      shall restore any damage to the Real Property caused by any of the tests or
      studies made by the Acquirers.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d)           During
      the Study Period, the Acquirers, at its expense, may cause an examination of
      title to the Property to be made, and, prior to the expiration of the Study
      Period, may notify the Contributors of any defects in title shown by such
      examination that the Acquirers are unwilling to accept.  The
      Contributors shall notify the Acquirers whether the Contributors are willing
      to
      cure such defects and to proceed to Closing.  Contributors may cure,
      but shall not be obligated to cure such defects.  If such defects
      consist of deeds of trust, mechanics' liens, tax liens or other liens or charges
      in a fixed sum or capable of computation as a fixed sum, the Contributors,
      at
      their option, shall either pay and discharge (in which event, the Escrow Agent
      is authorized to pay and discharge at Closing) such defects at
      Closing.  If the Contributors are unwilling or unable to cure any such
      defects by Closing, the Acquirers shall elect (1) to waive such defects and
      proceed to Closing without any abatement in the Consideration or (2) to
      terminate this Agreement.  The Contributors shall not, after the date
      of this Agreement, subject the Property to and shall take all reasonable best
      efforts to prevent the Property from being subjected to any liens, encumbrances,
      covenants, conditions, restrictions, easements or other title matters or seek
      any zoning changes or take any other action which may affect or modify the
      status of title without the Acquirers’ prior written consent, which consent
      shall not be unreasonably withheld or delayed.  All title matters
      revealed by the Acquirers’ title examination and not objected to by the
      Acquirers as provided above shall be deemed Permitted Title
      Exceptions.  If Acquirers shall fail to examine title and notify the
      Contributors of any such title objections by the end of the Study Period, all
      such title exceptions (other than those rendering title unmarketable and those
      that are to be paid at Closing as provided above) shall be deemed Permitted
      Title Exceptions.

     

    2.3           Payment
      of the Consideration. The Consideration shall be paid to the Contributors in
      the following manner:

     

    (a)           Partnership
      Acquirer has made a deposit to Contributors in the sum of Two Million Dollars
      ($2,000,000.00) (the “Deposit”) as a refundable deposit, paid directly to the
      Contributors. The Deposit shall be refunded to Partnership Acquirer should
      the
      Acquirers terminate the Agreement. Contributors agree to pay interest to
      Partnership Acquirer on the Deposit at a rate of Ten Percent (10%) per annum
      from date of receipt of the Deposit until date of closing or termination of
      the
      Agreement and return of the Deposit to the Partnership Acquirer. Should closing
      occur, Contributors shall refund Deposit to Partnership Acquirer and Partnership
      Acquirer shall pay to Contributor the LP Units, the price of such LP Units
      to be
      determined on the date of closing calculated as the Purchase Price less the
      principal amount of the Existing Mortgage outstanding on the Closing Date,
      divided by the average volume-weighted closing price of Hersha Hospitality
      Trust
      common shares over a twenty (20) trading day period that ends at the conclusion
      of the previous trading day.

    

    (b)           At
      Closing, the lender shall give consent to such contribution and within a
      reasonable period of time, lender shall cause modification or assumption of
      the
      Existing Mortgage,
      as appropriate. Any adjustments and prorations to be made pursuant to the terms
      of this Agreement shall be paid by wire transfer of immediately available funds
      to an account specified by the party due to receive same.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)           Notwithstanding
      the foregoing, no LP Units shall be issued by the Partnership Acquirer, and
      following such issuance no LP Units shall be transferred by the Contributors
      to,
      any person or entity that is not an accredited investor within the meaning
      of
      Regulation D promulgated by the United States Securities and Exchange Commission
      (“SEC”) under the Securities Act of 1933, as amended (the “Securities
      Act”), and to the extent any such non-accredited person or entity is
      entitled to receive any portion of the Consideration, such portion shall be
      paid
      in cash rather than LP Units and the number of LP Units issuable in payment
      of
      the Consideration shall be reduced accordingly. The Contributors agree to take
      such actions as Partnership Acquirer may reasonably request in order to assure
      that the issuance of any LP Units pursuant to this Agreement complies with
      the
      requirements of the Securities Act and Regulation D promulgated thereunder.
      Except as otherwise expressly set forth in this Agreement, the Contributors
      acknowledge and agree that once the Closing occurs, the Contributors shall
      no
      longer hold any right, title or interest in the Property (except through its
      ownership of Partnership Acquirer). Contributors hereby direct Acquirers to
      pay,
      issue and distribute (as applicable) the Consideration on the Closing Date
      to
      the Contributors in such amounts set forth in this
      Agreement. The Contributors that acquire LP Units
      acknowledge that any certificates evidencing the LP Units will bear appropriate
      legends indicating (i) that the LP Units have not been registered under the
      Securities Act, and (ii) that Partnership Acquirer’s Limited Partnership
      Agreement (the “Acquirer’s Limited Partnership Agreement”) restricts the
      transfer of the LP Units. The Contributors shall upon receipt of the LP Units
      at
      Closing become a limited partner of Acquirer by executing the form of joinder
      (the “Joinder”) to the Partnership Acquirer’s Limited Partnership
      Agreement attached hereto as Exhibit J and deliver the executed Joinder
      at closing pursuant to the terms of Section 6.2 hereof;
provided, however, that if any Contributor is presently a
      limited partner of the Partnership Acquirer, such Contributor shall not be
      required to execute and deliver the Joinder.  By executing and
      delivering the Joinder in accordance with the terms hereof, each Contributor
      acknowledges that it will be bound by the terms and provisions of the Acquirer’s
      Limited Partnership Agreement.

     

    ARTICLE
      III

     

    CONTRIBUTOR’S
      REPRESENTATIONS, WARRANTIES AND COVENANTS

     

    To
      induce
      the Acquirers to enter into this Agreement and to purchase the Property,
      Contributors hereby make the following representations, warranties and
      covenants, upon each of which Contributors acknowledge and agree that the
      Acquirers are entitled to rely and has relied:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.1           Identity
      and Power.

     

    (a)           The
      Hersha Contributor is a Delaware limited liability company and has all requisite
      powers and all governmental licenses, authorizations, consents and approvals
      necessary to carry on its business as now conducted, to own, lease and operate
      its properties, to execute and deliver this Agreement and any document or
      instrument required to be executed and delivered on behalf of the Hersha
      Contributor hereunder, to perform its obligations under this Agreement and
      any
      such other documents or instruments and to consummate the transactions
      contemplated hereby.

     

    (b)           The
      Patel Contributor is an individual and has all requisite powers and all
      governmental licenses, authorizations, consents and approvals necessary to
      carry
      on his business as now conducted, to own, lease and operate its properties,
      to
      execute and deliver this Agreement and any document or instrument required
      to be
      executed and delivered on behalf of the Patel Contributor hereunder, to perform
      his obligations under this Agreement and any such other documents or instruments
      and to consummate the transactions contemplated hereby.

     

    (c)           The
      Shah Contributor is an individual and has all requisite powers and all
      governmental licenses, authorizations, consents and approvals necessary to
      carry
      on his business as now conducted, to own, lease and operate its properties,
      to
      execute and deliver this Agreement and any document or instrument required
      to be
      executed and delivered on behalf of the Shah Contributor hereunder, to perform
      his obligations under this Agreement and any such other documents or instruments
      and to consummate the transactions contemplated hereby.

     

    (d)           The
      K&D Contributor is a Michigan limited liability company and has all
      requisite powers and all governmental licenses, authorizations, consents and
      approvals necessary to carry on its business as now conducted, to own, lease
      and
      operate its properties, to execute and deliver this Agreement and any document
      or instrument required to be executed and delivered on behalf of the K&D
      Contributor hereunder, to perform its obligations under this Agreement and
      any
      such other documents or instruments and to consummate the transactions
      contemplated hereby.

     

    3.2           Authorization,
      No Violations and Notices.

     

    (a)           The
      execution, delivery and performance of this Agreement by the Contributors,
      and
      the consummation of the transactions contemplated hereby have been duly
      authorized, adopted and approved by the Contributors.  No other
      proceedings are necessary to authorize this Agreement and the transactions
      contemplated hereby.  This Agreement has been duly executed by the
      Contributors and is a valid and binding obligation enforceable against them
      in
      accordance with its terms.

     

    (b)           Neither
      the execution, delivery, or performance by the Contributors of this Agreement,
      nor the consummation of the transactions contemplated hereby, nor compliance
      by
      the Contributors with any of the provisions hereof, will

     

    (i)           violate,
      conflict with, result in a breach of any provision of, constitute a default
      (or
      an event that, which, with or lapse of time or both, would constitute
      a default) under, result in the termination of, accelerate the performance
      required by, or result in a right of termination or acceleration, or the
      creation of any lien, security interest, charge, or encumbrance upon any of
      the
      Property or assets of the LLC, under any of  the terms, conditions, or
      provisions of, the Articles of Organization, the LLC Operating Agreement, or
      any
      note, bond, mortgage, indenture, deed of trust, license (including without
      limitation, the License), lease, agreement, or other instrument, or obligation
      to which the LLC is a party, or by which the LLC may be bound, or to which
      the
      LLC or the Property or assets may be subject; or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (ii)    violate
      any
      judgment, ruling, order, writ, injunction, decree, statute, rule, or regulation
      applicable to the LLC or its Property or assets that would not be violated
      by
      the execution, delivery or performance of this Agreement or the transactions
      contemplated hereby by the Contributors or compliance by the Contributors with
      any of the provisions hereof.

     

    3.3           Litigation
      with respect to Contributors.  There is no action, suit, claim or
      proceeding pending or, to the Contributors’ Knowledge, threatened against or
      affecting the Contributors or their assets in any court, before any arbitrator
      or before or by any governmental body or other regulatory authority (i) that
      would materially adversely affect the Contributors or the Interests, (ii) that
      seeks restraint, prohibition, damages or other relief in connection with this
      Agreement or the transactions contemplated hereby, or (iii) would delay the
      consummation of any of the transactions contemplated hereby.  The
      Contributors are not subject to any judgment, decree, injunction, rule or order
      of any court relating to the Contributors’ participation in the transactions
      contemplated by this Agreement.

     

    
      	
            	
              3.4

            	
              Interests
                and Property.

            

    

     

    (a)           The
      Interests are, on the date hereof, and will be on the Closing Date, free and
      clear of all liens and encumbrances and the Contributors have good, marketable
      title thereto and the right to convey same in accordance with the terms of
      this
      Agreement.  Upon delivery of the Contributors’ Assignment and
      Assumption Agreement to the Acquirers at Closing, good valid and marketable
      title to the Contributors’ Interests, free and clear of all liens and
      encumbrances, will pass to the Acquirers.  The Interests constitute
      the only outstanding securities and membership interests of the
      LLC.

     

    (b)           Except
      for the lien created in connection with the Existing Mortgage, the Property
      is,
      on the date hereof, and will be on the Closing Date, free and clear of all
      liens
      and encumbrances, and the LLC has good, marketable title thereto and the right
      to convey same.  The LLC is the fee simple owner of the Real Property
      and the sole owner of the Property.

     

    
      	
               

            	
              3.5 

            	
              Bankruptcy.
                No Act of Bankruptcy has occurred with respect to the
                LLC.

            

    

     

    3.6   Brokerage
      Commission.  The Contributors have not engaged the services of,
      nor is it or will it or Acquirer become liable to, any real estate agent,
      broker, finder or any other person
      or
      entity for any brokerage or finder’s fee, commission or other amount with
      respect to the transactions described herein on account of any action by the
      Contributor.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              3.7

            	
              The
                LLC.

            

    

     

    (a)           The
      LLC is a limited liability company duly formed, validly existing and in good
      standing under the laws of the State of Connecticut and has all requisite powers
      necessary to carry on its business as now conducted, to own, lease and operate
      its properties.

     

    (b)           Neither
      the execution, delivery, or performance by the Contributors of this Agreement,
      nor the consummation of the transactions contemplated hereby, nor compliance
      by
      the Contributors or the LLC with any of the provisions hereof,
      will:

     

    (i)           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, accelerate the performance required by,
      or
      result in a right of termination or acceleration, or the creation of any lien,
      security interest, charge, or encumbrance upon any of the Property or other
      assets of the LLC, under any of the terms, conditions, or provisions of, the
      Articles of Organization or LLC Operating Agreement, or any note, bond,
      mortgage, indenture, deed of trust, license, lease, agreement, or other
      instrument or obligation to which the LLC is a party, or by which the LLC may
      be
      bound, or to which the LLC or its properties or assets may be subject;
      or

     

    (ii)          violate
      any judgment, ruling, order, writ, injunction, decree, statute, rule, or
      regulation applicable to the LLC or any of the LLC’s properties or
      assets.

     

    (c)           Except
      for the Contributors, no party has any interest in the LLC or the Property
      or
      any portion thereof, or the right or option to acquire any interest in the
      LLC
      or the Property or any portion thereof.  The LLC has no subsidiaries
      and does not directly or indirectly own any securities of or interest in any
      other entity, including, without limitation, any LLC or joint
      venture.

     

    (d)           The
      LLC has conducted no business other than the ownership and operation of the
      Property.

     

    3.8           Liabilities,
      Debts and Obligations.  Except for the Continuing Liabilities and
      the Existing Mortgage, the LLC has no liabilities, debts or
      obligations.

     

    
      	
                          
                

            	
              3.9

            	
              Tax
                Matters.

            

    

     

    (a)           Notwithstanding
      anything to the contrary contained in this Agreement, including without
      limitation the use of words and phrases such as “sell,” “sale,” purchase,” and
“pay,” the parties hereto acknowledge and agree that it is their intent that the
      transaction contemplated
      hereby shall be treated for federal income tax purposes pursuant to
      Section 721 of the Internal Revenue Code of 1986, as amended, as the
      contribution of the Interests by the Contributors to the Acquirers in exchange
      for the Consideration, and not as a transaction in which any Contributors are
      acting other than in the capacity as a prospective partner in the Partnership
      Acquirer.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)           The
      Contributors represent and warrant that they has obtained from their own counsel
      advice regarding the tax consequences of (i) the transfer of the Interests
      to
      the Acquirers and the receipt of the Consideration therefor, (ii) the
      Contributors’ admission as a limited partner of the Partnership Acquirer, and
      (iii) any other transaction contemplated by this Agreement.  Each
      Contributor further represents and warrants that it has not relied on the
      Acquirers or the Acquirers’ representatives or counsel for such tax
      advice.

     

    (c)           The
      Contributors have caused the LLC to file within the time and in the manner
      prescribed by law all federal, state, and local tax returns and reports,
      including but not limited to income, gross receipts, intangible, real property,
      excise, withholding, franchise, sales, use, employment, personal property,
      and
      other tax returns and reports, required to be filed by the LLC under the laws
      of
      the United States and of each state or other jurisdiction in which the LLC
      conducts business activities requiring the filing of tax returns or
      reports.  All tax returns and reports filed by the LLC are true and
      correct in all material respects.  The LLC has paid in full all taxes
      of whatever kind or nature for the periods covered by such
      returns.  The LLC has not been delinquent in the payment of any tax,
      assessment, or governmental charge or deposit and has no tax deficiency or
      claim
      outstanding, assessed, threatened, or proposed against it.  The
      charges, accruals, and reserves for unpaid taxes on the books and records of
      the
      LLC as of the Closing Date are sufficient in all respects for the payment of
      all
      unpaid federal, state, and local taxes of the LLC accrued for or applicable
      to
      all periods ended on or before the Closing Date.  There are no tax
      liens, whether imposed by the United States, any state, local, or other taxing
      authority, outstanding against the LLC or any of its assets.  The
      federal, state, and local tax returns of the LLC have not been audited, nor
      has
      the LLC or the Contributor received any notice of any federal, state, or local
      audit.  The LLC has not obtained or received any extension of time
      (beyond the Closing Date) for the assessment of deficiencies for any years
      or
      waived or extended the statute of limitations for the determination or
      collection of any tax.  To the Contributors’ Knowledge, no unassessed
      tax deficiency is proposed or threatened against the LLC.

    

    (d)           All
      taxes, including real property taxes and rental taxes or the equivalent, and
      all
      interest and penalties due thereon, required to be paid or collected by the
      LLC
      in connection with the operation of the Property as of the Closing Date will
      have been collected and/or paid to the appropriate governmental authorities,
      as
      required or such amounts shall be pro-rated as of the Closing Date. The
      Contributors shall cause the LLC to file, all necessary returns and petitions
      required to be filed through the Closing Date.  The Contributors shall
      cause the LLC to prepare and file all federal and state income tax returns
      for
      the tax period ending on the Closing Date, which shall reflect the termination
      for tax purposes of the LLC.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.10         Contracts
      and Agreements.  There is no loan agreement, guarantee, note,
      bond, indenture and other debt instrument, lease and other contract to which
      the
      LLC is a party or by which its assets are bound other than Existing Mortgage,
      Permitted Title Exceptions, the Leases, and the Operating
      Agreements.

     

    3.11         No
      Special Taxes.  The Contributors have no Knowledge of, nor have
      they received any written notice of, any special taxes or assessments relating
      to the LLC or Property or any part thereof or any planned public improvements
      that may result in a special tax or assessment against the
      Property.

     

    3.12         Compliance
      with Existing Laws.  The LLC possesses all Authorizations, each of
      which is valid and in full force and effect, and, to Contributors’ Knowledge, no
      provision, condition or limitation of any of the Authorizations has been
      breached or violated.   The LLC has not misrepresented or failed
      to disclose any relevant fact in obtaining all Authorizations, and the
      Contributors have no Knowledge of any change in the circumstances under which
      those Authorizations were obtained that result in their termination, suspension,
      modification or limitation.  The Contributors have no Knowledge, nor
      have they received written notice within the past three years, of any existing
      violation of any provision of any applicable building, zoning, subdivision,
      environmental or other governmental ordinance, resolution, statute, rule, order
      or regulation, including but not limited to those of environmental agencies
      or
      insurance boards of underwriters, with respect to the ownership, operation,
      use,
      maintenance or condition of the Property or any part thereof, or requiring
      any
      repairs or alterations other than those that have been made prior to the date
      hereof.

     

    3.13         Operating
      Agreements.  The LLC has performed all of its obligations under
      each of the Operating Agreements and no fact or circumstance has occurred which,
      by itself or with the passage of time or the giving of notice or both, would
      constitute a material default under any of the Operating
      Agreements.  Without the prior written consent of the Acquirers, which
      consent will not be unreasonably withheld or delayed, the Contributors shall
      cause the LLC not to enter into any new management agreement, maintenance or
      repair contract, supply contract, lease in which it is lessee or other
      agreements with respect to the Property, nor shall the Contributors cause the
      LLC to enter into any agreements modifying the Operating
      Agreements.

     

    3.14         Warranties
      and Guaranties.  The Contributors shall cause the LLC not to
      release or modify any warranties or guarantees, if any, of manufacturers,
      suppliers and installers relating to the Improvements and the Tangible Personal
      Property or any part thereof, except with the prior written consent of the
      Acquirers, which consent shall not be unreasonably withheld or
      delayed.  A complete list of all such warranties and guaranties in
      effect as of the date of this Agreement is attached hereto as
Exhibit H.

     

    3.15         Insurance.  All
      of the LLC’s Insurance Policies are valid and in full force and effect, all
      premiums for such policies were paid when due and the Contributors shall cause
      the LLC to pay all future premiums for such policies (and any replacements
      thereof) on or before the due date therefor.  The Contributors shall
      cause the LLC to pay all premiums on, and shall cause the LLC not to cancel
      or
      allow to expire, any of the LLC’s Insurance Policies prior to the Closing
      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 Contributors shall cause the LLC to name
      the Acquirers as additional insureds on each of the LLC’s Insurance
      Policies.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.16         Condemnation
      Proceedings; Roadways.  The LLC has received no written notice of
      any condemnation or eminent domain proceeding pending or threatened against
      the
      Property or any part thereof.  The Contributors have no Knowledge of
      any change or proposed change in the route, grade or width of, or otherwise
      affecting, any street or road adjacent to or serving the Real
      Property.

     

    3.17         Litigation
      with Respect to LLC.  Except as set forth on Exhibit I
      there is no action, suit or proceeding pending or known to be threatened against
      or affecting the LLC or any part of or interest in the Property in any court,
      before any arbitrator or before or by any governmental agency which (a) in
      any
      manner raises any question affecting the validity or enforceability of this
      Agreement or any other material agreement or instrument to which the LLC is
      a
      party or by which it is bound and that is or is to be used in connection with,
      or is contemplated by, this Agreement, (b) could materially and adversely affect
      the business, financial position or results of operations of the LLC, (c) could
      materially and adversely affect the ability of the LLC to perform its
      obligations hereunder, or under any document to be delivered pursuant hereto,
      (d) could create a material lien on the Property, any part thereof or any
      interest therein, or (e) could otherwise materially and adversely affect the
      Property, any part thereof or any interest therein or the use, operation,
      condition or occupancy thereof.

     

    3.18         Labor
      Disputes and Agreements.  There are not currently any labor
      disputes pending or, threatened as to the operation or maintenance of the
      Property or any part thereof.   The LLC is not a party to any
      union or other collective bargaining agreement with employees employed in
      connection with the ownership, operation or maintenance of the
      Property.  The Acquirers will not be obligated to give or pay any
      amount to any employee of the LLC, and the Acquirers shall not have any
      liability under any pension or profit sharing plan that the LLC may have
      established with respect to the Property or their or its employees.

     

    3.19         Financial
      Information.  To the Contributors’ Knowledge, except as otherwise
      disclosed in writing to the Acquirers prior to the end of the Study Period,
      for
      each of the LLC’s accounting years, when a given year is taken as a whole, all
      of the LLC’s financial information previously delivered or to be delivered to
      the Acquirers is and shall be correct and complete in all material respects
      and
      presents accurately the financial condition of the LLC and results of the
      operations of the Property for the periods indicated, except that such
      statements do not have footnotes or schedules that may otherwise be required
      by
      GAAP.  If requested by the Acquirers, the Contributors shall cause the
      LLC to deliver promptly all four-week period ending financial information
      available to the LLC.  The LLC’s financial information is prepared
      based on books and records maintained by the LLC in accordance with the LLC’s
      accounting system.  The LLC’s financial information has been provided
      to the Acquirer without any changes or alteration thereto.  To the
      best of Contributors’ Knowledge, since the date of the last financial statement
included
      in the LLC's financial information, there has been no material adverse change
      in
      the financial condition or in the operations of the Property.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.20         Organizational
      Documents.  The LLC’s Organizational Documents are in full force
      and effect and have not been modified or supplemented, and no fact or
      circumstance has occurred that, by itself or with the giving of notice or the
      passage of time or both, would constitute a default thereunder.

     

    3.21         Operation
      of Property.  The Contributors covenant that between the date
      hereof and the Closing Date, Contributors shall cause the LLC to (a) operate
      the
      Property only in the usual, regular and ordinary manner consistent with the
      LLC’s prior practice, (b) maintain the books of account and records in the
      usual, regular and ordinary manner, in accordance with sound accounting
      principles applied on a basis consistent with the basis used in keeping its
      books in prior years, and (c) use all reasonable efforts to preserve intact
      the
      present business organization, keep available the services of the present
      officers and employees and preserve their relationships with suppliers and
      others having business dealings with them.  The Contributors shall
      cause the LLC to continue to make good faith efforts to take guest room
      reservations and to book functions and meetings and otherwise to promote the
      business of the Property in generally the same manner as the LLC did prior
      to
      the execution of this Agreement.  Except as otherwise permitted
      hereby, from the date hereof until Closing, the Contributors shall use their
      good faith efforts to ensure that the LLC shall not take any action or fail
      to
      take action the result of which (i) would have a material adverse effect on
      the
      Property or the Acquirers’ ability to continue the operation thereof after the
      Closing Date in substantially the same manner as presently conducted, (ii)
      reduce or cause to be reduced any room rents or any other charges over which
      Contributors have operational control, or (iii) would cause any of the
      representations and warranties contained in this Article III to be untrue
      as of Closing.

     

    3.22         Bankruptcy
      with respect to LLC.  No Act of Bankruptcy has occurred with
      respect to the LLC.

     

    3.23         Hazardous
      Substances.  Except for matters in LLC’s or Acquirers’ audits,
      Contributors have no Knowledge:  (a) of the presence of any
“Hazardous Substances” (as defined below) 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, or any portion thereof, or (c) of the presence of any PCB
      transformers serving, or stored on, the Property, or any portion thereof, and
      Contributors have 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
      (as
      used herein, “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 Governmental Body, or (3) a basis for liability
      of the
      owner
      of the Property to any Governmental Body or third party, and Hazardous
      Substances shall include, but not be limited to, hydrocarbons, petroleum,
      gasoline, crude oil, or any products, by-products or components thereof, and
      asbestos).  Notwithstanding anything to the contrary contained herein
      Contributor shall have no liability to Acquirer for any Hazardous Substances
      of
      which Contributor has no Knowledge.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.24         Room
      Furnishings.  All public spaces, lobbies, meeting rooms, and each
      room in the Hotel available for guest rental is furnished in accordance with
      commercially reasonable standards for the Hotel and room type.

     

    3.25         Intentionally
      Omitted.

     

    3.26         Independent
      Audit.  Contributors shall provide access by Acquirers’
representatives, to all financial and other information relating to the
      Property
      and the LLC.

     

    3.27         Bulk
      Sale Compliance.  Contributors shall indemnify Acquirers against
      any claim, loss or liability arising under the bulk sales law in connection
      with
      the transaction contemplated herein.

     

    3.28         Sufficiency
      of Certain Items.  The Property contains not less
      than:

     

    (a)           a
      sufficient amount of furniture, furnishings, color television sets, carpets,
      drapes, rugs, floor coverings, mattresses, pillows, bedspreads and the like,
      to
      furnish each guest room, so that each such guest room is, in fact, fully
      furnished; and

     

    (b)           a
      sufficient amount of towels, washcloths and bed linens, so that there are three
      sets of towels, washcloths and linens for each guest room (one on the beds,
      one
      on the shelves, and one in the laundry), together with a sufficient supply
      of
      paper goods, soaps, cleaning supplies and other such supplies and materials,
      as
      are reasonably adequate for the current operation of the Hotel.

     

    3.29         Intentionally
      Omitted.

     

    3.30         Leases.  True,
      complete copies of the Leases, are attached as Exhibit D
      hereto.  The Leases are, and will at Closing be, in full force and
      effect and neither Contributors nor the LLC, is in default and the Contributors
      shall make good faith efforts for themselves and the LLC not to be in default
      with respect thereto (with or without the giving of any notice and/or lapse
      of
      time).  The Leases are, or will be at Closing, freely assignable by
      Contributors and Contributors will have obtained all consents of any third
      party
      necessary to assign the Leases to Acquirers.

     

    3.31         Noncontravention.  The
      execution and delivery of, and the performance by the Contributors of their
      obligations under this Agreement do not and will not contravene, or constitute
      a
      default under, any provision of applicable law or regulation, or any agreement,
      judgment, injunction, order, decree or other instrument binding upon the
      Contributors, or result in the creation of any lien or other encumbrance on
      any
      asset of the Contributors.  There are no outstanding
      agreements (written or oral) pursuant to which the Contributors (or any
      predecessor to or representative of the Contributors) have agreed to contribute
      or has granted an option or right of first refusal to acquire the Interests
      or
      the Property or any part thereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.32         Securities
      Law Matters.

     

    (a)           The
      Contributors are knowledgeable, sophisticated and experienced in business and
      financial matters; the Contributors have previously invested in securities
      similar to the LP Units and fully understand the limitations on transfer imposed
      by the federal securities laws and as described in this Agreement. The
      Contributors are able to bear the economic risk of holding the LP Units for
      an
      indefinite period and are able to afford the complete loss of its investment
      in
      the LP Units; the Contributors have received and reviewed all information and
      documents about or pertaining to Partnership Acquirer and Hersha, the business
      and prospects of Partnership Acquirer and Hersha and the issuance of the LP
      Units as the Contributors deem necessary or desirable; and the Contributors
      have
      had the opportunity to review public filings made with the SEC pursuant to
      the
      Exchange Act related to Partnership Acquirer and Hersha; and the Contributors
      have been given the opportunity to obtain any additional information or
      documents and to ask questions and receive answers about such information and
      documents, Partnership Acquirer, Hersha, the business and prospects of
      Partnership Acquirer and Hersha and the LP Units which the Contributors deem
      necessary or desirable to evaluate the merits and risks related to their
      investment in the LP Units and to conduct their own independent valuation of
      the
      LP Units; and the Contributors understand and have taken cognizance of all
      risk
      factors related to the purchase of the LP Units.  The Contributors
      were at no time presented with or solicited by any form of general solicitation
      or general advertising, including, but not limited to, any advertisement,
      article, notice or other communication published in any newspaper, magazine,
      or
      similar media or broadcast over television or radio, or any seminar or meeting
      whose attendees have been invited by any general solicitation or general
      advertising in connection with the acquisition of the LP Units contemplated
      hereby.  The Contributors are sophisticated real estate investors. In
      acquiring the LP Units and engaging in this transaction, the Contributors are
      not relying upon any representations made to it by Acquirers or Hersha, or
      any
      of the officers, employees, or agents of Acquirers or Hersha not contained
      herein. The Contributors are relying upon their own independent analysis and
      assessment (including with respect to taxes), and the advice of such
      Contributors’ advisors (including tax advisors), and not upon that of Acquirers
      or Hersha or any of Acquirers’ or Hersha’s advisors or affiliates, for purposes
      of evaluating, entering into, and consummating the transactions contemplated
      by
      this Agreement. The Contributors represent and warrant that they has reviewed
      and approved the form of the Partnership Acquirer’s Limited Partnership
      Agreement attached hereto as Exhibit K.

    

    (b)           The
      Contributors understand that the LP Units have not been registered under the
      Securities Act or any state securities acts and are instead being offered and
      sold in reliance on an exemption from such registration requirements. The LP
      Units issuable to the Contributors are being acquired solely for the
      Contributors’ own accounts, for investment, and are not being acquired with a
      view to, or for resale in connection with, any distribution, subdivision, or
      fractionalization thereof, in violation of such laws, and the Contributors
      have
      no present
      intention to enter into any contract, undertaking, agreement, or arrangement
      with respect to any such resale. The Contributors understand that any
      certificates evidencing the LP Units will contain appropriate legends as
      required by the Partnership Acquirer’s Limited Partnership Agreement that
      reflect the non-negotiability of the certificate and that the LP Units
      represented by the certificate are governed by and are transferable only in
      accordance with the provisions of the Partnership Acquirer’s Limited Partnership
      Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)           Each
      Contributor is an "accredited investor" as that term is defined in Rule 501
      of
      Regulation D under the Securities Act.  In order to be an “accredited
      investor”, as such term is defined in Rule 501 of Regulation D promulgated under
      the Securities Act, you must be one of the following:

     

    (i)           a
      bank as defined in Section 3(a)(2) of the Securities Act, or a savings and
      loan
      association or other institution as defined in Section 3(a)(5)(A) of the
      Securities Act, whether acting in its individual or fiduciary
      capacity;

     

    (ii)           a
      broker or dealer registered pursuant to Section 15 of the Securities Exchange
      Act of 1934, as amended (the “Exchange Act”);

     

    (iii)          an
      insurance company as defined in Section 2(13) of the Securities
      Act;

     

    (iv)          an
      investment company registered under the Investment Company Act of 1940, as
      amended;

     

    (v)           a
      business development company as defined in Section 2(a)(48) of the Investment
      Company Act of 1940, as amended;

     

    (vi)          a
      Small Business Investment Company licensed by the U.S. Small Business
      Administration under Section 301(c) or (d) of the Small Business Investment
      Act
      of 1958, as amended;

     

    (vii)         a
      plan established and maintained by a state, its political subdivisions, or
      any
      agency or instrumentality of a state or its political subdivisions, for the
      benefit of its employees, if such plan has total assets in excess
      of  Five Million Dollars ($5,000,000.00);

     

    (viii) 
        an employee benefit
      plan within the meaning of the Employee Retirement Income Security Act of 1974,
      as amended if the investment decision is made by a plan fiduciary, as defined
      in
      Section 3(21) of such Act, which is either a bank, savings and loan association,
      insurance company or registered investment adviser, or if the employee benefit
      plan has total assets in excess of Five Million Dollars ($5,000,000.00) or,
      if a
      self-directed plan, with investment decisions made sole by persons that are
      accredited investors;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (ix)           a
      private business development company as defined in Section 202(a)(22) of the
      Investment Advisors Act of 1940, as amended;

     

    (x)           an
      (a) organization described in Section 501(c)(3) of the Internal Revenue Code
      of
      1986, as amended, (b) corporation, (c) Massachusetts or similar business trust,
      (d) partnership, or (e) limited liability company, in each case not formed
      for
      the specific purpose of acquiring LP Units of the Acquirer or shares of Hersha’s
      common stock, with total assets in excess of Five Million Dollars
      ($5,000,000.00);

     

    (xi)           a
      director or executive officer of Acquirer or Hersha;

     

    (xii)          a
      natural person whose individual net worth, or joint net worth with his or her
      spouse, at the time of his or her acquisition of the LP Units exceeds One
      Million Dollars ($1,000,000.00);

     

    (xiii)  
        a natural person
      who has an individual income in excess of Two Hundred Thousand Dollars
      ($200,000.00) in each of the two most recent years or joint income with that
      person’s spouse in excess of Three Hundred Thousand Dollars ($300,000.00) in
      each of those years and has a reasonable expectation of reaching the same income
      level in the current year;

     

    (xiv)  
        a trust, with total
      assets in excess of Five Million Dollars ($5,000,000.00), not formed for the
      specific purpose of acquiring LP Units of the Acquirer or shares of Hersha’s
      common stock whose acquisition of LP Units of the Acquirer or shares of Hersha’s
      common stock is directed by a sophisticated person as described in Rule
      506(b)(2)(ii) of Regulation D under the Securities Act; or

     

    
      (xv)  
          an entity in which
        all of the equity owners are accredited investors.

       

    

    3.33         Patriot
      Act Representations.  Each Contributor and, to the actual
      knowledge of each such Contributor, any direct or indirect owner of the LLC
      or
      such Contributor, (i) are not included on any Government List (as defined
      below), (ii) are not persons who have been determined by competent authority
      to
      be subject to the prohibitions contained in the Presidential Executive Order
      No.
      13224 or any other similar prohibitions contained in the rules and regulations
      of the OFAC or in any enabling legislation or other Presidential Executive
      Orders in respect thereof, (iii) have not been indicted or convicted of any
      Patriot Act Offenses, or (iv) are not currently under investigation by any
      governmental authority for alleged criminal activity. For purposes of this
      Agreement, (i) “Government List” means (A) the Specially Designated Nationals
      and Blocked Persons List maintained by OFAC, (B) any other list of terrorists,
      terrorist organizations or narcotics traffickers maintained pursuant to any
      of
      the Rules and Regulations of OFAC, or (C) any similar list maintained by the
      United States Department of State, the United States Department of Commerce
      or
      any other governmental authority or pursuant to any Executive Order of the
      President of the United States of America; (ii) “OFAC” means
      the
      Office of Foreign Asset Control, U.S. Department of the Treasury, (iii) “Patriot
      Act” means the Uniting and Strengthening America by Providing Appropriate Tools
      Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001,
      as
      the same may be amended from time to time, and corresponding provisions of
      future laws, and (iv) “Patriot Act Offense” means any violation of the criminal
      laws of the United States of America or of any of the several states, or that
      would be a criminal violation if committed within the jurisdiction of the United
      States of America or any of the several states, relating to terrorism or the
      laundering of monetary instruments, including any offense under (A) the criminal
      laws against terrorism, (B) the criminal laws against money laundering, (C)
      the
      Bank Secrecy Act, as amended, (D) the Money Laundering Control Act of 1986,
      as
      amended, or (E) the Patriot Act and also includes the crimes of conspiracy
      to
      commit, or aiding and abetting another to commit, any of the
      foregoing.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Each
      of
      the representations, warranties and covenants contained in this Article
      III and its various subparagraphs are intended for the benefit of the
      Acquirers and may be waived in whole or in part, by the Acquirers, but only
      by
      an instrument in writing signed by the Acquirers.  Each of said
      representations, warranties and covenants shall survive the closing of the
      transaction contemplated hereby for twelve (12) months, and no investigation,
      audit, inspection, review or the like conducted by or on behalf of the Acquirers
      shall be deemed to terminate the effect of any such representations, warranties
      and covenants, it being understood that the Acquirers have the right to rely
      thereon and that each such representation, warranty and covenant constitutes
      a
      material inducement to the Acquirers to execute this Agreement and to close
      the
      transaction contemplated hereby and to pay the Consideration to the
      Contributors.  Acquirers acknowledge and agree that, except for the
      representations and warranties expressly set forth herein, Acquirers are
      acquiring the LLC and Property “AS-IS, WHERE-IS” with no representations or
      warranties by or from Contributors, express or implied, or any nature
      whatsoever.  

     

    ARTICLE
      IV

     

    ACQUIRER'S
      REPRESENTATIONS, WARRANTIES AND COVENANTS

     

    To
      induce
      the Contributors to enter into this Agreement and to sell the Interests, the
      Acquirers hereby make the following representations, warranties and covenants
      upon each of which the Acquirers acknowledge and agree that the Contributors
      are
      entitled to rely and has relied:

     

    4.1   Organization
      and
      Power.

     

    (a)           The
      Partnership Acquirer is a limited partnership duly organized, validly existing
      and in good standing under the laws of the Commonwealth of Virginia, and has
      all
      partnership powers and all governmental licenses, authorizations, consents
      and
      approvals to carry on its business as now conducted and to enter into and
      perform its obligations under this Agreement and any document or instrument
      required to be executed and delivered on behalf of the Acquirer
      hereunder.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)           The
      Manager Acquirer is a Delaware limited liability company and has all requisite
      powers and all governmental licenses, authorizations, consents and approvals
      necessary to carry on its business as now conducted, to own, lease and operate
      its properties, to execute and deliver this Agreement and any document or
      instrument required to be executed and delivered on behalf of the Manager
      Acquirer hereunder.

     

    4.2   Noncontravention.  The
      execution and delivery of this Agreement and the performance by the Acquirers
      of
      their obligations hereunder do not and will not contravene, or constitute a
      default under, any provisions of applicable law or regulation, the Partnership
      Acquirer’s partnership agreement, the Manager Acquirer’s operating agreement, or
      any agreement, judgment, injunction, order, decree or other instrument binding
      upon the Acquirers or result in the creation of any lien or other encumbrance
      on
      any asset of the Acquirers.

     

    4.3   Litigation.  There
      is no action, suit or proceeding, pending or known to be threatened, against
      or
      affecting the Acquirers in any court or before any arbitrator or before any
      Governmental Body which (a) in any manner raises any question affecting the
      validity or enforceability of this Agreement or any other agreement or
      instrument to which the Acquirers are a party or by which they are bound and
      that is to be used in connection with, or is contemplated by, this Agreement,
      (b) could materially and adversely affect the ability of the Acquirers to
      perform their obligations hereunder, or under any document to be delivered
      pursuant hereto.

     

    4.4   Bankruptcy.  No
      Act of Bankruptcy has occurred with respect to the Acquirers.

     

    4.5   No
      Brokers.  The Acquirers have not engaged the services of, nor are
      they or will they become liable to, any real estate agent, broker, finder or
      any
      other person or entity for any brokerage or finder's fee, commission or other
      amount with respect to the transaction described herein.

     

    ARTICLE
      V

     

    CONDITIONS
      AND ADDITIONAL COVENANTS

     

    The
      Acquirers’ obligations hereunder are subject to the satisfaction of the
      following conditions precedent and the compliance by the Contributors with
      the
      following covenants:

     

    5.1   Contributors’
      Deliveries.  The Contributors shall have delivered to the Escrow
      Agent or the Acquirers, as the case may be, on or before the date of Closing,
      all of the documents and other information required of Contributors pursuant
      to
Section 6.2.

     

    5.2   Representations,
      Warranties and Covenants; Obligations of Contributors;
      Certificate.  All of the Contributors’ representations and
      warranties made in this Agreement shall be true and correct as of the date
      hereof and as of the Closing Date as if then made, there shall have occurred
      no
      material adverse change in the financial condition of the Property or the LLC
      since
      the
      date hereof, the Contributors shall have performed all of their material
      covenants and other obligations under this Agreement and the Contributors shall
      have executed and delivered to the Acquirers at Closing a certificate to the
      foregoing effect.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.3   Title
      Insurance.  Good and indefeasible title to the fee interest in the
      Real Property shall be insurable as such by the Title Company at or below its
      regularly scheduled rates subject only to Permitted Title Exceptions as
      determined in accordance with Section 2.2.

     

    5.4   Condition
      of
      Improvements.  The Improvements and the Tangible Personal Property
      (including but not limited to the mechanical systems, plumbing, electrical,
      wiring, appliances, fixtures, heating, air conditioning and ventilating
      equipment, elevators, boilers, equipment, roofs, structural members and
      furnaces) shall be in the same condition at Closing as they are as of the date
      hereof, reasonable wear and tear excepted.  Prior to Closing, the
      Contributors shall not have diminished the quality or quantity of maintenance
      and upkeep services heretofore provided to the Real Property and the Tangible
      Personal Property and the Contributors shall not have diminished the
      Inventory.  The Contributors shall not have removed or caused or
      permitted to be removed any part or portion of the Real Property or the Tangible
      Personal Property unless the same is replaced, prior to Closing, with similar
      items of at least equal quality and acceptable to the Acquirers.

     

    5.5   Utilities.  All
      of the Utilities shall be installed in and operating at the Property, and
      service shall be available for the removal of garbage and other waste from
      the
      Property.

     

    5.6   Intentionally
      Omitted.

     

    5.7   Interests.  From
      the date hereof to and including the Closing Date, Contributors shall not sell,
      assign, pledge, hypothecate or otherwise transfer the Interests, except as
      contemplated by this Agreement, nor shall the Contributors cause or permit
      the
      LLC to issue any securities or membership interests to any person or to sell,
      pledge, transfer or otherwise dispose of the Property or any interest
      therein.

     

    5.8   Existing
      Mortgage.  Acquirer acknowledges that the Property and the LLC are
      subject to the Existing Mortgage, loans in the total original principal sum
      of
      Eight Million Four Hundred Twenty-Three Thousand Dollars ($8,423,000.00) from
      New Alliance Bank, a Connecticut banking corporation, successor by merger to
      Westbank, a Massachusetts banking corporation.  Acquirer will assume
      or modify the Existing Mortgage.

     

    5.9   Third
      Party
      Consents.  In the event of an assumption or modification of the
      Existing Mortgage as contemplated in Section 2.3(b) and 5.8, then as a
      condition to Closing, the LLC shall receive approval from New Alliance Bank
      (i)
      to the contribution of the Interests to Acquirers as contemplated hereunder
      and
      (ii) to the percentage lease structure whereby, on the Closing Date, the LLC
      shall lease the Property to a REIT subsidiary (“Lessee”) pursuant to a
      percentage lease, and Lessee shall enter into a new management agreement with
      Manager.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VI

     

    CLOSING

     

    6.1   
         Closing.  Closing
      shall be held at a location that is mutually acceptable to the parties, on
      or
      before July 1, 2007.

     

    6.2   Contributor’
      Deliveries.  At Closing, the Contributors shall deliver to
      Acquirers all of the following instruments, each of which shall have been duly
      executed and, where applicable, acknowledged on behalf of the Contributors
      and
      shall be dated as of the date of Closing:

     

    
      (a)           Certificates
        representing the Interests.

       

      (b)           The
        certificate required by Section 5.2.

       

      (c)           The
        Assignment and Assumption Agreement.

       

      (d)           
        Any and all service contracts, space leases, and agreements, including but
        not
        limited to that certain Agreement of Lease between 44 Hersha Norwich Associates,
        LLC, and Chelsearose, L.L.C., dated June 1, 2006 (the “Restaurant
        Lease”).

       

      (e)           Such
        agreements, affidavits or other documents as may be required by the Title
        Company to issue the Owner's Title Policy with affirmative coverage over
        mechanics' and materialmen's liens.

       

      (f)           The
        FIRPTA Certificates.

       

      (g)           True,
        correct and complete copies of all warranties, if any, of manufacturers,
        suppliers and installers possessed by the Contributors and relating to the
        Improvements and the Personal Property, or any part thereof.

       

      (h)           Copies
        of the LLC’s Organizational Documents.

       

      (i)           Appropriate
        consent of the LLC, authorizing (A) the execution of any documents to be
        executed and delivered by the LLC prior to, at or otherwise in connection
        with
        Closing and in connection with the transactions contemplated by this Agreement,
        and (B) the performance by the LLC of its obligations hereunder and under
        such documents.

       

      (j)           Valid,
        final and unconditional certificate(s) of occupancy for the Real Property
        and
        Improvements, issued by the appropriate Governmental Body.

       

      (k)           Such
        proof as the Acquirer may reasonably require with respect to Contributors’
compliance with the bulk sales laws or similar statutes.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      (l)           A
        written instrument executed by the Contributors, conveying and transferring
        to
        the Acquirers all of the Contributors’ right, title and interest in any
        telephone numbers and facsimile numbers relating to the Property, and, if
        the
        Contributors maintain a post office box, conveying to the Acquirers all of
        their
        interest in and to such post office box and the number associated therewith,
        so
        as to assure a continuity in operation and communication.

       

      (m)          All
        current real estate and personal property tax bills in the Contributors’
possession or under their control.

       

      (n)           A
        complete set of all guest registration cards, guest transcripts, guest
        histories, and all other available guest information.

       

      (o)           An
        updated schedule of employees, showing salaries and duties with a statement
        of
        the length of service of each such employee, brought current to a date not
        more
        than 48 hours prior to the Closing.

       

      (p)           A
        complete list of all advance room reservations, functions and the like, in
        reasonable detail so as to enable the Acquirers to honor the Contributors’
commitments in that regard.

       

      (q)           A
        list of the Contributors’ outstanding accounts receivable as of midnight on the
        date prior to the Closing, specifying the name of each account and the amount
        due the Contributors.

       

      
        (r)           
          Possession of the Property and all keys for the Property.

         

      

      (s)           All
        books, records, operating reports, appraisal reports, files and other materials
        in the Contributors’ possession or control which are necessary in the Acquirers’
discretion to maintain continuity of operation of the Property.

       

      (t)           
        To the extent permitted under applicable law, documents of transfer necessary
        to
        transfer to the Acquirers the Contributors’ employment rating for workmens'
        compensation and state unemployment tax purposes.

       

      (u)           An
        assignment of all warranties and guarantees from all contractors and
        subcontractors, manufacturers, and suppliers in effect with respect to the
        Improvements.

       

      (v)           Complete
        set of “as-built” drawings for the Improvements as available in Contributors’
possession.

       

      (w)           Such
        proof, reasonably acceptable to the Acquirers evidencing the payment by
        Contributors of all transfer taxes incurred in connection with the transactions
        contemplated by this Agreement.

       

      
        (x)           
          The Joinder.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

      (y)           Any
        other document or instrument reasonably requested by the Acquirers or required
        hereby.

    

     

    6.3           Acquirers’
      Deliveries.  At Closing, the Acquirers shall pay or deliver to the
      Contributor the following:

     

    
      	
               

            	
              (a)

            	
              The
                Consideration described in
                Section 2.3.

            

    

     

    
      	
               

            	
              (b)

            	
              The
                Assignment and Assumption
                Agreement.

            

    

     

    
      	
               

            	
              (c)

            	
              The
                Joinder.

            

    

     

    (d)           Any
      other document or instrument reasonably requested by the Contributors or
      required hereby.

     

    6.4           Closing
      Costs.    Each party shall pay its own legal fees and
      expenses.  All filing fees, and recording or other similar taxes, and
      all charges for title insurance premiums shall be paid by
      Acquirers.  Any other costs or expenses shall be paid by
      Contributors.

    
       

      6.5   Income
        and Expense Allocations.

    

     

    
      	
               

            	
              (a)

            	
              Items
                to be Apportioned.  The following shall be prorated and
                apportioned between Contributors and the Acquirers as of 11:59:59
                P.M.
                (local Hotel time) on the Apportionment Date, except as otherwise
                expressly provided to the contrary
                below:

            

    

     

    
      	
               

            	
              (i)

            	
              Property
                Taxes.  Real estate taxes, ad valorem taxes, personal
                property taxes, special assessments, sewer rents and taxes, and any
                other
                governmental tax or charge levied or assessed against the Property
                (collectively, the “Property Taxes”), shall be apportioned on the basis of
                the respective periods for which each is assessed or
                imposed.  If the Closing Date shall occur either before an
                assessment is made or a tax rate is fixed for the tax period in which
                the
                Closing occurs, the apportionment of such Property Taxes shall be
                calculated on the basis of the prior year’s Property Taxes, but, after the
                assessment and tax rate for the current year are fixed, the apportionment
                thereof shall be recalculated and the Contributors or the Acquirers,
                as
                the case may be, shall promptly pay to the other the amount determined
                to
                be due based on such recalculation.

            

    

     

    
      
        	
                 

              	
                (ii)

              	
                Utilities. The
                  Utilities shall be apportioned (i) by having the utility companies
                  servicing the Property make final meter readings on the Apportionment
                  Date, the payment of which shall be the Contributors’ responsibility, or
                  (ii) if such readings cannot be obtained, on the basis of the most
                  recent
                  bills that are available, reasonably adjusted (if necessary) to
                  reflect
                  any changes in occupancy, temperature or other relevant variables
                  between
                  the respective periods covered by such bills and the most recent
                  relevant
                  at period, to the extent such changes would have a material impact
                  on the
                  amount of the estimated charges for the most recent period for
                  the utility
                  in question.  If the apportionment is not based on an actual
                  current reading, then, upon the taking of a subsequent actual reading,
                  or
                  upon receipt of a subsequent bill, such apportionment shall be
                  recalculated and the Contributors or the Acquirers, as the case
                  may be,
                  shall promptly pay to the other the amount determined to be due
                  upon such
                  recalculation.  The Acquirers shall reimburse the Contributors
                  for any outstanding utility deposits made by the
                  Contributors

              

      

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (iii)

            	
              Licenses.  All
                repaid fees or other charges for transferable licenses, if any, shall
                be
                apportioned on the basis of the fiscal period covered by such license,
                but
                all amounts refundable under unassigned or unassignable licenses
                shall
                remain the property of
                Contributors.

            

    

     

    
      	
               

            	
              (iv)

            	
              Service
                Contracts, Space Leases and Agreements.  Amounts paid or
                payable under any service contract, space lease and agreement, including
                but not limited to the Restaurant Lease shall be apportioned on the
                basis
                of the period covered by such
                payments.

            

    

     

    
      	
               

            	
              (v)

            	
              Revenues. All
                revenues from the rental of guestrooms and from food and beverage
                and
                other sales or services, net of applicable sales taxes and other
                governmental impositions (whether such revenues, sales taxes or other
                governmental impositions are collected or not) that are posted to
                a guest
                room account through 11:59:59 pm on the Apportionment Date shall
                be
                divided equally among the Contributors and the Acquirers.  After
                this time all revenues from the rental of guestrooms and from food
                and
                beverage and other sales or services posted to a guest room account
                shall
                belong to the Acquirers.  For purpose of these apportionments,
                the hotel personnel shall promptly post all charges as they are
                incurred.  Guestroom rental charges of those guests who check-in
                on the Apportionment Date shall be deemed incurred at
                check-in.  Revenues from any meeting room occupied, but vacated
                prior to midnight of the Apportionment Date shall belong to the
                Contributors.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Revenues
      from any meeting room that was not occupied until after this time shall belong
      to the Acquirers.  Revenues for any meeting room that was occupied by
      the same customer on both the Apportionment Date and the Closing Date shall
      be
      allocated between the Contributors and the Acquirers based on the number of
      hours on each such date that the room was occupied and unavailable for rental
      to
      other customers.

     

    
      	
               

            	
              (vi)

            	
              Sales
                Taxes.  All sales, use and occupancy taxes, if any, due or
                to become due in connection with revenues from the Hotel apportioned
                or
                allocated to the Contributors in accordance with Section 6.5(a)(iv)
                shall
                be paid by the Contributors, and all sales, use and occupancy taxes
                due or
                to become due in connection with revenues apportioned or allocated
                to the
                Acquirers in accordance with Section 6.5(a)(iv) shall be paid by
                the
                Acquirers.  The Contributors and the Acquirers shall each
                indemnify the other from and against any liability for unpaid sales,
                use
                or occupancy tax resulting from the indemnifying party’s failure to make
                the payments required under this Section
                6.5(a)(v).

            

    

     

    
      	
               

            	
              (b)

            	
              Receivables.  The
                Acquirers shall not purchase the book of accounts
                receivable.

            

    

     

    
      	
               

            	
              (c)

            	
              House
                Banks. The Acquirers shall purchase the petty cash funds and cashiers’
                banks, provided that the Acquirers shall only purchase cash on hand
                and
                shall in no event purchase any
                receipts.

            

    

     

    
      	
               

            	
              (d)

            	
              Employee
                Wages and Other Compensation.  On or before the Closing
                Date, The Contributors shall pay or cause to be paid (i) all unpaid
                wages
                or salaries (including any earned but unused vacation days accrued,
                irrespective of whether such vacation days are actually vested) of
                all
                persons employed at the Property; (ii) any employment taxes or government
                levies on item (i) above; and (iii) any retirement plan payments,
                medical
                insurance payments or other similar deductions.  Hereinafter,
                (i) through (iii) above shall be referred to as the “Contributors’
                Employee Payment.”  The Contributors shall be responsible for
                Contributors’ Employee Payment accruing through 11:59:59 pm on the
                Apportionment Date.  From that point forward, the Acquirers
                shall be responsible for these expenses for those persons who the
                Acquirers elect to employ.

            

    

     

    
      
        	
                 

              	
                (e)

              	
                Reconciliation
                  and Final Payment; Intent of Section.  The Contributors and
                  the Acquirers, shall cooperate after Closing to make a final determination
                  of the prorations and adjustments required hereunder as soon as
                  reasonably
                  practicable, but in no event later than ninety (90) days after
                  the Closing
                  Date (except with respect to any item which is not determinable
                  within
                  such time frame, as to which the time period shall be extended
                  until such
                  item is determinable).  Upon the final reconciliation of the
                  prorations and adjustments under this Section 6.5, the party which
                  owes
                  the other party any sums hereunder shall pay such party such sums
                  within
                  ten (10) days after the reconciliation thereof.  It is the
                  intent of the parties that all items herein which are subject to
                  apportionment shall, except as otherwise specifically provided
                  in Section
                  6.5, result in the Contributors receiving all of the economic benefits
                  and
                  burdens of the Hotel with respect to the period prior to the Closing
                  Date,
                  and the Acquirers receiving all of the economic benefits and burdens
                  of
                  the Hotel with respect to the period from and after the Closing
                  Date.

              

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (f)

            	
              Accounts
                Payable.  The Contributors shall retain and be responsible
                for the payment of all accounts payable and other debts and liabilities
                of
                the Contributors or otherwise relating to the Hotel, which have accrued
                prior to the Closing, whether or not invoiced (the “Accounts Payable”),
                except to the extent the Acquirers have received a credit for any
                such
                item under this Section 6.5 of this Agreement.  The parties
                acknowledge and agree that except as may be expressly set forth in
                this
                Agreement, the Acquirers are in no way assuming any responsibility
                for the
                payment of any Accounts Payable of the
                Contributors.

            

    

     

    
      	
               

            	
              (g)

            	
              Survival.  The
                provisions of this Section 6.5 shall survive the Closing for a period
                of
                six (6) months.

            

    

     

    6.6           Safes.  On
      the Closing Date Contributors shall cause the delivery to Acquirers of all
      of
      Contributors’ keys to all safes and safe deposit boxes (collectively, the
“safes”) at the Property.  On or prior to the Closing Date,
      Contributors shall give written notices to those persons who have deposited
      items in any central safes (excluding in-room safes), advising them of the
      sale
      of the Hotel to Acquirers and requesting the removal or verification of their
      contents in the safes on the Closing Date.  All such removals or
      verifications on the Closing Date shall be under the supervision of
      Contributors’ and Acquirers’ respective representatives.  All contents
      which are to remain in the safes shall be recorded.  Items belonging
      to guests who have not responded to such written notice by so removing or
      verifying their safe contents by the end of the day shall be recorded in the
      presence of the respective representatives.  Any such contents so
      verified or recorded and thereafter remaining in the hands of Acquirers shall
      be
      the responsibility of Acquirers and Acquirers hereby agree to indemnify, defend
      and hold Contributors harmless from any liability
      therefor.  Contributors hereby agree to indemnify and hold Acquirers
      harmless from any liability arising from claims by guests for any loss of
      contents in the safes not verified or recorded on the Closing
      Date.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    6.7           Completion
      of Conversion. On the Closing Date Contributors shall provide proof of
      completion of items identified in the Intercontinental Hotels Group Property
      Improvement Plan dated as of April 13, 2005, and in a Post Opening
      Visit/Extension Request letter from Intercontinental Hotels Group dated as
      of
      January 29, 2007 (collectively, the “PIP” and attached hereto as Exhibit
      L). If any items remain uncompleted, Acquirers shall have the right to
      require Contributors to place Two Hundred Thousand Dollars ($200,000.00) in
      escrow with Hersha Capital Corporation unless and until Contributors provide
      proof of completion to Acquirers in the form of acknowledgement by
      Intercontinental Hotels Group that the items identified in the PIP are
      complete.

     

    ARTICLE
      VII

     

    CONDEMNATION;
      RISK OF LOSS

     

    7.1           Condemnation.  In
      the event of any actual or threatened taking, pursuant to the power of eminent
      domain, of all or any portion of the Real Property, or any proposed sale in
      lieu
      thereof, the Contributors shall give written notice thereof to the Acquirers
      promptly after the Contributors learn or receive notice thereof.  If
      all or any part of the Real Property is, or is to be, so condemned or sold,
      the
      Acquirers shall have the right to terminate this Agreement pursuant to
Section 8.3.  If the Acquirers elect not to terminate this
      Agreement, all proceeds, awards and other payments arising out of such
      condemnation or sale (actual or threatened) shall be paid or assigned, as
      applicable, to the Acquirers at Closing.

     

    7.2           Risk
      of Loss.   The risk of any loss or damage to the Property
      prior to the recordation of the Deed shall remain upon
      Contributors.  If any such loss or damage to more than ten percent
      (10%) of the value of the Improvements occurs prior to Closing or any such
      loss
      or damage is uninsured or underinsured, the Acquirers shall have the right
      to
      terminate this Agreement pursuant to Section 8.3.  If the
      Acquirers elect not to terminate this Agreement, all insurance proceeds and
      rights to proceeds arising out of such loss or damage shall be paid or assigned,
      as applicable, to the Acquirers at Closing.

     

    ARTICLE
      VIII

     

    LIABILITY
      OF ACQUIRERS; INDEMNIFICATION BY CONTRIBUTORS;

    TERMINATION
      RIGHTS

     

    8.1           Liability
      of Acquirers.  Except for any obligation expressly assumed or
      agreed to be assumed by the Acquirers hereunder and in the Assignment and
      Assumption Agreement, the Acquirers do not assume any obligation of the
      Contributors or any liability for claims arising out of any occurrence prior
      to
      Closing.

     

    8.2           Indemnification
      by Contributors.  The Contributors hereby indemnify and hold the
      Acquirers harmless from and against any and all suits, actions, claims, costs,
      penalties, damages,
      losses, liabilities and expenses, subject to Section  9.11 that
      may at any time be incurred by the Acquirers, whether before or after Closing,
      (i) as a result of any breach by the Contributors of any of their
      representations, warranties, covenants or obligations set forth herein or in
      any
      other document delivered by the Contributors pursuant hereto, (ii) relating
      to
      any suits, litigation or actions brought against any Contributors or the LLC
      prior to the Closing Date, (iii) in connection with any and all liabilities
      and
      obligations of the LLC occurring, accruing or arising prior to the Closing
      Date,
      (iv) resulting from any default of the Contributors before and after the Closing
      Date and resulting from the change in ownership of the LLC under that certain
      Holiday Inn Hotel Conversion License Agreement by and between Holiday
      Hospitality Franchising, Inc. and the LLC, dated as of June 30, 2005, (v)
      resulting from the failure of Contributors to complete the PIP items to the
      satisfaction of Intercontinental Hotels Group, (vi) resulting from failure
      of
      the Contributors to notify and obtain consent from Holiday Hospitality
      Franchising, Inc., and/or (vii) as a result of or in connection with the use
      or
      operation of the Property prior to the Closing Date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.3           Termination
      by Acquirers.  If any condition set forth herein cannot or will
      not be satisfied prior to Closing, or upon the occurrence of any other event
      that would entitle the Acquirers to terminate this Agreement and its obligations
      hereunder, and the Contributors fail to cure any such matter within five days
      after notice thereof from the Acquirers, the Acquirers, at their option and
      as
      their sole remedy, shall elect either (a) to terminate this
      Agreement  and receive a refund of the entire Deposit, with interest,
      and all other rights and obligations of the Contributors and the Acquirers
      hereunder shall terminate immediately, or (b) to waive their right to
      terminate and, instead, to proceed to Closing.

     

    8.4           Termination
      by Contributor.  If, prior to Closing, the Acquirers default in
      performing any of their obligations under this Agreement, and the Acquirers
      fail
      to cure any such default within five (5) business days after notice thereof
      from
      the Contributors, then the Contributors’ sole remedy for such default shall be
      to terminate this Agreement.

     

    ARTICLE
      IX

     

    MISCELLANEOUS
      PROVISIONS

     

    9.1           Completeness;
      Modification.  This Agreement constitutes the entire agreement
      between the parties hereto with respect to the transactions contemplated hereby
      and supersedes all prior discussions, understandings, agreements and
      negotiations between the parties hereto.  This Agreement may be
      modified only by a written instrument duly executed by the parties
      hereto.

     

    9.2           Assignments.  The
      Acquirers may assign their rights hereunder to any affiliate of Acquirers
      without the consent of the Contributors.  No such assignment shall
      relieve the Acquirers of any of their obligations and liabilities
      hereunder.

     

    9.3           Successors
      and Assigns.  The benefits and burdens of this Agreement shall
      inure to the benefit of and bind the Acquirers and the Contributors and their
      respective party hereto.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    9.4           Days.  If
      any action is required to be performed, or if any notice, consent or other
      communication is given, on a day that is a Saturday or Sunday or a legal holiday
      in the jurisdiction in which the action is required to be performed or in which
      is located the intended recipient of such notice, consent or other
      communication, such performance shall be deemed to be required, and such notice,
      consent or other communication shall be deemed to be given, on the first
      business day following such Saturday, Sunday or legal holiday.  Unless
      otherwise specified herein, all references herein to a “day” or “days” shall
      refer to calendar days and not business days.

     

    9.5           Governing
      Law.  This Agreement and all documents referred to herein shall be
      governed by and construed and interpreted in accordance with the laws of the
      State of Connecticut.

     

    9.6           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.

     

    9.7           Severability.  If
      any term, covenant or condition of this Agreement, or the application thereof
      to
      any person or circumstance, shall to any extent be invalid or unenforceable,
      the
      remainder of this Agreement, or the application of such term, covenant or
      condition to other persons or circumstances, shall not be affected thereby,
      and
      each term, covenant or condition of this Agreement shall be valid and
      enforceable to the fullest extent permitted by law.

     

    9.8           Costs.  Regardless
      of whether Closing occurs hereunder, and except as otherwise expressly provided
      herein, each party hereto shall be responsible for its own costs in connection
      with this Agreement and the transactions contemplated hereby, including without
      limitation fees of attorneys, engineers and accountants.

     

    9.9           Notices.  All
      notices, requests, demands and other communications hereunder shall be in
      writing and shall be delivered by hand, transmitted by facsimile transmission,
      sent prepaid by Federal Express (or a comparable overnight delivery service)
      or
      sent by the United States mail, certified, postage prepaid, return receipt
      requested, at the addresses and with such copies as designated
      below.  Any notice, request, demand or other communication delivered
      or sent in the manner aforesaid shall be deemed given or made (as the case
      may
      be) when actually delivered to the intended recipient.

     

    
      	
              If
                to the Contributor:

            	
              Hersha
                Norwich Associates, LLC

            
	 	
              44
                Hersha Drive

            
	 	
              Harrisburg,
                PA 17102

            
	 	
              Phone:
                (717) 236-4400

            
	 	
              Fax:
                (717) 774-7383

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              Kirit
                Patel

            
	 	
              245
                Whiting Farms Road

            
	 	
              Holyoke,
                MA 01040

            
	 	 
	 	
              Ashwin
                Shah

            
	 	
              360
                Santure Road

            
	 	
              Monroe,
                MI 48162

            
	 	 
	 	
              K&D
                Investment Associates, L.L.C.

            
	 	
              398
                Santure Road

            
	 	
              Monroe,
                MI 48162

            
	 	 
	
              With
                a copy to:

            	
              Paul
                M. Maleck, Esq.

            
	 	
              Doherty,
                Wallace, Pillsbury and Murphy, P.C.

            
	 	
              One
                Monarch Place, Suite 1900

            
	 	
              Springfield,
                MA 01144

            
	 	
              Phone:
                (413) 733-3111

            
	 	
              Fax:
                (413) 734-3910

            
	 	 
	
              If
                to the Acquirer:

            	
              Hersha
                Hospitality Limited Partnership

            
	 	
              44
                Hersha Drive

            
	 	
              Harrisburg,
                PA 17102

            
	 	
              Phone:
                (717) 236-4400

            
	 	
              Fax:
                (717) 774-7383

            
	 	
              Attn:
                Ashish R. Parikh

            
	 	 
	
              With
                a copy to:

            	
              Lok
                Mohapatra, Esquire

            
	 	
              Franklin
                Firm, LLP

            
	 	
              Penn
                Mutual Towers

            
	 	
              510
                Walnut Street, 9th
                floor

            
	 	
              Philadelphia,
                PA  19106

            
	 	
              Phone:  (215)
                238-1045

            
	 	
              Fax:  (267)
                238-1874

            

    

     

    Or
      to
      such other address as the intended recipient may have specified in a notice
      to
      the other party.  Any party hereto may change its address or designate
      different or other persons or entities to receive copies by notifying the other
      party and the Escrow Agent in a manner described in this Section.

     

    9.10         Incorporation
      by Reference.  All of the exhibits attached hereto are by this
      reference incorporated herein and made a part hereof.

     

    9.11         Survival.  All
      of the representations, warranties, covenants and
      agreements of the Contributor and the Acquirer made in, or pursuant to, this
      Agreement shall survive for a period of twelve (12) months following Closing
      and
      shall not merge into the Deed or any other document
      or instrument executed and delivered in connection herewith, except for the
      representations and warranties set forth in Sections 3.4, 3.7 and 3.9, which
      shall survive for periods coterminous with applicable statutes of
      limitations.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    9.12         Further
      Assurances.  The Contributors and the Acquirers each covenant and
      agree to sign, execute and deliver, or cause to be signed, executed and
      delivered, and to do or make, or cause to be done or made, upon the written
      request of the other party, any and all agreements, instruments, papers, deeds,
      acts or things, supplemental, confirmatory or otherwise, as may be reasonably
      required by either party hereto for the purpose of or in connection with
      consummating the transactions described herein.

     

    9.13         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 Contributors and Acquirers
      specifically established hereby.

     

    9.14         Time
      of Essence.  Time is of the essence with respect to every
      provision hereof.

     

    9.15         Confidentiality.  Contributors
      and their representatives, including any professionals representing
      Contributors, shall keep the existence and terms of this Agreement strictly
      confidential, except to the extent disclosure is compelled by law, and then
      only
      to the extent of such compulsion.

     

    [The
      remainder of this page is left intentionally blank.]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Contributors and the Acquirers have caused this
      Agreement to be executed in their names by their respective duly-authorized
      representatives.

     

    

    
      	 	
              CONTRIBUTORS:

            
	 	 	 
	 	
              HERSHA
                NORWICH ASSOCIATES, LLC, a Delaware limited liability
                company

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	
              Name:
                Hasu P. Shah

            
	 	
              Title:
                Manager

            
	 	 	 
	 	
              KIRIT
                PATEL

            
	 	 	 
	 	 	 
	 	  
	 	
              Kirit
                Patel, an individual

            
	 	 	 
	 	
              ASHWIN
                SHAH

            
	 	 	 
	 	 	 
	 	  
	 	
              Ashwin
                Shah, an individual

            
	 	 	 
	 	
              K&D
                INVESTMENT ASSOCIATES, L.L.C., a Michigan limited liability
                company

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	
              Name:
                Kanti H. Shah

            
	 	
              Title:
                Manager

            

    

     

    
      
            

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	ACQUIRERS:
	 	 	 	 
	 	HERSHA
              HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited
              partnership
	 	
              By:

            	
              Hersha
                Hospitality trust, a Maryland business trust, its sole general
                partner

            
	 	 	 	 
	 	 	 	 
	 	 	
              By:

            	 
	 	 	
              Name:
                Ashish R. Parikh

            
	 	 	
              Title:
                CFO

            
	 	 	 	 
	 	44
              NORWICH MANAGER, LLC, a Delaware limited liability
              company
	 	 	 	 
	 	 	 	 
	 	
              By:

            	
               
                

            
	 	Name:
              Ashish R. Parikh
	 	Title:
              Managerex10_1.htm

    
      

    

    Exhibit
      10.1

    AMENDED
      AND RESTATED EMPLOYMENT AGREEMENT

    

    

    THIS
      AGREEMENT,
      effective June 28, 2007, is by and between HERSHA HOSPITALITY TRUST, a Maryland
      real estate investment trust (the Company), and HASU P. SHAH (the
“Executive”).

    

    WITNESSETH:

    

    WHEREAS,
      the Company and the Executive
      entered into an Employment Agreement effective as of January 21, 2005 as amended
      May 7, 2007 (the “Prior Agreement”); and

    

    WHEREAS,
      the Company and the Executive
      desire to amend and restate the Prior Agreement in certain respects and
      otherwise continue the terms and conditions of the Prior Agreement as set forth
      herein;

    

    NOW,
      THEREFORE, in consideration of the
      premises and mutual obligations hereinafter set forth the parties agree as
      follows:

    

    1.           Employment.  The
      Company shall employ the Executive, and the Executive agrees to be so employed,
      as the Chairman of the Company’s Board of Trustees on the terms set forth
      herein.

    

    2.           Term.  The
      term (the "Term") of the Executive’s employment hereunder shall commence on May
      7, 2007 and unless earlier terminated in accordance with the terms hereof,
      shall
      expire on December 31, 2008, if written notice of non-renewal is given not
      later than July 3, 2008 by either party to the other party, and if no such
      notice is given, this Agreement shall continue until terminated by either party
      upon not less than one hundred eighty (180) days’ prior notice to the other
      party setting forth the effective date of termination (which may be given as
      early as July 4, 2008).  Notwithstanding the foregoing,
      termination of this Agreement and any termination of the Executive’s employment
      hereunder shall be subject to the provisions of Sections 9, 10 and 11 of this
      Agreement.

    

    3.           Services.  The
      Executive shall devote such amount of his time and attention to the Company’s
      affairs as are necessary to perform his duties to the Company as determined
      by
      the Company's Board of Directors (the "Board").  The Executive shall
      have authority and responsibility with respect to the day-to-day operations
      and
      management of the Company and Hersha Hospitality Limited Partnership (the
      "Partnership"), for which the Company currently serves as sole general partner,
      and the Company’s other subsidiaries ("Subsidiary") (collectively "Affiliates"),
      as well as implementation of the long range growth strategy of the Company
      and
      Affiliates consistent with direction from the Board.

    

    4.           Compensation.

    

    (a)           During
      the Term, the Company shall pay the Executive for his services an initial annual
      base salary of one hundred fifty thousand dollars ($150,000.00), to be paid
      in
      accordance with the Company’s regular payroll procedures, subject to any
      increases approved by the Board.

    

    (b)           In
      addition to the base salary, the Executive may be entitled to receive other
      incentive compensation, including but not limited to, grants of stock options
      or
      shares of stock of the Company, which awards shall be made (if at all) in
      consideration of and as an incentive for services performed solely for the
      Company, in accordance with rules and criteria established by the Compensation
      Committee and approved by the Board.  Such criteria may include, but
      not be limited to, the growth in the Company’s net income per share, funds from
      operations per share or other performance goals.

    
      
        
        

        
        

      

      
        Page
          1 of
          10

        
          

        

      

      
        
        

      

    

    5.           [Intentionally
      Left Blank]

    

    6.            Expenses.  The
      Company recognizes that the Executive will have to incur certain out-of-pocket
      expenses, including but not limited to travel expenses, related to his services
      and the Company’s business and the Company agrees to reimburse the Executive for
      all reasonable expenses necessarily incurred by him in the performance of his
      duties upon presentation of a voucher or documentation indicating the amount
      and
      business purposes of any such expenses and in accordance with applicable rules
      of the Internal Revenue Service.  The documentation and expense
      reimbursement payment must be completed no later than March 15 of the calendar
      year following the calendar year in which the Executive incurred the
      expense.

    

    7.           [Intentionally
      Left Blank]

    

    8.           Definitions.  For
      purposes of this Agreement, the following terms shall have the following
      definitions:

    

    (a)           "Voluntary
      Termination" means, subject to the provisions of Section 11 hereof, the
      Executive’s voluntary termination of his employment hereunder, which may be
      effected by the Executive giving the Board not less than sixty (60) days’ prior
      written notice of the Executive’s desire to terminate his employment as of a
      specified date or the Executive’s failure to provide the services described in
      Section 3 hereof for a period greater than four consecutive weeks by reason
      of
      the Executive’s voluntary refusal to perform such services as determined by the
      Board.  Notwithstanding the foregoing, if the Executive gives notice
      of Voluntary Termination and, prior to the expiration of the notice period,
      the
      Executive voluntarily refuses or fails to provide the services described in
      Section 3 hereof for a period greater than two consecutive weeks, the Company
      may, in its discretion, accelerate the Voluntary Termination effective the
      date
      on which the Executive so ceases to carry out his duties as determined by the
      Board.  For purposes of this Section 8, voluntary refusal to perform
      services shall not include taking vacation otherwise permitted, the Executive’s
      failure to perform services on account of his illness or the illness of a member
      of his immediate family (provided such illness is adequately substantiated
      at
      the reasonable request of the Company), or any other absence from service with
      the written consent of the Board.  A Voluntary Termination shall not
      include the Executive’s resignation with Good Reason following a Change in
      Control (as defined below).

    

    (b)           "Termination
      Without Cause" means the termination of the Executive’s employment by the
      Company for any reason other than Voluntary Termination or Termination With
      Cause.

    

    (c)           "Termination
      With Cause" means the termination of the Executive’s employment by
      act of the Board for any of the following reasons:

    

    (i)           the
      Executive’s conviction of a felony;

    

    (ii)           the
      Executive’s theft, embezzlement, misappropriation of or intentional and
      malicious infliction of damage to the Company’s (or its subsidiaries’) property
      or business opportunity;

    

    (iii)           the
      Executive’s breach of the covenants in Section 12 hereof;

    
      
        
        

        
        

      

      
        Page
          2 of
          10

        
          

        

      

      
        
        

      

    

    (iv)           the
      Executive’s neglect of his duties or responsibilities hereunder or his failure
      or refusal to follow any written direction of the Board or any duly constituted
      committee thereof, which failure continues for a period of twenty (20) calendar
      days after Company provides Employee written notice (other than as a result
      of
      the Executive’s physical or mental inability to perform the services described
      in Section 3 above, which is addressed in Section 10 below); and

    

    (v)           the
      Executive’s abuse of alcohol, drugs or other substances, or his engaging in
      other deviant personal activities in a manner that, in the reasonable judgment
      of the Board, adversely affects the reputation, goodwill or business position
      of
      the Company.

    

    9.           Voluntary
      Termination; Termination With Cause.  If
      (i) the Executive shall cease being an employee of the Company on account of
      a
      Voluntary Termination or (ii) there shall be a Termination With Cause, the
      Executive shall not be entitled to any compensation after the effective date
      of
      such Voluntary Termination or Termination With Cause (except base salary and
      vacation accrued but unpaid on the effective date of such event).  In
      the event of a Voluntary Termination (which shall not include the Executive’s
      resignation for Good Reason following a Change in Control as defined by
      Paragraph 11), or Termination With Cause, the Executive shall continue to be
      subject to the covenants contained in Section 12 hereof.

    

    10.           Death
      or Disability; Termination Without
      Cause.

    

    (a)           Upon
      (i) the death of the Executive, or (ii) Disability of the Executive, this
      Agreement shall terminate and the Company shall continue to pay the Executive
      or
      his heirs, devisees, executors, legatees or personal representatives, as
      appropriate, the payments of the Executive’s base salary then in effect through
      the month following the month in which such event occurs plus vacation accrued
      but unpaid as of the termination date.  For purposes hereof, a
      "Disability" means the Executive's becoming permanently disabled within the
      meaning of the Company's long-term disability plan then in effect for, or
      applicable to, the Executive.  If the Company does not provide any
      such benefit, then at the request of the Company, the Executive shall promptly
      make himself available for an examination by a physician selected by the Company
      who is board certified in a practice area selected by the Company, and to follow
      the recommendation of such physician regarding further examination and
      testing.  The issue to be presented to the physician for determination
      is whether the Executive suffers from a mental or physical incapacity which
      materially inhibits or prevents him from carrying out the duties of his
      full-time employment as described herein, and, if so, whether such condition
      is
      more likely than not to exist for a period in excess of one hundred twenty
      (120)
      days.  The Executive intends for the Company to be treated as
      Executive would be with respect to his rights regarding the use and disclosure
      of his individually identifiable health information or other medical
      records.  This release authority applies to any information governed
      by the Health Insurance Portability and Accountability Act of 1996 (a/k/a
      HIPAA), 42 USC 1320d and 45 CFR 160-164 and authorizes:  any
      physician, health-care professional, dentist, health plan, hospital, clinic,
      laboratory, pharmacy or other covered health-care provider, any insurance
      company and the Medical Information Bureau Inc. or other health-care
      clearinghouse that has provided treatment or services to him, or that has paid
      for or is seeking payment from him for such services, to give, disclose and
      release to the Company, without restriction, all of his individually
      identifiable health information and medical records regarding any past, present
      or future medical or mental health condition, including all information relating
      to the diagnosis and treatment of HIV/AIDS, sexually transmitted diseases,
      mental illness, and drug or alcohol abuse.

    

    (b)          Upon
      a Termination Without Cause, the non-recruitment restrictions contained in
      Section 13(a)(iii) shall apply, except for a Termination Without Cause during
      the 12-month period following a Change of Control (as defined
      below).  In all other respects, upon a Termination Without Cause
      (other than a Termination Without Cause during the 12 month period following
      a
      Change of Control (as defined below), which shall be governed by the provisions
      of Section 11 below) this Agreement shall terminate and, subject to Section
      12
      below,  the Company shall make a lump sum payment to the Executive
      within ten (10) days after Termination Without Cause equal to the sum of the
      Executive’s accrued but unused vacation to the date of termination plus the
      amount of the Executive’s monthly base salary then in effect for the lesser of
      12 months or the number of months (including a fractional month) remaining
      in
      the Term.

    
      
        
        

        
        

      

      
        Page
          3 of
          10

        
          

        

      

      
        
        

      

    

    11.           Change
      of Control Compensation.

    

    (a)            Compensation.  In
      the event of a Termination Without Cause or the Executive’s resignation for Good
      Reason (as defined below) within 12 months following a Change of Control (as
      defined below), the Company shall (i) fully vest the Executive in any
      outstanding share awards and stock options that have not previously vested
      or
      become exercisable, (ii) pay the Executive any base salary and expenses
      reimbursable to the Executive by the Company, each through the date of the
      termination, (iii) pay a benefit (the “Change of Control Bonus”) equal to two
      (2) times the sum of (x) the Executive’s then annual base salary,
(y) the maximum annual bonus that the Executive could earn
      for the year
      that includes the date of termination (or if no maximum bonus amount has been
      set, the Executive’s target bonus for that year) and (z) the fair
      market value (determined as of the date of the Change of Control (as defined
      below)) of the share award(s) received by the Executive for the year that
      includes the date of termination (or if no share awards were made in that year,
      the next preceding year in which the Executive received a share award) and
      (iv)
      pay the insurance benefit described below.  Subject to Section 12
      below, the base salary, expense reimbursement and Change of Control Bonus shall
      be paid in one lump sum within ten days after the Executive’s Termination
      Without Cause of the Executive’s resignation for Good Reason.  In
      addition, the Company shall cause the Executive’s insurance benefits, as in
      effect immediately prior to the termination, to remain in effect for eighteen
      (18)  months following the date of termination upon the same terms,
      and at the same cost to the Executive, as in effect immediately prior to
      termination.  The Executive shall also receive payment of accrued but
      unused vacation to the date of termination.

    

    (b)           A
      "Change of Control", for purposes of this Agreement, shall be deemed to
      have occurred if, at any time during the Term, any of the following events
      occurs:

    

    (i)           any
      "person", as that term is used in Section 13(d) and Section 14(d)(2) of the
      Securities Exchange Act of 1934, as amended (the "Exchange Act"), becomes,
      is
      discovered to be, or files a report on Schedule 13D or 14D-1 (or any successor
      schedule, form or report) disclosing that such person is, a beneficial owner
      (as
      defined in Rule 13d-3 under the Exchange Act or any successor rule or
      regulation), directly or indirectly, of securities of the Company representing
      20% or more of the combined voting power of the Company’s then outstanding
      securities entitled to vote generally in the election of directors;

    

    (ii)           individuals
      who, as of the election to the Board of Directors of the Company, without the
      recommendation or approval of the incumbent Board of Directors constituting
      a
      majority of the numbers of directors of Company then in office;

    

    (iii)           the
      Company is merged, consolidated or reorganized into or with another corporation
      or other legal person, or securities of the Company are exchanged for securities
      of another corporation or other legal person, and immediately after such merger,
      consolidation, reorganization or exchange less than a majority of the combined
      voting power of the then-outstanding securities of such corporation or person
      immediately after such transaction are held, directly or indirectly, in the
      aggregate by the holders of securities entitled to vote generally in the
      election of directors of the Company immediately prior to such
      transaction;

    
      
        
        

        
        

      

      
        Page
          4 of
          10

        
          

        

      

      
        
        

      

    

    (iv)           the
      Company in any transaction or series of related transactions, sells all or
      substantially all of its assets to any other corporation or other legal person
      and less than a majority of the combined voting power of the then-outstanding
      securities of such corporation or person immediately after such sale or sales
      are held, directly or indirectly, in the aggregate by the holders of securities
      entitled to vote generally in the election of directors of the Company
      immediately prior to such sale;

    

    (v)           the
      Company and its affiliates shall sell or transfer of (in a single transaction
      or
      series of related transactions) to a non-affiliate business operations or assets
      that generated at least two-thirds of the consolidated revenues (determined
      on
      the basis of the Company’s four most recently completed fiscal quarters for
      which reports have been filed under the Exchange Act) of the Company and its
      subsidiaries immediately prior thereto;

    

    (vi)           the
      Company files a report or proxy statement with the Securities and Exchange
      Commission pursuant to the Exchange Act disclosing in response to Form 8-K
      (or
      any successor, form or report or item therein) that a change in control of
      the
      Company has occurred; or

    

    (vii)           any
      other transaction or series of related transactions occur that have
      substantially the effect of the transactions specified in any of the preceding
      clauses in this sentence.

    

    (c)           Certain
      Transactions.  Notwithstanding the provisions of Section 11(b)(i)
      or 11(b)(vi) hereof, unless otherwise determined in a specific case by majority
      vote of the Board of Directors of the Company, a Change of Control shall not
      be
      deemed to have occurred for purposes of this Agreement solely because (i) the
      Company, (ii) an entity in which the Company directly or indirectly beneficially
      owns 20% or more of the voting securities or (iii) any Company-sponsored
      employee stock ownership plan, or any other employee benefit plan of the
      Company, either files or becomes obligated to file a report or a proxy statement
      under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule
      14A
      (or any successor schedule, form or report or item thereon) under the Exchange
      Act, disclosing beneficial ownership by it of shares of stock of the Company,
      or
      because the Company reports that a Change of Control of the Company has or
      may
      have occurred or will or may occur in the future by reason of such beneficial
      ownership.

    

    (d)           Good
      Reason.  "Good Reason," for purposes of this Agreement, shall be
      deemed to mean any of the following:

    

    (i)           a
      change in the Executive’s position or responsibilities (including reporting
      responsibilities) which materially diminishes the Executive’s position or
      responsibilities as in effect immediately prior to a Change of Control; the
      assignment to the Executive of any duties or responsibilities which are
      materially inconsistent with such position or responsibilities; or any removal
      of the Executive from or failure to reappoint or reelect the Executive to any
      of
      such positions, except in connection with a Termination with Cause as defined
      in
      Section 8(c) as a result of the Executive’s death or Disability, or by Voluntary
      Termination;

    

    (ii)           a
      reduction (unless performance justified) in the Executive’s base salary bonus
      arrangement as in effect on the date hereof or as the same may be increased
      from
      time to time;

    

    (iii)           the
      Company’s requiring the Executive to be based at any place other than a location
      within a thirty-mile radius of Harrisburg, Pennsylvania or Philadelphia,
      Pennsylvania, except for reasonably required travel on the Company’s business
      which is not materially greater than such travel requirements prior to the
      Change of Control;

    
      
        
        

        
        

      

      
        Page
          5 of
          10

        
          

        

      

      
        
        

      

    

    (iv)           the
      failure by the Company to continue to provide the Executive with compensation
      and benefits provided for under this agreement or benefits substantially similar
      to those provided to the Executive under any of the employee benefit plans
      in
      which the Executive is or becomes a participant, or the taking of any action
      by
      the Company which would directly or indirectly materially reduce any of such
      benefits or deprive the Executive of any material fringe benefit enjoyed by
      the
      Executive at the time of the Change of Control;

    

    (v)           any
      material breach by the Company of any provision of this Agreement;
      or

    

    (vi)           the
      failure of the Company to obtain a satisfactory agreement from any successor
      or
      assign of the Company to assume and agree to perform this
      Agreement.

    

    (e)           Excise
      Tax Indemnification.  The Executive shall be entitled to a
      payment under this Section 11(e) if any payment or benefit provided under this
      Agreement or any other plan or agreement with the Company constitutes a
“parachute payment” (as defined in Section 280G(b)(2)(A) of the Internal Revenue
      Code of 1986 (the “Code”), but without regard to Code Section 280G(b)(2)(A)(ii))
      and the Executive incurs a liability under Code Section 4999.  The
      amount payable to the Executive under this Section 11(e) shall be the amount
      required to indemnify the Executive and hold him harmless from the application
      of Code Sections 280G and 4999 with respect to benefits, payments, accelerated
      vesting and exercisability and other rights under this Agreement or otherwise,
      and any income, employment, hospitalization, excise and other taxes attributable
      to the indemnification payment.  Except as required by Section 12, the
      benefit payable under this Section 11(e) shall be calculated and paid not later
      than the date (or extended filing date) on which the tax return reflecting
      liability for the Code Section 4999 excise tax is required to be filed with
      the
      Internal Revenue Service.  To the extent that any other plan or
      agreement requires that the Executive be indemnified and held harmless from
      the
      application of Code Sections 280G and 4999, any such indemnification and the
      amount required to be paid to the Executive under this Section 11(e) shall
      be
      coordinated so that such indemnification is paid only once and the Company’s
      obligations under this Section 11(e) shall be satisfied to the extent of any
      such other payment (and vice versa).  The Executive shall be entitled
      to the benefit described in this Section 11(e) without regard to whether he
      becomes entitled to receive the benefits described in Section
      11(a).

    

    12.            Section
      409A.  The Company and the Executive intend that the
      benefits and payments provided under this Agreement shall be exempt from the
      requirements of Section 409A of the Code (“Section
      409A”).  Notwithstanding that intent, if the Company determines that
      any benefit or payment under this Agreement is, or may reasonably be expected
      to
      be, subject to Section 409A, then such benefit shall be provided and such
      payment shall be made in a manner that complies with Section 409A and the
      regulations and other guidance issued pursuant to Section 409A.  By
      way of example, if the Company determines that the Change of Control Bonus
      is
      subject to Section 409A and that the Executive is a “specified employee” (as
      defined for purposes of Section 409A), then the payment of the Change of Control
      Bonus shall be postponed until the first day of the seventh month beginning
      after the Executive’s termination.  If any cash payment under this
      Agreement is postponed on account of the application of Section 409A, then
      such
      payment shall accrue interest at the applicable federal rate provided for in
      Section 7872(f)(2)(A) of the Code from the date that the payment is due under
      this Agreement (but for the requirements of Section 409A) until the date of
      payment.

    
      
        
        

        
        

      

      
        Page
          6 of
          10

        
          

        

      

      
        
        

      

    

    13.            Protection
      of Confidential Information; Noncompetition;
      Non-Recruitment

    

    (a)           Covenant.  The
      Executive acknowledges that his employment by the Company, will, throughout
      the
      Term, bring him into close contact with many confidential affairs of the
      company, including, without limitation, information about ownership of the
      company, customer lists, costs, profits, markets, sales, key personnel, pricing
      polices, and other business affairs and methods and other information not
      readily available to the public, and plans for future
      development.  The Executive further acknowledges that the services to
      be performed under this Agreement are of a special, unique, unusual,
      extraordinary and intellectual character.  In recognition of the
      foregoing, Executive covenants and agrees:

    

    (i)           the
      Executive shall use all reasonable efforts to protect the confidential matters
      of the Company and shall keep secret all such confidential matters, including
      without limitation, the terms and provisions of this Agreement, and shall not
      intentionally disclose such matters to anyone outside of the Company except
      as
      required in the performance of his duties under this Agreement, either during
      or
      after the Term, except with the Company’s written consent, provided
      that:  (1) Executive shall have no such obligation to the extent such
      matters are or become publicly known other than as a result of Executive’s
      breach of his obligations hereunder; (2) Executive may, after giving prompt
      written notice to the Company to the extent practicable under the circumstances,
      disclose such matters to the extent required by applicable laws or governmental
      regulations or judicial or regulatory proceedings; and (3) Executive may
      disclose the terms and provisions of this Agreement to his spouse and legal
      tax
      and financial advisors, provided however, they agree in writing to be bound
      by
      the confidentiality provisions hereof;

    

    (ii)           The
      Executive shall deliver promptly to the Company on termination of his employment
      by the Company, or at any other time the Company may so request, at the
      Company’s expense, all memoranda, notes, records, reports and other documents,
      and all copies thereof relating to the Company’s business, which Executive
      obtained while employed, or otherwise serving or acting on behalf of, the
      Company and which he may then possess or have under his control other than
      publicly available documents or documents related to the terms and conditions
      of
      Executive employment;

    

    (iii)           Non-Recruitment.  Independent
      of the foregoing provisions, the Executive agrees that, during the term of
      the
      Executive’s employment by the Company and for a period of twelve (12) months
      thereafter, except for a Termination without Cause during the 12 month period
      following a Change of Control or a Voluntary Termination for Good Reason during
      the 12 month period following a Change of Control, the Executive shall not,
      without the prior written consent of the Company:  (1) directly or
      indirectly, cause any person engaged or employed by the Company or any of its
      subsidiaries, (whether part-time or full-time and whether as an officer,
      employee, consultant, agent, adviser or independent contractor) to voluntarily
      leave the employ of or engagement with, the Company or any of its subsidiaries
      or to cease providing services to or on behalf of the Company or any of its
      subsidiaries, or (2) in any manner seek to engage or employ any such person
      (whether or not for compensation) as an officer, employee, consultant, agent,
      adviser or independent contractor for any person other than the Company or
      any
      of its subsidiaries (other than legal or accounting advisors).

    

    (b)           Noncompete.  The
      Executive expressly covenants and agrees that he will not directly or
      indirectly, without the prior written consent of the Board, at any time while
      employed by the Company and for a period of one year (plus the length of time
      that Executive is in violation of this provision) following the date of that
      Executive’s employment terminates (1) for cause (as defined in Section 8(c)) or
      (2) for voluntary termination (as defined by Section 8(a)), other than for
      Good
      Reason following a Change in Control (as defined in Section 11), enter into
      or
      engage generally in direct or indirect competition with the Company either
      as an
      individual on his own or as a partner or joint venture, or as a director,
      officer, shareholder, employee or agent for any person nor render any services
      to any person or entity that competes with the Company or any
      Affiliate.  For the purposes of this Section, the Executive or any
      person or entity shall be deemed to "compete" with the Company or any Affiliate
      if the Executive personally engages, owns or provides services to any entity
      engaged in the ownership or management of hospitality units located in the
      United States east of the Mississippi including but not limited to Ashford
      Hospitality Trust, Inc., Boykin Lodging Company, Equity Inns, Inc., Highland
      Hospitality Corp., Innkeepers USA Trust, LaSalle Hotel Properties and Winston
      Hotels, Inc.

    
      
        
        

        
        

      

      
        Page
          7 of
          10

        
          

        

      

      
        
        

      

    

    (c)           Specific
      Remedy — Injunctive Relief.  The parties agree that the
      restrictions outlined in Sections 13(a) and (b) are reasonable and necessary
      protections of the immediate interests of the Company and that the Company
      would
      not have entered into this Agreement without receiving additional consideration
      offered by Executive and binding himself to these restrictions.  In
      addition to such other rights and remedies as the Company may have at equity
      or
      in law with respect to any breach of this Agreement, if Executive commits a
      breach of any of the provisions of Section 13(a) or 13(b), the Company shall
      have the right and remedy to have such provision specifically enforced by any
      Court having equity jurisdiction, it being acknowledged and agreed that any
      such
      breach or threatened breach will cause irreparable injury to the Company and
      that monetary damages will not provide an adequate remedy to the
      Company.  In the event that, notwithstanding the foregoing, a
      restriction or any portion thereof, contained in Section 13(a) or 13(b) is
      deemed to be unreasonable by a court of competent jurisdiction, Executive and
      the Company agree that such restriction, or portion thereof, shall be modified
      in order to make it reasonable and shall be enforceable
      accordingly.

    

    (d)           Consideration.  The
      parties acknowledge the requirement that the currently employed Executive be
      provided good and valuable consideration for providing the restrictions set
      forth in Section 13(a) and 13(b).  Therefore, in consideration of the
      foregoing restrictions, the Company shall allow the Executive to participate
      in
      the Company’s long-term incentive program, the terms of which shall be
      separately specified and incorporated by reference herein.

    

    14.           Notices.  All
      notices or deliveries authorized or required pursuant to this Agreement shall
      be
      deemed to have been given when in writing and personally delivered or when
      deposited in the U.S. mail, certified, return receipt requested, postage
      prepaid, addressed to the parties at the following addresses or to such other
      addresses as either may designate in writing to the other party:

    

    

    
      	
              To
                the Company:

            	 	
              Hersha
                Hospitality Trust

            
	 	 	
              44
                Hersha Drive

            
	 	 	
              Harrisburg,
                PA 17102

            
	 	 	 
	
              To
                the Executive:

            	 	
              Hasu
                P. Shah

            
	 	 	 
	 	 	 
	 	 	 

    

    

    15.            Entire
      Agreement; Prior Agreement.  This
      Agreement contains the entire understanding between the parties hereto with
      respect to the subject matter hereof and shall not be modified in any manner
      except by instrument in writing signed, by or on behalf of the parties hereto;
      provided, however, that any amendment or termination of the covenant of
      noncompetition in Section 13 must be approved by a majority of the directors
      of
      the Company other than the Executive, if the Executive is then a director of
      the
      Company.  This Agreement shall be binding upon and inure to the
      benefit of the heirs, successors and assigns of the parties
      hereto.  This Agreement supersedes and replaces the Prior Agreement
      and the Prior Agreement shall have no further force or effect after the
      execution of this Agreement.

    
      
        
        

        
        

      

      
        Page
          8 of
          10

        
          

        

      

      
        
        

      

    

    16.           Arbitration.

    

    (a)           All
      disputes (except for those arising pursuant to Section 13) arising out of,
      relating to or concerning this Agreement, the breach of this Agreement, the
      employment of Executive, or the termination of Executive's employment shall
      be
      resolved pursuant to this Section 16.  This includes all claims or
      disputes whether arising in tort or contract and whether arising under statute
      or common law, including Title VII, the ADA, the ADEA, and all other federal
      and
      state employment statutes.  Any such dispute will be resolved by
      arbitration held in Harrisburg, Pennsylvania under the Employment Dispute rules
      of the American Arbitration Association.  This agreement to arbitrate
      will be specifically enforceable.

    

    (b)           Executive
      and Company agree that he or it must file any arbitration with the AAA and
      serve
      on the other party within sixty (60) days after the date on which the dispute
      arose.

    

    (c)           Subject
      to Section 16(e) below, each party shall bear its own expenses for arbitration,
      including attorney and witness fees and expenses, except that the fee of the
      arbitrator shall be borne solely by the Company.

    

    (d)           Upon
      a request for arbitration under this Agreement, the parties shall confer with
      each other for the purpose of attempting to select a single independent
      arbitrator.  In the event that the parties cannot agree to the
      selection of an arbitrator within thirty days of notice of arbitration, three
      (3) individuals shall serve as arbitrators in accordance with the Expedited
      Procedures of the Commercial Arbitration Rules of the American Arbitration
      Association.  One of the arbitrators shall be selected by Executive
      and another by Company.  The two arbitrators so selected shall select
      a third arbitrator.  The finding of a majority of the arbitrators
      shall be final and binding on the parties.  The agreement to arbitrate
      shall be specifically enforceable under applicable law in any court having
      jurisdiction.

    

    (e)           The
      prevailing party in connection with such arbitration shall be entitled to
      recover from the other party reasonable sums as attorney fees and expenses
      in
      connection with such action, except that the fee of the arbitrator shall be
      borne solely by the Company regardless of outcome.

    

    (f)           The
      arbitrators will have no authority to extend, modify, or suspend any of the
      terms of this Agreement.  The arbitrators will make the award in
      writing and shall accompany it with an opinion discussing the evidence and
      setting forth the reasons for the award.  The decision of the
      arbitrators within the scope of the submission will be final and binding on
      both
      parties, and any right to judicial action on any matter subject to arbitration
      hereunder is waived (unless otherwise required by applicable law), except suit
      to enforce this arbitration award and any rights to vacate or modify the
      arbitration award in accordance with the Uniform Arbitration Act as enacted
      in
      Pennsylvania.  The arbitrators shall have authority to award all
      relief provided for by such relevant laws at issue.  If the rules of
      the AAA differ from those of this Section, the provisions of this Agreement
      will
      control.

    

    17.           Applicable
      Law.  Except to the extent pre-empted by
      federal law, this Agreement shall be construed in accordance with the laws
      of
      the Commonwealth of Pennsylvania without regard to internal conflict of law
      principles and any litigation or legal action concerning this Agreement, not
      otherwise waived or subject to arbitration, shall be brought before a state
      or
      federal court of competent jurisdiction in Harrisburg,
      Pennsylvania.

    
      
        
        

        
        

      

      
        Page
          9 of
          10

        
          

        

      

      
        
        

      

    

    18.           Assignment.  The
      Executive acknowledges that his services are unique and
      personal.  Accordingly, the Executive may not assign his rights or
      delegate his duties or obligations under this Agreement.  The
      Company’s rights and obligations under this Agreement shall inure to the benefit
      of and shall be binding upon the Company’s successors and assigns.

    

    19.           Headings.  Headings
      in this Agreement are for convenience only and shall not be used to interpret
      or
      construe its provisions.

    

    IN
      WITNESS WHEREOF, the Parties hereto
      have executed this Amended and Restated Employment Agreement as of the date
      first set forth above.

     

     

    
      
        	 	
                HERSHA
                  HOSPITALITY TRUST 

              
	 	 	 
	 	 	 
	 	
                BY:

              	 
	 	 	
                Michael
                  A. Leven, Lead Trustee,

              
	 	 	
                Board
                  of Trustees

              
	 	 	 
	 	 	 
	 	
                EXECUTIVE 

              
	 	 	 
	 	  
	 	
                Hasu
                  P. Shah 

              

      

       

       

      Page
        10 of
        10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}]]