Document:

Exhibit 10.1.1

Exhibit 10.1

SIEBEL SYSTEMS, INC.

NONQUALIFIED DEFERRED COMPENSATION PLAN

           AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2005

	Purpose and Definitions. Siebel Systems, Inc. hereby amends and restates
this Siebel Systems, Inc. Nonqualified Deferred Compensation Plan. The Plan was established for the
purpose of providing the Company's eligible employees with a program for deferring compensation that
otherwise would be earned during employment.

It is intended that the Plan and its related Trust shall constitute an unfunded
deferred compensation arrangement for the benefit of a select group of management or highly
compensated employees of the Company and its subsidiaries for purposes of the federal income tax
laws, including Section 409A of the Code and ERISA, and all documents, agreements or instruments
made or given pursuant to the Plan shall be interpreted so as to effect such intent.

Capitalized terms used in this Plan shall be defined as follows:

A.    "401(k) Plan" means the Siebel Systems, Inc. 401(k) Salary Deferral Plan, as
it may be amended from time to time.

B.    "Account" means the bookkeeping Account established on behalf of a
Participant into which Deferred Compensation and Company Contributions, plus earnings and losses
thereon, are recorded. A separate bookkeeping Account shall be maintained for Deferred Compensation
related to Stock Awards.

C.    "Annual Stock Award Amount" means, with respect to a Participant for any one
Plan Year, the number of shares covered by unvested Stock Awards under any Company stock incentive
plan, deferred in accordance with Section 3.A of this Plan.

D.    "Base Pay" means a Participant's base salary without regard to bonuses,
commissions, and other incentive compensation or Stock Awards.

E.    "Board of Directors" means the Board of Directors of Siebel Systems,
Inc.

F.    "Change in Control Election" means the Participant election with respect to a
Change in Control permitted under Section 7.

G.    "Change in Control" means any event described in Section 7.

H.    "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

I.    "Company Contributions" means contributions to the Plan made by the Company,
if any, pursuant to Section 3.E.

J.    "Company" means Siebel Systems, Inc. and its affiliates.

K.    "Compensation Committee" means the Compensation Committee of the Board of
Directors of the Company.

L.    "Deduction Limitation" means the limitations on payment of an Account
described in Section 6.F.

M.    "Deferred Compensation" means the amount of Variable Pay, Base Pay or Stock
Awards, as applicable, that a Participant elects to defer into the Plan.

N.    "Disability" or "Disabled" means for Pre-2005 Deferrals that the Participant
has a mental or physical disability as determined by the Plan Committee in accordance with the
standards and procedures used for determining Disability under the Company's broad-based regular
long-term disability plan, if any, under which the Participant is a participant. At any time that
the Company does not maintain such a long-term disability plan, "Disabled" or "Disability" shall
mean the inability of a Participant, as determined by the Plan Committee, substantially to perform
such Participant's regular duties and responsibilities due to a medically determinable physical or
mental illness which has lasted, or can reasonably be expected to last, for a period of six (6)
consecutive months, but only to the extent that such definition does not violate the Americans with
Disabilities Act.

For Post-2005 Deferrals, "Disability" means that a Participant is (i) unable to
engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, or (ii) by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months, receiving income
replacement benefits for a period of not less than three (3) months under an accident and health
plan covering employees of the Company.

O.    "Election Form" means the form provided by the Plan Committee on which a
Participant may elect to defer his or her Base Pay, Variable Pay or Stock Awards for a Plan Year and
elect the time and form of distributions from the Plan.

P.    "ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

Q.    "Fixed Date Payout" means the in-service withdrawal permitted under Section
6.B.

R.    "Investment Funds" means the investment funds described under
Section 5.A.

S.    "Key Employee" means, for purposes of this Plan, and in accordance with
Section 409A of the Code, a key employee as defined in Section 416(i) of the Code, without regard to
paragraph (5) thereof, of a corporation any stock in which is publicly traded on an established
securities market or otherwise. 

T.    "New Employee" means an employee who first performs services for the Company
after the first day of a Plan Year, or for the first Plan Year, who first performs services for the
Company on or after January 1, 2003 and on or before August 31, 2004.

U.    "Normal Retirement Age" means the date on which the Participant attains
fifty-nine and one-half (591⁄2) years of age.

V.    "Participant" means each common-law employee on the United States payroll of
the Company who is designated by the Compensation Committee, in accordance with the Plan terms, as
an eligible employee who may elect to participate in the Plan.

W.    "Performance-Based Compensation" means compensation (including amounts
deferred under an Election Form, amounts deferred under the 401(k) Plan, or amounts deferred under a
cafeteria plan of the Company pursuant to Section 125 of the Code) that meets the requirements of
performance-based compensation specified in Section 409A(a)(4)(B)(iii) of the Code and regulations
promulgated thereunder. Performance-Based Compensation shall be designated as such by the Company
and must relate to services performed by the Participant during a designated incentive period of at
least twelve (12) months. 

X.    "Plan Committee" means the Plan Administrative Committee established under
Section 10.

Y.    "Plan" means this Siebel Systems, Inc. Nonqualified Deferred Compensation
Plan, as it may be amended from time to time.

Z.    "Plan Year" means the calendar year. The first Plan Year shall be the short
period from September 1, 2004 to December 31, 2004.

AA.    "Pre-2005 Deferrals" means the portion of the Participant's Account
determined as of December 31, 2004, the right to which is earned and vested as of December 31, 2004,
plus earnings and losses allocable to such amounts.

BB.    "Post-2005 Deferrals" means the portion of the Participant's Account other
than Pre-2005 Deferrals."

CC.    "Stock" means Siebel Systems, Inc. common stock, $.001 par value, or any
other equity securities of the Company designated by the Compensation Committee.

DD.    "Stock Award" means an unvested right to shares of Stock (whether in the form
of restricted stock, restricted stock units or otherwise) that has been designated by the
Compensation Committee, in its sole discretion, as eligible for deferral and awarded to the
Participant under any Company stock incentive Plan.

EE.    "Stock Award Account" means (i) the sum of the Participant's Annual Stock
Award Amounts, plus (ii) amounts allocated in accordance with all the applicable allocation
provisions of this Plan that relate to the Participant's Stock Award Account, less (iii) all
distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to
the Participant's Stock Award Account.

FF.    "Stock Award Amount" means, for any grant of a Stock Award, the number of
shares of Stock covered by such Stock Award deferred in accordance with Section 3.A of this Plan.

GG.    "Termination of Employment" means the termination of the Participant's
employment with the Company for any reason other than retirement at or following attainment of
Normal Retirement Age.

HH.    "Total Compensation" means a Participant's compensation for purposes of the
401(k) Plan, but without limitation under Section 401(a)(17) of the Code, including Base Pay and
Variable Pay, but excluding stock option earnings.

II.    "Trust" means the Siebel Systems, Inc. Nonqualified Deferred Compensation
Trust established in conjunction with this Plan.

JJ.    "Variable Pay" means a Participant's commissions and bonuses and any other
incentive compensation, excluding Stock Awards.

	Eligibility. Each common-law employee of the Company and its principal
subsidiaries who is on the United States payroll and who is designated by the Compensation Committee
as an eligible employee may participate in the Plan for a Plan Year. Such employee shall first be
eligible to participate in the Plan on the date the employee is first notified by the Committee of
that employee's eligibility.

An election to participate in the Plan shall be made by completing and filing the
Election Form described in Section 3.A. Unless otherwise determined by the Compensation Committee,
the following classes of employees may elect to be Participants in the Plan. 

A. Except as specified in Section 2.B below, employees on the United States
payroll of the Company whose Total Compensation in the immediately preceding calendar year (the
"look back year") was equal to or in excess of One Hundred Seventy-Five Thousand Dollars
($175,000);

B. With respect to New Employees, (i) for the year of hire, an employee whose
Base Pay on an annualized basis is at least One Hundred Fifty Thousand Dollars ($150,000) in his or
her year of hire and (ii) for the year following the year of hire, an employee whose Base Pay on an
annualized basis in the look back year was at least One Hundred Fifty Thousand Dollars
($150,000).

	Election to Defer Compensation. A Participant may elect to defer
receipt of a specified percentage, (i) from one percent (1%) to eighty percent (80%), of the
Participant's Base Pay, (ii) from one percent (1%) to one hundred percent (100%) of the
Participant's Variable Pay, and either (iii) zero percent (0%) or one hundred percent (100%) of each
of the Participant's Stock Awards. In determining the amount of Base Pay eligible for deferral under
this Plan, an amount of Base Pay must remain undeferred such that the Participant's contributions
under the 401(k) Plan, other premiums and contributions for benefits elected by the Participant
and/or required by the Company, as well as withholdings from pay for benefits, repayments to the
Company previously agreed to by the Participant, and taxes may be made. In determining the amount of
Variable Pay eligible for deferral under this Plan, an amount of Variable Pay must remain undeferred
such that any draws, or other repayments to the Company previously agreed to by the Participant, may
be made. The Company may adjust a Participant's deferral election in order to cause the election to
meet the requirements of this paragraph.

	Election Form. Each Participant may elect to defer receipt of his or
her Base Pay or Variable Pay, as applicable, by filing with the Company:

	For the first Plan Year, the Election Form provided by the Plan Committee at
any time on or before August 31, 2004, for Total Compensation to be paid for services rendered
after August 31, 2004;

	For subsequent Plan Years, the Election Form provided by the Plan Committee
at any time prior to December 31 preceding the first day of the relevant Plan Year with respect to
Base Pay or Variable Pay to be earned in such subsequent Plan Year;

	For New Employees, the Election Form provided by the Plan Committee within
thirty (30) days following the date the New Employee is notified in writing by the Compensation
Committee, or its designee, that the New Employee is eligible to participate in the Plan for Base
Pay or Variable Pay earned after the date the Election Form is filed with the Company.

	For Performance-Based Compensation, the Election Form provided by the Plan
Committee no later than six (6) months before the end of the performance period. 

	For Stock Awards, the Election Form provided by the Plan Committee at any
time prior to December 31 preceding the first day of the relevant Plan Year with respect to the
grant of the Stock Awards. Provided, however, that to the extent any Stock Award constitutes
Performance-Based Compensation, the Election Form provided by the Plan Committee must be filed with
the Company no later than six (6) months before the end of the performance period. An irrevocable
Election Form must be completed and signed by the Participant with respect to each Stock Award
Amount deferral. Stock Award Amounts shall be allocated to the Participant on the books of the
Company in connection with such an election at the time the Stock Award would otherwise vest under
the terms of the Company's stock incentive plan and applicable Stock Award agreement, but for the
election to defer. 

Notwithstanding the foregoing, in compliance with Notice 2005-1, with respect to
amounts deferred for the 2005 Plan Year under Election Forms that were filed on or before December
31, 2004, a Participant may elect to make a new election with respect to such previously deferred
amounts by filing a new Election Form with the Plan Committee. Such new Election Form must be filed
by the Participant on or before December 31, 2005.

Notwithstanding the foregoing, in compliance with Notice 2005-1, with respect to
deferrals that relate all or in part to services performed on or before December 31, 2005, the
election timing requirements specified in Section 3.A, above, will not be applicable to the timing
of any elections made on or before March 15, 2005, provided that the amounts to which
the deferral election relates have not been paid or become payable at the time of the deferral
election.

The Election Forms shall specify the form in which payments from the Plan shall
be paid to the Participant and, subject to the limitations of Section 6, the time at which such
payments shall commence. The elections shall be delivered to the Plan Committee, or its designee, in
such form as may be permitted by the Plan Committee, including electronic or telephonic
communication.

Furthermore, a Participant may specify on each Election Form a maximum deferral
dollar amount that may be deferred for the relevant tax year for either or both, or any, of Base Pay
and Variable Pay. By way of example, a Participant may elect to defer 30% of the Participant's Base
Pay for the 2006 calendar year, but not to exceed a maximum deferral amount from Base Pay of
$55,000, and 40% of Variable Pay, but not to exceed a maximum deferral amount from Variable Pay of
$30,000. A Participant may elect to defer only 100% of a Stock Award. 

	Effect of No Election to Defer. If a Participant makes no election to
defer Base Pay, Variable Pay, or Stock Awards under the Plan for a Plan Year, any Base Pay, or
Variable Pay that the Participant is entitled to receive for the Plan Year shall be paid to the
Participant at such time, in such manner and in such amounts as is consistent with the normal
payroll practices of the Company or as provided in the relevant incentive compensation plan or
commission program and any Stock Awards will be vested and/or distributed in accordance with the
incentive plan or program under which the Stock Award was initially awarded or granted.

	Leave of Absence. If a Participant is authorized by the Company for
any reason to take a paid leave of absence from the employment of the Company, the Participant shall
continue to be considered employed by the Company and the Deferred Compensation shall continue to be
withheld during such paid leave of absence in accordance with this Section 3. For purposes of
clarity, payment of short-term, long-term or state sponsored disability payments to a Participant do
not constitute a "paid leave of absence" for purposes of this Plan; however, any Company-paid
maternity benefit will constitute a "paid leave of absence" for purposes of this Plan.

If a Participant is authorized by the Company for any reason to take an unpaid
leave of absence from the employment of the Company, or if a Participant is on leave of absence as a
result of his or her Disability, the Participant shall continue to be considered employed by the
Company for purposes of this Plan and the Participant shall be excused from making deferrals from
the date the unpaid leave of absence begins until the earlier of the date the leave of absence
expires or the Participant returns to a paid employment status. Upon such expiration or return, as
the case may be, deferrals, if any, shall resume for the remaining portion of the Plan Year in which
the expiration or return occurs, based on the deferral election, if any, previously made by the
Participant for that Plan Year.

	Irrevocable Election to Defer. Following a Participant's filing of an
Election Form with the Company pursuant to Section 3.A above, such election to defer compensation
shall be irrevocable with respect to the Plan Year to which it relates, and the Participant shall
not be permitted to change such deferral election for the remainder of the Plan Year for which the
deferral election is in effect, except as otherwise set forth herein.

Notwithstanding the foregoing, for the 2005 Plan Year only, a Participant who
elected to participate in the Plan for the 2005 Plan Year by filing an Election Form with the
Committee on or before December 31, 2004, may elect (i) to terminate the Participant's participation
in the Plan for the 2005 Plan Year, or (ii) to cancel the previously made deferral election for the
2005 Plan Year. Such election to terminate participation in the Plan for the 2005 Plan Year or to
cancel a previously made election for the 2005 Plan Year shall be made by filing an Election Form
with the Committee on or before December 31, 2005. Any previously deferred amounts that are subject
to the elections provided under this paragraph shall be includable in the income of the Participant
for the Participant's 2005 calendar year, or, if later, in the taxable year in which the amounts are
earned and vested. 

	Company Contribution. The Company, in its sole discretion, may make
such contributions to the Accounts of Participants as the Company may determine. If the Company
elects to make Company Contributions for a Plan Year, such Company Contributions shall be in the
amount determined by the Board of Directors or the Compensation Committee for the relevant Plan Year
and shall be allocated to the Accounts of such Participants as shall be determined by the Company.
Nothing in this Section 3.E requires the Company to make Company Contributions for any Plan Year,
nor, if Company Contributions are made, to allocate such Company Contributions in an equal or
proportional manner among Participant Accounts. If Company Contributions are made by the Company,
such contributions shall be bookkeeping entries and shall not be subject to investment direction by
the Participant. The Company also reserves the right to impose a vesting schedule on any Company
Contribution made for any Plan Year. Company Contributions, if made, shall be subject to the same
terms, conditions and restrictions as apply to Deferred Compensation under this Plan except with
respect to investment direction. 

	Sources of Stock. If Stock is credited under the Plan in the Trust in
connection with a deferral of Stock Awards, the shares so credited shall be deemed to have
originated, and shall be counted against the number of shares reserved, under the employer plan,
program or arrangement that was the source of the original grant of the Stock Awards.

	Crediting of Deferred Compensation and Any Company Contributions. All
amounts of a Participant's Deferred Compensation pursuant to Section 3 and Company Contributions, if
any, made to the Plan on behalf of a Participant shall be credited to such Participant's Account and
may be contributed to the Trust. The Participant's Annual Stock Award Amounts shall be credited to
his or her Stock Award Account, no later than the close of business on the first business day after
the day on which the Stock Award to which it relates would have vested, but for the election to
defer.

Such Accounts shall be bookkeeping entries only and shall be credited with
earnings and losses in accordance with Section 5. Except as otherwise provided in Section 6, the
amount to be paid to a Participant from the Plan in accordance with Section 6 shall be an amount
equal to the balance of the Participant's Account at the time of payment.

	Investment of Deferred Compensation and Company Contributions.

	Investment Funds. The Investment Funds referred to in this Section 5
shall be selected by the Plan Committee and may (but need not) be the same Investment Funds in which
investments under the 401(k) Plan are invested. Any amounts held under this Plan shall be segregated
from the amounts held under the 401(k) Plan and shall be administered in accordance with the terms
and conditions of this Plan and shall not be administered under the terms and conditions of the
401(k) Plan.

Notwithstanding the foregoing, one of the Investment Funds provided under this
Plan shall be a Company Stock Deemed Fund, which shall be treated for Plan purposes as if it were a
mutual fund invested one hundred percent (100%) in shares of Stock, with any dividends deemed
reinvested in additional shares of Stock. 

As necessary or appropriate, the Plan Committee may, in its discretion,
discontinue, substitute or add an Investment Fund; provided however, that the Plan Committee may
never discontinue or substitute for the Company Stock Deemed Fund. 

Notwithstanding any provision of this Plan that may be construed to the contrary,
a Participant's Stock Award Account always must be allocated to the Company Stock Deemed Fund, may
never be reallocated to any other Investment Fund and must be distributed from the Plan in the form
of actual shares of Stock, with cash being distributed only for fractional shares.

	Investments. In accordance with and subject to the rules and
procedures that are established from time to time by the Plan Committee, in its sole discretion,
amounts shall be credited or debited to a Participant's Account in accordance with the following
rules:

	A Participant, in connection with his or her deferral election, shall elect
on the Election Form, one or more Investment Funds to be used to determine the additional amounts to
be credited (or charged, as the case may be) to his or her Account. The Participant also may, from
time to time, by submitting an Election Form to the Plan Committee, or its designee, change the
portion of his or her Account allocated to each Investment Fund. If an investment election is made
in accordance with the previous sentence, it shall become effective as soon as administratively
practicable and shall continue thereafter until changed in accordance with the previous sentence.
Changes may be made to investment elections at any time during the Plan Year. Any investment
election from a Participant under this Section 5 shall be delivered to the Plan Committee, or its
designee, in such form as permitted by the Plan Committee, including electronic or telephonic
communication.

	In making any election described in this Section 5, the Participant shall
specify, in increments of whole percentage points, the percentage of his or her Account to be
allocated to an Investment Fund. Such election may be made in any form permitted by the Plan
Committee, including electronic or telephonic communication.

	The investment results (either earnings or losses) to be credited to a
Participant's Account will be determined by the Plan Committee, in its sole discretion, based on the
actual performance of the Investment Funds. A Participant's Account shall be credited or debited as
frequently as is administratively feasible, but no less often than monthly, based on the performance
of each Investment Fund selected by the Participant, as determined by the Plan Committee in its sole
discretion. For purposes of determining such performance, the Investment Funds will be valued as of
the close of each business day that the New York Stock Exchange is open for trading.

	Notwithstanding any other provision of this Plan that may be interpreted to
the contrary, the Investment Funds are to be used for measurement purposes only, and a Participant's
election of any Investment Fund, the allocation to his or her Account thereto, the calculation of
additional amounts and the crediting or debiting of such amounts to a Participant's Account shall
not be considered or construed in any manner as an actual investment of his or her Account in any
such Investment Fund. In the event that the Company, in its sole discretion, decides to invest funds
in any or all of the Investment Funds, no Participant shall have any rights in or to such
investments themselves. Without limiting the foregoing, a Participant's Account shall at all times
be a bookkeeping entry only and shall not represent any investment made on his or her behalf by the
Company or the Trust; the Participant shall at all times remain an unsecured creditor of the
Company. The Company does not in any way guarantee any Participant's Account against loss or
depreciation, whether caused by poor investment performance, insolvency of a deemed investment or by
any other event or occurrence, nor does the Company guarantee that any Participant, other individual
or entity shall be entitled to any particular tax consequence with respect to the Plan or any credit
or payment hereunder.

	Payment of Deferred Compensation. A Participant shall elect, at the
time a Participant first files an Election Form with the Company, the form in which the
Participant's Account balance shall be paid and, subject to the limitations of this Section 6, the
date at which such distribution shall be made or commence. Except as further provided in this
paragraph, or in this Section 6 or in Section 7, the Participant's election of the date of
commencement of distribution or the form of distribution shall be irrevocable. Notwithstanding the
foregoing, a Participant may elect, by filing such form as prescribed by the Plan Committee, or its
designee, to change to a later date the distribution commencement date previously elected by the
Participant. 

With respect to Pre-2005 Deferrals, a change in distribution commencement date
shall be given effect by the Plan Committee only if the new distribution commencement date elected
by the Participant is in a subsequent Plan Year and is at least twelve (12) months subsequent to the
date the election change is filed by the Participant.

With respect to Post-2005 Deferrals, a change in the distribution commencement
date shall be given effect by the Plan Committee only if the election to change the distribution
commencement date (i) does not take effect until at least twelve (12) months after the date on which
the Election Form is filed with the Plan Committee, (ii) the first payment with respect to such
change in election is made is deferred for a period of not less than five (5) years after the date
such payment would otherwise have been made, and (iii) the election change, if it refers to a Fixed
Date Payout, must be made at least twelve (12) months prior to the date of such Fixed Date Payout
would otherwise have been made.

	Retirement or Termination of Employment. At such time as the
Participant's Termination of Employment occurs, the Participant's Account balance shall, except as
set forth below, be payable to the Participant in one lump sum commencing no later than sixty (60)
days following the Participant's Termination of Employment date. At such time as the Participant
terminates employment at or following attainment of Normal Retirement Age, the Participant's Account
balance shall be payable to the Participant in one lump sum or in up to five (5) annual installments
as elected by the Participant and commencing on the date elected by the Participant.

Notwithstanding the foregoing, distributions to a Key Employee as a result of
Termination of Employment, including Termination of Employment upon or following attainment of
Normal Retirement Age, whether the distribution is made in the form of a lump sum or installments,
shall not be made or the payments may not begin before the date which is six (6) months following
the date of the Termination of Employment, or, if earlier, the date of death of the Key Employee.

	In-Service Withdrawal. In connection with each annual Election Form, a
Participant may irrevocably elect to receive a future Fixed Date Payout from the Plan with respect
to deferrals and earnings attributable thereto for the Plan Year subject to the Election Form. A
different Fixed Date Payout may apply for different Election Forms. Subject to the Deduction
Limitation and the other terms and conditions of this Plan, the Fixed Date Payout elected shall be
paid out (or the payments shall begin) no earlier than three (3) years following January 1st of the
Plan Year next following the Plan Year in which the Participant elects the Fixed Date Payout. A
Participant shall elect to receive his or her Fixed Date Payout in a lump sum or in up to five (5)
annual installments. If a Participant does not elect to have his or her Fixed Date Payout paid in
installments, then such benefit shall be payable in a lump sum. The lump sum payment shall be made
or installments shall commence no later than sixty (60) days following the date elected for
commencement of the Fixed Date Payout. Any such payment made shall be subject to the Deduction
Limitation.

A Participant may modify the date on which any such Fixed Date Payout is to be
paid by submitting a new Election Form; provided that (i) for Pre-2005 Deferrals, any such
modification shall not be given effect by the Plan Committee unless such new Election Form is
submitted to and accepted by the Plan Committee at least thirteen (13) months prior to the scheduled
payout date of the distribution to be modified or revoked and any new payout date designated in such
form is at least two (2) years following the scheduled payout date of the distribution to be
deferred, and (ii) for Post-2005 Deferrals, any such modification shall not be given effect by the
Plan Committee unless such modification meets the requirements for an election change specified
above in this Section 6.

A Fixed Date Payout shall not be paid if it conflicts with another payment that
is due under the terms of this Plan as a result of the Participant's retirement, Termination of
Employment, unforeseeable emergency, death, Disability, or a Change in Control. Payments to be made
upon a Participant's retirement, Termination of Employment, unforeseeable emergency, death, or
Disability, or as a result of a Change in Control, shall take precedence over any Fixed Date
Payout.

	Unforeseeable Emergency and Financial Hardship Distribution. Upon
petition by the Participant (or the Participant's beneficiary), the Plan Committee may, in its sole
discretion, suspend any deferrals required to be made by the Participant and accelerate the payment
of all or any portion of the aggregate amount allocated to the Participant's Account in the event of
an unforeseeable emergency caused by an event beyond the control of the Participant (or the
Participant's beneficiary) that would result in severe financial hardship to the Participant (or the
Participant's beneficiary), but only to the extent of the amount necessary to meet such
unforeseeable emergency, including amounts necessary to pay taxes on the distributed
amount.

If, subject to the sole discretion of the Plan Committee, the Participant's
petition for the suspension and/or payout is approved, suspension of deferrals shall take effect
upon the date of approval and a payout in the form of a lump sum shall be made within sixty (60)
days following the date of approval. The payment of any amount under this Section 6.C shall be
subject to the Deduction Limitation. Once the payout is paid, the Participant shall not be eligible
to participate in the Plan for a period of six (6) months measured from the first day of the month
next following the month in which the payout is paid.

For purposes of this Plan, for Pre-2005 Deferrals, an unforeseeable emergency
shall mean an unanticipated emergency that is caused by an event beyond the control of the
Participant that would result in severe financial hardship to the Participant not covered by
insurance, liquidation of other assets (to the extent the liquidation itself will not cause severe
financial hardship) or cessation of deferrals under this Plan, resulting from (i) a sudden and
unexpected illness or accident of the Participant or a dependent (as defined in Section 152(a) of
the Code), (ii) a loss of the Participant's property due to casualty, or (iii) such other
extraordinary and unforeseeable circumstances arising as a result of events beyond the control of
the Participant, all as determined in the sole discretion of the Plan Committee.

For Post-2005 Deferrals, unforeseeable emergency shall mean severe financial
hardship to the Participant resulting from an illness or accident of the Participant, the
Participant's spouse, or a dependent (as described in Section 152(a) of the Code) of the
Participant, loss of the Participant's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of the Participant.

	Disability Payout. If the Participant should become Disabled before
receiving any or all of his or her Account balance, any such unpaid amount may be paid to the
Participant in one lump sum, in up to five (5) annual installments, or in such other payment form as
previously elected by the Participant.

	Haircut Provision. This Section 6.E shall apply only with respect to
Pre-2005 Deferrals. A Participant (or, after a Participant's death, his or her beneficiary) may
elect, at any time, to withdraw all or a portion of his or her Account, calculated as if a
Termination of Employment had occurred as of the day of the election, less a withdrawal penalty
equal to ten percent (10%) of the requested distribution amount (the net amount shall be referred to
as the "Withdrawal Amount"). This election can be made at any time. The Participant (or his or her
beneficiary) shall make this election by giving the Plan Committee such advance written notice of
the election in such form and at such time as determined from time to time by the Plan Committee.
The Participant (or his or her beneficiary) shall be paid the Withdrawal Amount in a lump sum within
sixty (60) days following his or her election. Once the Withdrawal Amount is paid, the Participant's
participation in the Plan shall cease and the Participant shall not be eligible to defer any amount
into the Plan for the remainder of the Plan Year during which the Withdrawal Amount is paid and the
entire subsequent Plan Year. The payment of this Withdrawal Amount shall be subject to the Deduction
Limitation, as defined in this Section 6. This Section 6.E shall not be effective for Post-2005
Deferrals.

	Deduction Limitation on Withdrawal and Payments. If the Company
determines in good faith that there is a reasonable likelihood that any amount paid to a Participant
for a taxable year of the Company would not be deductible by the Company solely by reason of the
limitation under Section 162(m) of the Code, then to the extent deemed necessary by the Company to
ensure that the entire amount of any distribution to the Participant pursuant to this Plan is
deductible, the Company may defer all or any portion of a distribution under this Plan. Any amounts
deferred pursuant to this limitation shall continue to be credited/debited with additional amounts
in accordance with Section 5. The amounts so deferred and amounts credited thereon shall be
distributed to the Participant or his or her beneficiary (in the event of the Participant's death)
at the earliest possible date, as determined by the Company in good faith, on which the
deductibility of compensation paid or payable to the Participant for the taxable year of the Company
during which the distribution is made will not be limited by Section 162(m) of the Code, or if
earlier, the date that is twenty-four (24) months following the date on which the distribution was
first distributable to the Participant pursuant to the provisions of this Plan.

	Payment in Event of Incompetency. Notwithstanding the foregoing, if
the Plan Committee finds that any person to whom any amount is payable under this Plan is unable to
care for his or her affairs because of illness or accident, then the Plan Committee may direct that
any payment due such person (unless a prior claim therefore has been made by a duly appointed legal
representative) or any part thereof, be paid or applied for the benefit of such person (or such
person's spouse, children or other dependents), to an institution maintaining or having custody of
such person, or any other person deemed by the Plan Committee to be a proper recipient on behalf of
such person otherwise entitled to payment, or any of them, in such manner and proportion as the Plan
Committee may deem proper. Any such payment shall be in complete discharge of the Company's
obligations under this Plan.

	Change in Form of Payment. For Pre-2005 Deferrals, a Participant may
file with the Plan Committee a change in the form of payment from lump sum to an installment form,
or from one installment period to a later installment period. Any such change shall be effective for
the Plan Year that begins at least six (6) months after the Plan Committee's receipt of an Election
Form indicating a change in payment method. Any such election to change a payment method shall be
disregarded if any distribution event occurs prior to the Plan Year for which the changed Election
Form would become effective. In such an event, the form of payment previously in effect, or required
by the distribution event, shall apply as if no change had been elected. 

For Post-2005 Deferrals, a change in the form of distribution shall be given
effect by the Plan Committee only if the election to change the form of distribution (i) does not
take effect until at least twelve (12) months after the date on which the Election Form is filed
with the Plan Committee, (ii) the first payment with respect to such change in election is made is
deferred for a period of not less than five (5) years after the date such payment would otherwise
have been made, and (iii) the election change, if it refers to a Fixed Date Payout, must be made at
least twelve (12) months prior to the date of such Fixed Date Payout would otherwise have been
made.

	Acceleration of Payments. Payments under the Plan may be accelerated
only upon the occurrence of an event specified in this Section 6.I.

	A payment may be accelerated if such payment is made to an alternate payee
pursuant to and following the receipt and qualification of a domestic relations order as defined in
Section 414(p) of the Code.

	A payment may be accelerated as may be necessary to comply with a certificate
of divestiture as defined in Section 1043(b)(2) of the Code.

	With respect to all deferrals under the Plan, a payment may be accelerated in
the event of a de minimis amount if

	the payment accompanies the termination of the entirety of the Participant's
interest in the Plan;

	the payment is made on of before the later of

	December 31 of the calendar year in which occurs the Participant's
Termination of Employment with the Company, or

	the date two and one half (2 1⁄2) months after the Participant's Termination of
Employment with the Company; 

	the amount of the payment is not greater than Ten Thousand Dollars ($10,000);
and

	the amount is paid in a lump sum.

	For Post-2005 Deferrals, a payment may be accelerated if the amount of the
payment is not greater than Ten Thousand Dollars ($10,000) and at the time the payment is made the
amount constitutes the Participant's entire interest under the Plan and the amount is distributed in
the form of a lump sum.

	A payment may be accelerated to the extent required to pay the Federal
Insurance Contributions Act tax imposed under Sections 3101 and 3121(v)(2) of the Code with respect
to compensation deferred under the Plan (the "FICA Amount"). Additionally, a payment may be
accelerated to pay the income tax on wages imposed under Section 3401 of the Code on the FICA Amount
and to pay the additional income tax at source on wages attributable to the pyramiding Section 3401
wages and taxes. The total payment under this Subsection (v) may not exceed the aggregate of the
FICA Amount and the income tax withholding related to the FICA Amount.

	Change in Control. Notwithstanding any other provision of this Plan,
the Participant may elect that upon a Change in Control, his or her Account under the Plan shall be
paid or retained as follows:

	Paid no later than sixty (60) days following the Change in Control in the
form of a lump sum payment of the Participant's Account; or

	Retained in the Plan and administered and distributed in accordance with the
terms of the Plan as in effect following the Change in Control.

For Pre-2005 Deferrals, the Change in Control Election provided in this Section 7
must be made in writing by the Participant and shall be effective only with respect to a Change in
Control that occurs more than six (6) whole calendar months following the month in which the written
Change in Control Election is provided to the Plan Committee by the Participant.

For Post-2005 deferrals, the Change in Control Election provided in this Section
7 must be made in writing by the Participant at the time the Participant files an Election Form with
the Company.

For purposes of this Plan and any related Trust, the term Change in Control means
any of the following events:

For Pre-2005 Deferrals:

	Any consolidation or merger of the Company with or into any other
corporation or corporations in which the stockholders of the Company immediately prior to the
consolidation or merger do not retain a majority of the voting power of the surviving
corporation;

	As a result of or in connection with any cash tender offer, exchange offer,
merger or other business combination, sale of assets or contested election, or combination of the
foregoing, if the persons who were Directors of the Company immediately prior to such event no
longer constitute a majority of the Company's Board of Directors;

	Any sale of all or substantially all of the assets of the Company;
or

	Any liquidation or dissolution of the Company.

For Post-2005 Deferrals:

	The date that any one person or persons acting as a group acquires
ownership of Employer stock constituting more than fifty percent (50%) of the total fair market
value or total voting power of the Employer;

	The date that any one person or persons acting as a group acquires (or has
acquired during the 12-month period ending on the date of the most recent acquisition by such person
or persons) ownership of the stock of the Employer possessing thirty-five percent (35%) or more of
the total voting power of the stock of the Employer; 

	The date that any one person or persons acting as a group acquires assets
from the Employer that have a total gross fair market value equal to or more than forty percent
(40%) of the total gross fair market value of all of the assets of the Employer immediately prior to
such acquisition; or

	The date that a majority of members of the Employer's Board is replaced
during any 12-month period by directors whose appointment or election is not endorsed by a majority
of the members of the Board prior to the date of the appointment or elections.

Payments under this Section 7 shall be subject to the Deduction Limitation.

	Payment to Beneficiary or Representative. If the Participant should
die before receiving payment of any or all of his or her Account, any such unpaid Account balance
shall be paid to the beneficiary last designated by the Participant (or, if no such beneficiary
shall survive the Participant or if no beneficiary has been designated, to the beneficiary
designated by the Participant under the 401(k) Plan, or if no such beneficiary shall survive the
Participant or if no such beneficiary has been designated under the 401(k) Plan, to the
Participant's estate). Such payments to a beneficiary shall be made in one lump sum or in up to five
(5) annual installments, as previously elected by the Participant.

Each Participant shall have the right, at any time, to designate any person or
persons as such Participant's beneficiary or beneficiaries (both primary and contingent). Each
beneficiary designation shall become effective only when filed in writing with the Plan Committee
during the Participant's lifetime on a form provided by the Plan Committee.

The filing of a new beneficiary designation form will cancel all beneficiary
designations previously filed pursuant to the Plan. The spouse of a married Participant domiciled in
a community property jurisdiction shall sign any designation of beneficiary or beneficiaries other
than the spouse and have that designation notarized.

If any distribution is due to a beneficiary and that beneficiary dies before
receiving the distribution, such distribution shall be paid to the estate of that beneficiary.

	Claims.

	Applications for Benefits and Inquiries. Any application for benefits,
inquiries about the Plan or inquiries about present or future rights under the Plan must be
submitted to the Plan Administrator in writing by an applicant (or his or her authorized
representative). The address of the Plan Administrator is:

Siebel Systems, Inc.

                  Attn: Sherri Hoff

                  2207 Bridgepointe Parkway

                  San Mateo, CA 94404

	Denial of Claims. In the event that any application for benefits is
denied in whole or in part, the Plan Administrator must provide the applicant with written or
electronic notice of the denial of the application, and of the applicant's right to review the
denial. Any electronic notice will comply with the regulations of the U.S. Department of Labor. The
notice of denial will be set forth in a manner designed to be understood by the applicant and will
include the following:

	the specific reason or reasons for the denial;

	references to the specific Plan provisions upon which the denial is
based;

	a description of any additional information or material that the Plan
Administrator needs to complete the review and an explanation of why such information or material is
necessary; and

	an explanation of the Plan's review procedures and the time limits applicable
to such procedures, including a statement of the applicant's right to bring a civil action under
Section 502(a) of ERISA following a denial on review of the claim, as described below.

This notice of denial will be given to the applicant within ninety (90) days
after the Plan Administrator receives the application, unless special circumstances require an
extension of time; in which case the Plan Administrator has up to an additional ninety (90) days for
processing the application. If an extension of time for processing is required, written notice of
the extension will be furnished to the applicant before the end of the initial ninety (90) day
period.

This notice of extension will describe the special circumstances necessitating
the additional time and the date by which the Plan Administrator is to render its decision on the
application.

	Request for a Review. Any person (or that person's representative) for
whom an application for benefits is denied, in whole or in part, may appeal the denial by submitting
a request for a review to the Plan Administrator within sixty (60) days after the application is
denied. A request for a review shall be in writing and shall be addressed to:

Siebel Systems, Inc.

                  Attn: Sherri Hoff

                  2207 Bridgepointe Parkway

                  San Mateo, CA 94404

A request for review must set forth all of the grounds on which it is based, all
facts in support of the request and any other matters that the applicant feels are pertinent. The
applicant (or his or her representative) shall have the opportunity to submit (or the Plan
Administrator may require the applicant to submit) written comments, documents, records and other
information relating to his or her claim. The applicant (or his or her representative) shall be
provided, upon request and free of charge, reasonable access to, and copies of, all documents,
records and other information relevant to his or her claim. The review shall take into Account all
comments, documents, records and other information submitted by the applicant (or his or her
representative) relating to the claim, without regard to whether such information was submitted or
considered in the initial benefit determination.

	Decision on Review. The Plan Administrator will act on each request
for review within sixty (60) days after receipt of the request, unless special circumstances require
an extension of time (not to exceed an additional sixty (60) days), for processing the request for a
review. If an extension for review is required, written notice of the extension will be furnished to
the applicant within the initial sixty (60) day period. This notice of extension will describe the
special circumstances necessitating the additional time and the date by which the Plan Administrator
is to render its decision on the review. The Plan Administrator will give prompt, written or
electronic notice of its decision to the applicant. Any electronic notice will comply with the
regulations of the U.S. Department of Labor. In the event that the Plan Administrator confirms the
denial of the application for benefits in whole or in part, the notice will set forth, in a manner
calculated to be understood by the applicant, the following:

	the specific reason or reasons for the denial;

	references to the specific Plan provisions upon which the denial is
based;

	a statement that the applicant is entitled to receive, upon request and free
of charge, reasonable access to, and copies of, all documents, records and other information
relevant to his or her claim; and

	a statement of the applicant's right to bring a civil action under Section
502(a) of ERISA.

	Rules and Procedures. The Plan Administrator will establish rules and
procedures, consistent with the Plan and with ERISA, as necessary and appropriate in carrying out
its responsibilities in reviewing benefit claims. The Plan Administrator may require an applicant
who wishes to submit additional information in connection with an appeal from the denial of benefits
to do so at the applicant's own expense.

	Exhaustion of Remedies. No legal action for benefits under the Plan
may be brought until the applicant (i) has submitted a written application for benefits in
accordance with the procedures described above, (ii) has been notified by the Plan Administrator
that the application is denied, (iii) has filed a written request for a review of the application in
accordance with the appeal procedure described above, and (iv) has been notified in writing that the
Plan Administrator has denied the appeal; provided, however, that legal action may be brought
if the Plan Administrator has not acted on the claim or the request for review within the applicable
time limits specified above. 

	Administration. The Plan shall be administered by the Plan Committee
which shall be appointed by the Board of Directors or by the Compensation Committee. The Plan
Committee shall have full power, discretion and authority to interpret, construe and administer this
Plan and any part hereof, and the Plan Committee's interpretation and construction thereof, and
actions hereunder, shall be binding and conclusive on all persons for all purposes. The Plan
Committee may employ legal counsel, consultants, actuaries and agents as it may deem desirable in
the administration of the Plan and may rely on the opinion of such counsel or the computations of
such consultant or other agent. The Plan Committee shall provide for the keeping of written minutes
of its actions hereunder.

	Expenses. Expenses related to the administration of this Plan,
including, as applicable, but not limited to, recordkeeping, trustee, accounting or legal fees,
shall be paid from the general assets of the Company including, if the Company so directs, from any
assets held in the Trust.

	Unsecured Funds. Payments may be paid in cash from the Trust, the
assets of which shall be considered to be the general funds of the Company. To the extent not paid
from the Trust, payments under this Plan shall be made from the general assets of the Company. No
other special or separate fund shall be established and no other segregation of assets shall be made
to assure the payment of any Participant's Account balance. The Participant shall have no right,
title or interest whatever in or to any investment which the Company may make to aid it in meeting
its obligations hereunder or to any assets of the Trust. Nothing contained in this Plan, and no
action taken pursuant to the Plan provisions, shall create or be construed to create a fiduciary
relationship between the Company and the Participant or any other person.

To the extent that any person acquires a right to receive payments from the
Company hereunder such right shall be no greater than the right of an unsecured creditor of the
Company. Rights to benefit payments under the Plan are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors
of the Participant or of the Participant's beneficiaries, except if the Plan Committee receives an
acceptable domestic relations order with respect to a Participant's Account under the Plan. For this
purpose, the term domestic relations order shall have the meaning given it in Section 414(p) of the
Code. It is the intention of the Company that the Plan be unfunded for tax purposes and for purposes
of Title I of ERISA.

	Other Benefits. This Plan shall be in addition to any rights of the
Participant under any other agreement with the Company, if any, and shall not affect or reduce any
benefit or compensation inuring to the Participant of a kind not expressly provided for in this
Plan.

	Withholding. The Company may withhold from a payment any federal,
state, or local taxes required by law to be withheld with respect to such payment. Federal, state,
or local taxes imposed with respect to additions to a Participant's Account shall be satisfied by
withholding from amounts otherwise payable by the Company to the Participant or, in the sole
discretion of the Plan Committee, by a reduction in the amount credited to such Participant's
Account.

For each Plan Year in which an Annual Stock Award Amount is being withheld from a
Participant, the Company shall withhold from that portion of a Participant's Base Pay or Incentive
Pay that is not being deferred, in a manner determined by the Company, the Participant's share of
federal or state employment taxes on such Annual Stock Award Amount. If necessary, the Plan
Committee may reduce the Annual Stock Award Amount in order to comply with this Section 14.

By electing to make a deferral under this Plan, the Participant authorizes any
required withholding from, at the Company's election, distributions of Stock, payroll and any other
amounts payable to the Participant, and the Participant otherwise agrees to make adequate provision
for any sums required to satisfy the federal, state, local and foreign tax withholding obligations
of the Company or of a subsidiary, if any, which arise in connection with payments from this Plan.
Unless the tax withholding obligations of the Company and/or any subsidiary are satisfied, the
Company shall have no obligation to make distributions under this Plan.

	Employment and Benefits Rights. Any benefit payable under this Plan
shall not be deemed compensation or other compensation for the purpose of computing benefits under
any employee benefit plan or other arrangement of the Company for the benefit of its employees
except to the extent otherwise provided in such plan or arrangement or required to comply with laws
applicable to such plan or arrangement. Neither this Plan nor any action taken hereunder shall be
construed as giving to any employee the right to be retained in the employ of the Company or as
affecting the right of the Company to dismiss any employee.

	Binding Effect: Nonassignability. This Plan shall be binding upon and
inure to the benefit of the Company and its successors and assigns and the Participant and the
Participant's designees and estate. Neither the Participant or the Participant's designees or estate
shall commute, encumber, sell or otherwise dispose of the right to receive the payments provided for
in this Plan, which payments and the rights thereto are expressly declared to be nontransferable and
nonassignable, except as provided in Section 12.

	Amendment, Termination. This Plan may be amended, suspended or
terminated, in whole or in part, by the Board of Directors, or the Compensation Committee, but no
such action shall retroactively impair or otherwise adversely affect the rights of any person to
benefits under this Plan that have accrued prior to the date of such action, as determined by the
Plan Committee.

The Board of Directors or the Compensation Committee may determine that a
Participant shall no longer be a Participant in the Plan. If the Board of Directors or the
Compensation Committee terminates a Participant's participation in the Plan, then the Board of
Directors or the Compensation Committee also shall determine if such Participant's benefits shall be
(i) paid to the Participant as soon as administratively feasible following such termination of
participation to the extent such payment would meet the requirements of Section 6.I(iii) or (iv), or
(ii) held in the Plan and paid in accordance with the most recent election of the Participant on
file with the Plan Committee or its designee.

Notwithstanding the foregoing, if there is a Change in Control and the successor
employer, by resolution of its board of directors, elects, within twelve (12) months following the
Change in Control, not to continue to sponsor the Plan, then the Plan shall terminate and the
Account balances, or remaining Account balances, of each Participant, whether such Participant is
receiving installment payments or not, shall be paid to the Participant in a single lump sum
payment. Such lump sum payment shall be made within sixty (60) days following the adoption of the
resolutions of the board of directors of the successor employer not to continue to sponsor the
Plan.

	Governing Law. Except to the extent preempted by applicable federal
law, this Plan shall be governed by the laws of the State of California as from time to time in
effect.

	Captions; Entire Agreement. The captions preceding the Sections hereof
have been inserted solely as a matter of convenience and in no way define or limit the scope or
intent of any provision hereof.

	Scrivener's Error. Notwithstanding any other provision of the Plan to
the contrary, if there is a scrivener's error in properly transcribing this Plan, it shall not be a
violation of the Plan terms to operate the Plan in accordance with its proper provisions, rather
than in accordance with the terms of the Plan, pending correction of the Plan through Plan
amendment. In addition, any provisions of the Plan improperly added as a result of scrivener's error
shall be considered null and void as of the date such error occurred.

	Compliance with Section 409A of the Code. This Plan is intended to
comply with the requirements of Section 409A of the Code and regulations and other guidance
thereunder. To the extent one or more provisions of this Plan do not comply with Section 409A of the
Code, such provision shall be amended as soon as administratively feasible to so
comply.

Executed on behalf of the Company, effective as of the date first written above.

Siebel Systems, Inc.

By: /s/Kenneth A. Goldman

    Name:Kenneth A. Goldman

   Title:SVP, Finance and Administration and Chief Financial Officer

APPENDIX A

DISABILITY CLAIMS PROCEDURES

The following claim procedures shall apply only for disability
benefits payable under the Plan. An Authorized Representative may act on a Participant's behalf in
pursuing a benefit claim or appeal of an Adverse Benefit Determination.

	Definitions.

	"Adverse Benefit Determination" means any of the following:

	a denial, reduction, or termination of a benefit by the Plan, or a failure of
the Plan to provide or make payment (in whole or in part) for a benefit; and

	a denial, reduction, or termination of a benefit by the Plan, or a failure of
the Plan to provide or make payment (in whole or in part) for a benefit resulting from the
application of any utilization review.

	"Authorized Representative" means an individual who is authorized to
represent a Participant or beneficiary with respect to any claims or appeals filed pursuant to these
procedures. Whether an individual is an Authorized Representative will be determined by the Claims
Administrator in accordance with reasonable procedures established by the Plan.

	"Claimant" means a Participant or beneficiary who has submitted a
claim for benefits in accordance with these Claims Procedures.

	"Health Care Professional" means a physician or other health care
professional who is licensed, accredited, or certified to perform specified health services
consistent with applicable state law. 

	"Relevant Records" means any document, record, or other information
that:

	the Claims Administrator relied upon in making a benefit determination for
the Claimant's claim;

	was submitted, considered, or generated in the course of making the benefit
determination for a claim, without regard to whether such document, record, or other information was
relied upon in making the benefit determination;

	demonstrates compliance with the administrative processes and safeguards
required pursuant to Department of Labor Regulations in making the benefit determination for a
claim; or

	constitutes a statement of policy or guidance with respect to the Plan
concerning the denied treatment option or benefit for a Claimant's diagnosis, without regard to
whether such advice or statement was relied upon in making the benefit determination.

	Claims Procedure- Disability Claims. In the case of a Disability
Claim, the Claims Administrator will notify the Claimant of the Plan's Adverse Benefit Determination
within a reasonable time, but not later than forty-five (45) days after the Plan receives the claim.
The Plan may extend this period for up to thirty (30) days, provided that the Claims Administrator
both (i) determines that such an extension is necessary due to matters beyond the control of the
Plan, and (ii) notifies the Claimant, prior to the expiration of the initial forty-five (45) day
period, of the circumstances requiring the extension of time and the date by which the Plan expects
to make a decision.

If, prior to the end of the first thirty (30) day extension period, the Claims
Administrator determines that, due to matters beyond the control of the Plan, a decision cannot be
rendered within the first thirty (30) day extension period, the period for making a determination
may be extended for an additional thirty (30) days. Such additional extension is permitted only if
(i) the Claims Administrator notifies the Claimant, prior to the end of the first thirty (30) day
extension, of the circumstances requiring the second thirty (30) day extension and (ii) the Claims
Administrator notifies the Claimant of the date the Plan expects to render the decision.

Any notice of extension will explain the standards on which the Claimant's
entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim, and
the additional information needed to resolve these issues. A Claimant will be given at least forty-
five (45) days to provide the requested information.

	Calculating Time Periods For Claims Procedure. The time within which a
benefit determination is required to be made will begin at the time a claim is filed in accordance
with these procedures, without regard to whether all the information necessary to make a benefit
determination accompanies the filing. In the event that the time within which a benefit
determination is required to be made is extended due to the Claimant's failure to submit information
necessary to decide a claim, the period for making the benefit determination will be suspended from
the date on which the Claims Administrator sends the notification of extension to the Claimant until
the date on which the Claimant responds to the request for additional information.

	Notice of Benefit Determination. The Claims Administrator will provide
the Claimant with written or electronic notification of any Adverse Benefit Determination. If the
notice of an Adverse Benefit Determination is provided electronically, such notice will comply with
the standards imposed by the Department of Labor Regulations.

Any notice of Adverse Benefit Determination will set forth, in a manner
calculated to be understood by the Claimant:

	the specific reason or reasons for the Adverse Benefit
Determination;

	references to the specific Plan provisions on which the Adverse Benefit
Determination is based;

	a description of any additional material or information necessary for the
Claimant to perfect the claim and an explanation of why such material or information is
necessary;

	a description of the Plan's review procedures and the time limits applicable
to such procedures, including a statement of the Claimant's right to bring a civil action under
Section 502(a) of ERISA following an Adverse Benefit Determination on review; and

	if an internal rule, guideline, protocol, or other similar criterion was
relied upon in making the Adverse Benefit Determination, either (i) the specific rule, guideline,
protocol, or other similar criterion, or (ii) a statement that such a rule, guideline, protocol, or
other similar criterion was relied upon in making the Adverse Benefit Determination and that a copy
of such rule, guideline, protocol, or other criterion will be provided free of charge to the
Claimant upon request.

	Review Procedure. If the Claimant receives an Adverse Benefit
Determination, the Claimant may appeal the Adverse Benefit Determination within one hundred eighty
(180) days after the Claimant's receipt of the notice of Adverse Benefit Determination. The Claimant
must make any appeal in writing. The appeal must be addressed to the Review Panel of the Claims
Administrator.

During the one hundred eighty (180) day period, the Claimant may:

	submit written comments, documents, records, and other information relating
to the claim for benefits; and

	request and receive, free of charge, reasonable access to, and copies of, all
Relevant Records.

The Review Panel shall consist of one or more individuals who are neither the
individuals who made the initial Adverse Benefit Determination, nor the subordinate of any of such
individuals. The review of the Claimant's appeal will not give deference to the initial Adverse
Benefit Determination. The review will take into account all comments, documents, records, and other
information that the Claimant submits relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit determination.

In deciding the appeal of an Adverse Benefit Determination that is based in whole
or in part on a medical judgment, the Review Panel will consult with a health care professional who
has appropriate training and experience in the field of medicine involved in the medical judgment.
Such health care professional must be an individual who is neither the individual who was consulted
in connection with the initial Adverse Benefit Determination, nor the subordinate of such
individual. 

The Review Panel will provide the Claimant with the identification of medical or
vocational experts whose advice was obtained on behalf of the Plan in connection with the Claimant's
Adverse Benefit Determination, without regard to whether the advice was relied upon in making the
benefit determination. 

	Timing of Notice of Benefit Determination on Review. In the case of a
Disability Claim, the Claims Administrator will notify the Claimant of the Plan's benefit
determination on review within a reasonable period, but not later than forty-five (45) days after
the Plan receives the Claimant's request for review of an Adverse Benefit Determination. The Claims
Administrator may extend this period for up to an additional forty-five (45) days if the Claims
Administrator determines that special circumstances exist, such as the need to hold a
hearing.

If the Claims Administrator determines that an extension is required, the Claims
Administrator will provide the Claimant written notice of the extension before the end of the
initial forty-five (45) day period. The extension notice will describe the special circumstances
requiring the extension and the date by which the Plan expects to make a decision on the Claimant's
appeal.

	Calculating Time Periods for Review Procedure. The period of time
within which a benefit determination on review is required to be made shall begin at the time an
appeal is filed in accordance with subsection (e), without regard to whether all the information
necessary to make a benefit determination on review accompanies the filing.

	Notice of Benefit Determination on Review. The Claims Administrator
will provide the Claimant with written or electronic notification of the Plan's benefit
determination on review. Any electronic notification shall comply with the Department of Labor
Regulations.

In the case of an Adverse Benefit Determination, the notification will set forth,
in a manner calculated to be understood by the Claimant:

	the specific reason or reasons for the Adverse Benefit
Determination;

	reference to the specific Plan provisions on which the benefit determination
is based;

	a statement that the Claimant is entitled to receive, upon request and free
of charge, reasonable access to, and copies of, all Relevant Records;

	a statement of the Claimant's right to bring an action under Section 502(a)
of ERISA;

	if an internal rule, guideline, protocol, or other similar criterion was
relied upon in making the Adverse Benefit Determination, either the specific rule, guideline,
protocol, or other similar criterion, or a statement that such rule, guideline, protocol, or other
similar criterion was relied upon in making the Adverse Benefit Determination and that a copy of the
rule, guideline, protocol, or other similar criterion will be provided free of charge to the
Claimant upon request; and

	the following statement: "You and your plan may have other voluntary
alternative dispute resolution options, such as mediation. One way to find out what may be available
is to contact the local U.S. Department of Labor Office and your State insurance regulatory
agency."================================================================================
                                                                    Exhibit 10.1

                            LLC MEMBERSHIP INTERESTS

                               PURCHASE AGREEMENT

                          dated as of February __, 2005

                                     between

                                PUSHPA H. THAKKAR

                                 BHARTI D. DESAI

                                MALAY H. THAKKAR

                                 KUSH H. THAKKAR

                                  NEEL D. DESAI

                                 TEJAL D. DESAI

                                   as Sellers,

                                       and

                     HERSHA HOSPITALITY LIMITED PARTNERSHIP

                                  as Purchaser

                  IN CONNECTION WITH THE SALE AND PURCHASE OF
      MEMBERSHIP INTERESTS IN LTD ASSOCIATES ONE, LLC, OWNER OF SPRINGHILL
                  SUITES WILLIAMSBURG, WILLIAMSBURG, VIRGINIA

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

<PAGE>
                   LLC MEMBERSHIP INTERESTS PURCHASE AGREEMENT
                   -------------------------------------------

     THIS  LLC  MEMBERSHIP  INTERESTS PURCHASE AGREEMENT, dated as of the ______
day  of  February,  2005, (the "Agreement") between PUSHPA H. THAKKAR, BHARTI D.
DESAI,  MALAY  H.  THAKKAR,  KUSH  H. THAKKAR, NEEL D. DESAI and TEJAL D. DESAI,
members  of  LTD  Associates  One,  LLC,  on  the one hand (collectively, each a
"Sellers,  and  collectively,  the  "Sellers"),  and  HERSHA HOSPITALITY LIMITED
PARTNERSHIP,  a  Virginia  limited  partnership  (the  "Purchaser"),  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 member or
           -------------------
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.

          "Articles  of Organization" shall mean the Articles of Organization of
           -------------------------
the  LLC  filed  with the Commonwealth of Virginia State Corporation Commission,
true and correct copies of which are attached hereto as Exhibit F.
                                                        ---------

          "Assignment  and  Assumption  Agreement"  shall  mean  any  and  all
           --------------------------------------
Assignment  and  Assumption  Agreements,  dated  as  of  the Closing Date by and
between  Sellers  and  Purchaser.

<PAGE>
          "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 sale and purchase of the
           -------
Interests pursuant to this Agreement.

          "Closing  Date"  shall  mean  the  date  on  which the Closing occurs.
           -------------

          "Consideration"  shall  be  determined  by subtracting the outstanding
           -------------
principal  balance  of  the  Existing  Financing  as  of  Closing  from  the LLC
Valuation,  and  multiplying  the  balance  by  75%

          "Continuing  Liabilities"  shall include liabilities arising under the
           -----------------------
Existing  Financing  (defined  in  Section  3.10)  and  the Operating Agreements
(defined  hereafter) on and subsequent to the Closing Date, or proration credits
at  Closing,  but  shall  exclude  any  liabilities  arising  from  any  other
arrangement,  agreement, loan agreements, hotel management agreement, or pending
litigation.

          "Contributed  Equity"  shall  mean  the  equity contribution that each
           -------------------
party  shall  be  deemed  to  have  made  on the Closing Date and throughout the
investment  period.  As  a  matter  of  example,  Purchaser's  preferred  equity
contribution shall include the Consideration and Purchaser's contribution toward
the  FF&E reserve and any other additional contribution made on the Closing Date
and  throughout  the  investment  period.

          "Deposit"  shall  mean  the  amount of Two Hundred Thousand and No/100
           -------
($200,000.00)  Dollars.

          "Employment  Agreements" shall mean any and all employment agreements,
           ----------------------
written  or oral, between the LLC 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 Equity Title Company, with an address of 200
           ------------
Golden Oak Court, Suite 100A, Virginia Beach, VA 23452.

          "Existing Financing" shall have the meaning set forth in Section 3.10.
           ------------------

          "FIRPTA  Certificate"  shall  mean  the affidavit of the Sellers under
           -------------------
Section 1445 of the Internal Revenue Code certifying that such Sellers 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 Purchaser for each Seller who is not a foreign corporation,
foreign  partnership,  foreign limited liability company, foreign trust, foreign
estate  or  foreign  person.

                                        2
<PAGE>
          "Governmental  Body" shall mean any federal, state, municipal or other
           ------------------
governmental  department,  commission, board, bureau, agency or instrumentality,
domestic  or  foreign.

          "Gross  Revenues"  shall mean all room revenues from Hotel operations,
           ---------------
including,  but  not limited to, room revenues, revenues from food and beverage,
revenues  from  telecommunication  service,  and  revenues  from  other operated
departments,  rentals,  and  other  business  activities.

          "Hotel"  shall  mean the 120-room SpringHill Suites Williamsburg 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  Sellers and used in connection with the
ownership,  operation,  leasing,  occupancy  or  maintenance  of  the  Property,
including, without limitation, the Authorizations, general intangibles, business
records,  plans  and  specifications,  surveys  and  title  insurance  policies
pertaining  to  the  real property and the personal property, all other licenses
which  are transferable, 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.

          "Interests"  shall  mean  75%  of all right, title and interest in the
           ---------
Pushpa  Interest, Bharti Interest, Malay Interest, Kush Interest, Neel Interest,
and  Tejal  Interest,  consisting,  in the aggregate, of a 75% limited liability
company  interest  in  the  LLC.

          "Pushpa  Interest"  shall mean all right, title and interest of Pushpa
           ----------------
H.  Thakkar  in  the  LLC, consisting of a 10% limited liability interest in the
LLC.

          "Bharti  Interest"  shall mean all right, title and interest of Bharti
           ----------------
D.  Desai in the LLC, consisting of a 10% limited liability interest in the LLC.

          "Malay  Interest" shall mean all right, title and interest of Malay H.
           ---------------
Thakkar  in  the LLC, consisting of a 20% limited liability interest in the LLC.

          "Kush  Interest"  shall  mean all right, title and interest of Kush H.
           --------------
Thakkar  in  the LLC, consisting of a 20% limited liability interest in the LLC.

          "Neel  Interest"  shall  mean all right, title and interest of Neel D.
           --------------
Desai  in  the  LLC,  consisting of a 20% limited liability interest in the LLC.

                                        3
<PAGE>
          "Tejal  Interest" shall mean all right, title and interest of Tejal D.
          ----------------
Desai  in  the  LLC,  consisting of a 20% limited liability interest in the LLC.

          "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.

          "Knowledge"  shall mean the actual knowledge of the Sellers.
           ---------

          "Land"  shall  mean that certain parcel of real estate lying and being
           ----
in  the  City  of Williamsburg, Virginia, with an address of 1644 Richmond Road,
Williamsburg,  VA  23185,  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 Sellers
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.

          "LLC" shall mean LTD Associates One, LLC, a Virginia limited liability
           ---
company that owns, as its only assets, land and hotel improvements consisting of
a  120-room SpringHill Suites Williamsburg situated in the City of Williamsburg,
Virginia.

          "LLC  Operating Agreement" shall mean the current operating agreement,
           ------------------------
and  any  amendments  and  modifications thereto, of the LLC, a true and correct
copy  of  which  is  attached  hereto  as  Exhibit  D.
                                           ----------

          "LLC  Valuation"  shall  mean a valuation of $14,500,000.00 for all of
           --------------
the  LLC  including  the  Hotel, Intangible Personal Property, Tangible Personal
Property,  and Real Property, and any other assets in connection with the Hotel.

          "Operating  Agreements"  shall mean the management agreements, service
           ---------------------
contracts,  supply  contracts,  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
           --------------------
or  the  applicable  endorsement  issued to the LLC, pursuant to which the LLC's
ownership  of  fee  simple  title to the Real Property is insured (including the
marketability  thereof) subject only to Permitted Title Exceptions.  The Owner's
Title Policy shall be acceptable in form and substance to the Purchaser, and, in
the  event  such Owner's Title Policy is not acceptable to Purchaser, Purchaser,
at  its  sole  discretion, may obtain a new owner's policy of title insurance at
its  own  cost  and  expense.  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  Sellers  to

                                        4
<PAGE>
the  Purchaser.

          "Permitted  Title  Exceptions" shall mean those exceptions to title to
           ----------------------------
the  Real Property that are satisfactory to the Purchaser 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 Sellers' Reservation Terminal and
           -------------------
Reservation  System  equipment  and  software  (other  than  the  LTD Management
proprietary  system),  if  any.

          "Study  Period"  shall  mean the period commencing at 9:00 a.m. on the
           -------------
date hereof, and continuing through 5:00 p.m. on March 15, 2005.

          "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 Sellers and/or
the  LLC.

          "Title Company" shall  mean  All American Abstract Company, Inc., with
           -------------
an address at 1260 Valley Forge Road, Suite 111, Phoenixville, PA 19460.

          "Tray  Ledger" shall mean the final night's room revenue (revenue from
           ------------
rooms  occupied  as  of  12:01  a.m.  on  the  Closing  Date, exclusive of food,
beverage,  telephone and similar charges which shall be retained by the Sellers,
including  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.

                                        5
<PAGE>
          (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
                                    ----------

                        PURCHASE AND SALE; STUDY PERIOD;
                        --------------------------------
                            PAYMENT OF CONSIDERATION
                            ------------------------

     2.1     Purchase  and Sale.  Each of the Sellers agrees to sell, assign and
             ------------------
transfer  its  respective  Interests,  in  aggregate,  to  the Purchaser and the
Purchaser  agrees  to  purchase  the  Sellers'  Interests  in  exchange  for the
Consideration  and  in  accordance with the other terms and conditions set forth
herein.

     (a)  The Consideration shall be paid as follows:

          (i)     Upon the execution and delivery of this Agreement, Purchaser
          shall deposit the Deposit in an interest bearing account, which is and
          shall  be  fully  refundable  in  accordance  with the provisions with
          respect  to  the  refund  thereof  as  set  forth  in  this Agreement,
          including, without limitation, unsatisfactory results of Study Period,
          in  Purchaser's  sole  discretion,  and/or  default  by  any  Sellers
          hereunder;  and

          (ii)     The  balance  of  the Consideration, subject to adjustment as
          provided  in  this  Agreement,  shall be paid by the Purchaser by wire
          transfer to the Sellers or such payee as the Sellers may direct at the
          Closing.  The Sellers shall provide Purchaser on or before the Closing
          with Sellers wiring instructions for the payment of the Consideration.

     (b)  The Consideration shall be held by Equity Title Company to be released
          to  Sellers upon delivery of the certificates, documents, instruments,
          agreements  and  other  closing deliveries required by this Agreement.

     2.2     Study  Period.  (a)  The  Purchaser shall have the right, until the
             --------------
end  of the Study Period, to enter upon the Real Property and to perform, at the
Purchaser's  expense,  such  economic,  surveying,  engineering,  environmental,
topographic and marketing tests, studies and investigations as the Purchaser may
deem  appropriate  provided  Purchaser  gives  Sellers at least twenty-four (24)
hours  notice  prior  to  entering  on  the  Real Property.  The Purchaser shall
investigate  the  Property  and  the  LLC, including, without limitation, a full
environmental  due  diligence  audit  and investigation of the Property and UCC,
lien,  litigation,  judgment  and  bankruptcy  searches  on  the  LLC.  Promptly
following the signing of the Agreement by both parties, Sellers shall provide to
Purchaser  access to all information in connection with the Property and the LLC
as  required  by  Purchaser.  Information  shall  include  tax  returns,  books,

                                        6
<PAGE>
accounts,  records,  contracts, financial reports and statements, organizational
documents  of  the  LLC  including  all  amendments  thereto,  if any, and other
relevant  documents  for  completing  the  transactions  contemplated  in  this
Agreement.  If  such  tests,  studies  and  investigations  warrant,  in  the
Purchaser's  sole,  absolute  and  unbelievable  discretion, the purchase of the
Interests for the purposes contemplated by the Purchaser, then the Purchaser may
elect  to  proceed  to  Closing  and  shall  so  notify the Sellers prior to the
expiration  of  the  Study  Period.  If for any reason the Purchaser does not so
notify  the  Sellers  of  its  determination  to proceed to Closing prior to the
expiration  of  the  Study  Period, or if the Purchaser notifies the Sellers, in
writing, prior to the expiration of the Study Period that it has determined, for
any  reason,  and in Purchaser's sole, absolute and unbelievable discretion, not
to  proceed  to  Closing,  this Agreement automatically shall terminate, and the
Purchaser  shall be released from any further liability or obligation under this
Agreement  other  than Purchaser's indemnification obligations given pursuant to
this  paragraph  which  shall  survive  termination  of  this Agreement, and the
Deposit  together with interest accrued thereon shall be immediately refunded to
Purchaser.  Purchaser  shall indemnify Sellers' and the LLC for any loss, damage
or  liabilities  arising  our  of  activities  relating  to the Study Period and
Purchaser  shall  obtain  an  insurance  policy,  in amounts and with a company,
satisfactory  to  Sellers naming the LLC as an additional insured prior to entry
upon  the  Property.

     (b)     During  the  Study  Period, the Sellers shall make available to the
Purchaser,  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, environmental report, zoning compliance,
financial  reports  from the date of commencement of hotel operations, franchise
agreement,  existing  management  agreement,  deed  and  operating  and services
contracts,  and  all  of  the  organizational documents of the LLC including all
amendments  thereto,  if any, and other related materials or information if any,
relating  to  the  Property  and  the  LLC.

     (c)     During  the  Study Period, the Purchaser, at its expense, may cause
an examination of title to the Property to be made, and, prior to the expiration
of  the  Study Period, shall notify the Sellers of any defects in title shown by
such  examination  that the Purchaser is unwilling to accept.  The Sellers shall
notify  the  Purchaser  whether  the  Sellers  are willing to cure such defects.
Sellers  may  cure,  but  shall  not  be obligated to cure such defects.  If the
Sellers  are  unwilling  or  unable  to  cure  any  such defects by Closing, the
Purchaser  shall  elect (1) to waive such defects and proceed to Closing without
any  abatement  in  the  Consideration  or  (2)  to terminate this Agreement and
receive  a  return of the Deposit with interest thereon.  The Sellers shall not,
after  the  date  of  this  Agreement  and  until termination 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  Purchaser's  prior  written  consent,  which  consent shall not be
unreasonably withheld or delayed.  All title matters revealed by the Purchaser's
title examination and not cured by the Sellers as provided above shall be deemed
Permitted Title Exceptions.  If Purchaser shall fail to examine title and notify
the  Sellers  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

                                        7
<PAGE>
at Closing as provided above and other than any title exceptions first appearing
after the date of Purchaser's title examination) shall be deemed Permitted Title
Exceptions.

     (d)     Within  ten  (10) days of the signing of the this Agreement by both
parties,  Sellers  shall  provide  Purchaser  with  copies of existing franchise
agreement,  roof  warranties,  existing  mortgage  and  loan  documents, audited
financial  statements, and HVAC service records and warranties, an as-built ALTA
survey,  the  existing  owner's  title  policy,  any  existing  mortgage policy,
environmental  report, zoning compliance, financial reports from the date of the
opening  of  the  Hotel,  existing  management agreement, deed and operating and
services contracts, and all of the organizational documents of the LLC including
all  amendments  thereto, if any.  In the event that the environmental report is
more  than  one year old, Purchaser may order a new environmental report and any
cost and expense in connection with such new environmental report shall be borne
by  the  LLC  in  the  event  the  Closing  occurs.

     (e)     During  the  Study  Period,  at Purchaser's sole costs and expense,
Purchaser  may  cause  a  property  condition  assessment to be performed on the
Property  ("Property  Condition  Assessment").

     (f)     During  the Study Period, Purchaser shall have an absolute right to
complete  its  investigation  of  the  Property  and  the  LLC  to  its absolute
satisfaction,  and  in  the  event,  the  results  of  the  investigation  are
unsatisfactory in any respect to Purchaser, then Purchaser shall have the option
to  terminate  the  Agreement  without  liability,  and  the  Deposit  shall  be
immediately  refunded  in  full  to  Purchaser.

     (g)     During  the  Study  Period, Purchaser and Sellers shall contact the
Licensor, and obtain tentative approval of the transfer of the franchise license
to  the  Lessee  (defined  hereafter in Section 3.25), and Sellers and Purchaser
shall  use  diligent efforts to cooperate with Licensor to obtain such approval.

     (h)     Purchaser and Sellers agree that, in the event any of the Sellers
intend to sell any of their respective membership interests in the LLC after the
Closing Date, Purchaser shall have the first right of refusal and, in the event
Purchaser intends to sell any of its membership interests in the LLC after the
Closing Date, Sellers shall have the first right of refusal.  Such buy-sell
provisions shall be incorporated in an Amended and Restated Operating Agreement
for the LLC (the "JV Agreements") to be entered into by the Purchaser and
Sellers at Closing, and such JV Agreements shall incorporate all essential terms
of this Agreement.

     (i)     During the Study Period, Purchaser shall make available to Sellers
and Sellers' attorney copies of Purchaser's organizational documents, including
all amendments thereto.

     (j)     During the Study Period, Purchaser shall have the right, at its
expense, to audit the books, records, and financial control procedures of the
LLC with respect to the Hotel.

                                        8
<PAGE>
                                   ARTICLE III
                                   -----------

               SELLERS' REPRESENTATIONS, WARRANTIES AND COVENANTS
               --------------------------------------------------

          To  induce  the Purchaser to enter into this Agreement and to purchase
the  Property,  the  Sellers  hereby  jointly  and  severally make the following
representations,  warranties  and  covenants,  upon  each  of  which each of the
Sellers  acknowledges  and agrees that the Purchaser is entitled to rely and has
relied  upon:

     3.1     Identity  and  Power.  Each of the Sellers is and has all requisite
             --------------------
powers  and  all  governmental  licenses, authorizations, consents and approvals
necessary  to  carry on his or her respective business as now conducted, to own,
lease and operate his or her respective membership interest and Interests in the
LLC,  to  execute  and  deliver  this  Agreement  and any document or instrument
required  to  be  executed  and delivered on behalf of the Sellers hereunder, to
perform  his  obligations  under  this Agreement and any such other documents or
instruments  and  to  consummate  the  transactions  contemplated  hereby;  and

     3.2     Authorization,  No  Violations  and  Notices.
             --------------------------------------------

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

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

               (i)     except  for  the  terms  of  the LLC's Existing Financing
          Documents  (as  defined  in  Section 3.10), the License (as defined in
          Section  3.25)  and  the LLC's liquor license, 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  of  such  Sellers  (if  applicable),  the  LLC Operating
          Agreement,  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

                                        9
<PAGE>
          transactions  contemplated  hereby by the Sellers or compliance by the
          Sellers  with  any  of  the  provisions  hereof.

     3.3     Litigation  with  respect  to  Sellers.  There  is no action, suit,
             --------------------------------------
claim  or  proceeding  pending  or  to Sellers' knowledge, threatened against or
affecting  any of the Sellers or any of the Sellers' assets in any court, before
any  arbitrator  or  before  or  by  any  governmental  body or other regulatory
authority  (i)  that  would  adversely  affect  such Sellers or their respective
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.
None  of  the  Sellers  is  subject to any judgment, decree, injunction, rule or
order  of  any court relating to such Seller's participation in the transactions
contemplated  by  this  Agreement.

     3.4     Interests  and  Property.
             ------------------------

          (a)     The  Interests  will be on the Closing Date, free and clear of
all  liens  and  encumbrances and each of the Sellers has good, marketable title
thereto  and  the  right  to  convey  same  in accordance with the terms of this
Agreement.  Upon delivery of the Sellers' Assignment and Assumption Agreement to
the  Purchaser  at  Closing,  good  valid and marketable title to each and every
Sellers'  respective  Interests,  free  and clear of all liens and encumbrances,
will  pass  to the Purchaser. The Interests and Sellers' remaining 25% interests
in the LLC constitute the only outstanding securities of the LLC. On the Closing
Date,  there  shall  be  no pledge, lien or encumbrance on any of the membership
interests  in  the  LLC.

          (b)     The  Property  will  be on the Closing Date, free and clear of
all  liens  and  encumbrances, except for the Permitted Title Exceptions and the
lien  of  the  existing  deed  of  trust, 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  with  Respect  to  Sellers.  No  Act  of Bankruptcy has
             --------------------------------------
occurred  with  respect  to  the  Sellers.

     3.6     Brokerage  Commission.  The  Sellers  have  engaged the services of
             ---------------------
Doug Henkel of CB Richard Ellis as its broker and will be solely responsible for
any  brokerage  or finder's fee, commission or other amount  due to said broker.

     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 Commonwealth of Virginia and
has all requisite powers necessary to carry on its business as now conducted, to
own,  lease  and  operate  its  properties  and  is  in  Good  Standing  in  the
Commonwealth  of  Virginia.

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

                                       10
<PAGE>
               (i)     except  for  the  terms  of  the LLC's Existing Financing
          Documents, the License and the LLC's liquor license, 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  of  the  LLC  or LLC Operating Agreement, or any note, ,
          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 Sellers, 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  on  the  Closing  Date,  the LLC will have no liabilities, debts or
obligations  which  have  not  been  assumed  by  Sellers.

     3.9     Tax  Matters  with  respect  to  LLC.
             ------------------------------------

          (a)     The  Sellers  have caused the LLC to file, and shall cause the
LLC  to file all income tax information returns on IRS Form 1065 (including K-1s
for  each member) and applicable state and local income tax forms required to be
filed  with  the  United  States  Government  and  with all states and political
subdivisions  thereof  where any such returns are required to be filed and where
the  failure  to  file  such  return or report would subject the LLC or its sole
member the Sellers, to any material liability or penalty.  All taxes (other than
sale  taxes,  rental taxes or the equivalent and real property taxes) imposed by
the  United  States,  or  by any foreign country, or by any state, municipality,
subdivision,  or  instrumentality of the United States or of any foreign country
or by any other taxing authority, which are due and payable by the LLC have been
paid  in  full or adequately provided for by reserves shown in their records and
books  of  account  and  in  the  LLC's  financial information.  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 Sellers'
Knowledge,  no  unassessed  tax deficiency is proposed or threatened against the
LLC.

                                       11
<PAGE>
          (b)     All  taxes,  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 Sellers
shall  cause the LLC to file, all necessary returns and petitions required to be
filed  through the Closing Date.  The Sellers 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 Permitted
Title  Exceptions,  the  Operating Agreements, and the loan documents respecting
that  certain  financing  by  and among the LLC and the lender with the existing
mortgage  on  the  Property  (the  "Lender")  with  an  outstanding  balance  of
approximately  $6,000,000.00  (the  "Existing  Financing  Documents"  and  the
"Existing  Financing", respectively), and such Existing Financing shall continue
to  be  the  debt  of  the LLC after the Closing with the consent of the Lender.

     3.11     No Special Taxes.  The Sellers 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
Sellers'  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
Sellers  have  no Knowledge of any change in the circumstances under which those
Authorizations  were  obtained  that  result  in  their termination, suspension,
modification or limitation other than the LLC's liquor license. The Sellers 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 Purchaser, which consent
will  not  be  unreasonably withheld or delayed, the Sellers 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 Sellers cause the LLC to enter into any agreements
modifying  the  Operating  Agreements.

                                       12
<PAGE>
     3.14     Warranties and Guaranties.  The Sellers 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
Purchaser,  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  G.
                                           ----------

     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
Sellers  shall  cause the LLC to pay all future premiums for such policies up to
the  Closing  Date  (and  any  replacements  thereof)  on or before the due date
therefor.  The  Sellers  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.

     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 Sellers 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 H
              -------------------------------                          ---------
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  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,  to Sellers' knowledge, 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
employees  of  the  LLC  are  at  will  employees.

     3.19     Financial  Information.  To  the  Sellers'  Knowledge,  except  as
              ----------------------
otherwise  disclosed  in  writing to the Purchaser 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 Purchaser 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

                                       13
<PAGE>
schedules  that  may  otherwise  be  required  by  GAAP.  If  requested  by  the
Purchaser,  the  Sellers  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 Purchaser without any changes or alteration thereto.
To  the  best  of  Sellers'  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 Sellers covenant that between the date
              ---------------------
hereof  and  the  date of Closing Sellers 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 Sellers 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  Sellers 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 Purchaser's 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  Sellers or their affiliates have operational
control,  unless  such  reduction  are  made  in the usual, regular and ordinary
manner  consistent with the Licensor's requirements and standards or are related
to  per  diems for bids on government contracts, 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 Purchaser's
              ---------------------
environmental  reports and except for cleaning supplies and the like used in the
ordinary  course  of  Seller's  Business, Sellers 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
Sellers  have  no  Knowledge of any failure to comply with any applicable local,
state  and  federal  environmental  laws,  regulations,  ordinances  and

                                       14
<PAGE>
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  and toxic mold.

     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  Licensor's standards for the Hotel and room type.  The LLC is obligated to
update  the  rooms  of  the  Hotel and FF&E in accordance with the LLC's current
franchise  agreement with the Licensor.  The cost of such updates shall be borne
by  Purchaser  and  Sellers  in  accordance  with  Section  5.22  hereof.

     3.25     License.
              -------

     (a)     The license from Marriott International, Inc. (the "Licensor") with
respect  to  the  Hotel (the "License") is, and at Closing will be, valid and in
full  force  and effect, and on the Closing Date none of the Sellers nor the LLC
will  be  in  default  with  respect  thereto (with or without the giving of any
required  notice  and/or  lapse  of  time);  however,  the  License  will not be
transferable  without  Licensor's  consent.

      (b)     Subject  to  Purchaser  obtaining  Licensor's consent, neither the
execution,  delivery,  or  performance by the Sellers of this Agreement, nor the
consummation  of  the  transactions  contemplated  hereby, nor compliance by the
Sellers  or  the  LLC  with any of the provisions hereof, will violate, conflict
with,  result in a breach of any provision of, constitute a default (or an event
that,  with notice or lapse of  time or both, would constitute a default) under,
result  in the termination of, accelerate the performance required by, or result
in  a right of termination under any of the terms, conditions, or provisions of,
the  License.

     3.26     Access  to Financial Information.  Sellers shall provide access by
              --------------------------------
Purchaser's  representatives, to all financial and other information relating to
the  Property  and  the  LLC.

     3.27     Intentionally  Deleted.
              ----------------------

     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

                                       15
<PAGE>
supplies  and  other such supplies and materials, as are reasonably adequate for
the  current  operation  of  the  Hotel.

     3.29     Environmental  Matters.  To the best of Sellers' actual knowledge,
              -----------------------
there  are  no  violations  of  any  environmental  laws  relating  to Hazardous
Substances  respecting the Property or the Hotel.  In addition, without limiting
the  generality  of  the foregoing, there are no instances and there have not at
any  time  been  any  instances  of  toxic  mold  at  the Property or the Hotel.

     3.30     Noncontravention.  The  execution  and  delivery  of,  and  the
              ----------------
performance by the Sellers of their respective  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 Sellers, or result in the creation
of  any  lien  or  other  encumbrance on any asset of the Sellers.  There are no
outstanding  agreements  (written or oral) pursuant to which the Sellers (or any
predecessor  to  or  representative  of  the  Sellers) has agreed to sell or has
granted  an  option  or  right  of first refusal to acquire the Interests or the
Property  or  any  part  thereof.  Prior to the consummation of the transactions
contemplated  herein,  the Existing Financing Documents require consent from the
Lender  and  the License agreement with Licensor requires consent from Licensor,
which  consents  shall  be sought in accordance with the provisions of Article V
                                                                       ---------
and  the  obtaining  of  such consent shall be a condition precedent to Sellers'
obligations  to  close.

     3.31     Third  Party Beneficiary.  Each of the representations, warranties
              ------------------------
and  covenants  contained  in this Article III and its various subparagraphs are
                                   -----------
intended for the benefit of the Purchaser and may be waived in whole or in part,
by  the Purchaser, but only by an instrument in writing signed by the Purchaser.
Each of said representations, warranties and covenants shall survive the closing
of  the  transaction  contemplated  hereby  for  one  (1)  year.

     3.32     Third  Party  Consents.  Sellers  shall use best efforts to obtain
              ----------------------
Lender's  approval  and  consent to Purchaser's purchase of the Interests in the
LLC  and  to  obtain  Licensor's  consent  to the transfer of the License to the
Lessee.

                                    ARTICLE IV
                                    ----------

              PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
              -----------------------------------------------------

          To  induce  the  Sellers  to enter into this Agreement and to sell the
Interests,  the Purchaser hereby makes the following representations, warranties
and  covenants  with  respect  to the Property, upon each of which the Purchaser
acknowledges  and  agrees  that the Sellers are entitled to rely and have relied
upon:

     4.1     Organization  and  Power.  The  Purchaser  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  Purchaser  hereunder.

                                       16
<PAGE>
     4.2     Noncontravention.  The execution and delivery of this Agreement and
             ----------------
the  performance  by  the Purchaser of its obligations hereunder do not and will
not  contravene, or constitute a default under, any provisions of applicable law
or regulation, the Purchaser's partnership agreement or any agreement, judgment,
injunction,  order,  decree  or  other  instrument binding upon the Purchaser or
result  in  the  creation  of  any lien or other encumbrance on any asset of the
Purchaser.  Any  and  all  liens  on the Interests shall be released at Closing.

     4.3     Litigation.  There  is  no  action,  suit or proceeding, pending or
             ----------
known  to  be  threatened,  against  or  affecting the Purchaser 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 Purchaser is a party or by
which  it is 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
Purchaser  to  perform  its  obligations  hereunder, or under any document to be
delivered  pursuant  hereto.

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

     4.5     No  Brokers.  The Purchaser has not engaged the services of, nor is
             -----------
it  or  will  it  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  Purchaser's obligations hereunder are subject to the satisfaction
of the following conditions precedent and the compliance by the Sellers with the
following  covenants:

     5.1     Sellers'  Deliveries.  The  Sellers  shall  have  delivered  to the
             --------------------
Escrow  Agent  or  the  Purchaser,  as the case may be, on or before the Closing
Date, all of the documents and other information required of Sellers pursuant to
Section 6.2.
-----------

     5.2     Representations,  Warranties and Covenants; Obligations of Sellers;
             -------------------------------------------------------------------
Certificate.  All  of  the  Sellers' 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
Sellers  shall  have  performed  all  of  their  material  covenants  and  other
obligations  under  this  Agreement  and  the  Sellers  shall  have executed and
delivered  to  the  Purchaser  at Closing a certificate to the foregoing effect.

     5.3     Title  Insurance.  The  LLC  shall  hold  good and indefeasible fee
             ----------------
simple  title  to  the Real Property and the Real Property shall be insurable as
such.

     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,

                                       17
<PAGE>
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 Sellers 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 Sellers shall not have
diminished  the  Inventory.  The  Sellers  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  Purchaser.

     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     License.  From  the  date hereof to and including the Closing Date,
             -------
Sellers  shall  comply  with  and  perform  all of the duties and obligations of
licensee  under  the  License.

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

     5.8     Audits.  For  one  year following the Closing Date, Purchaser shall
             ------
have  the  right,  at  its  expense,  to audit the 2003 and 2004 books, records,
financials,  and  financial  control  procedures  of the LLC with respect to the
Hotel.

     5.9     Franchise  License Contingency. As a condition to Closing, Licensor
             ------------------------------
(as  defined  in Section 3.25) will approve the transfer of the franchise to the
Lessee  (defined hereafter in Section 5.17).   The LLC shall cause the franchise
license  with Licensor respecting the Hotel to be transferred to the Lessee, and
Purchaser  and Sellers shall cause the Lessee to obtain a franchise license with
Licensor.  Purchaser  and  Sellers  shall  use  diligent efforts and shall fully
cooperate  with  each  other in pursuit of such franchise license with Licensor.
Sellers  shall contact Licensor and use best efforts to cause Licensor to waive,
or  at  least  reduce,  the franchise transfer fees and costs.  The LLC shall be
responsible  for  all  costs  and  expenses  associated with the transfer of the
franchise  license  to  the Lessee.  In the event that Licensor does not approve
the  transfer  of  the  franchise license to the Lessee on or before the Closing
Date, then either (i) the parties hereto may agree to extend the Closing Date or
(ii)  Purchaser,  at  Purchaser's  sole  option,  may  elect  to  terminate this
Agreement and receive a refund of the Deposit with interest thereon.

     5.10.     Existing  Financing.  The Existing Financing shall continue to be
               -------------------
the  obligation  of  the  LLC  after  the  Closing.  Any  and all costs and fees
associated  with  assignment  and  assumption of the Existing Financing shall be
borne  by  the  LLC  and  Sellers  shall use best efforts to cause the Lender to
waive, or at least reduce, any such costs and fees.

     5.11.     Existing Hotel Management Agreement. LLC shall cause the existing
               -----------------------------------
hotel  management agreement for the Hotel, if any, to be terminated, and Sellers
shall  be  responsible  for all fees and costs associated with such termination.

                                       18
<PAGE>
     5.12.     Non-Competition.  At  Closing,  Sellers  shall  enter  into  a
               ---------------
non-competition  agreement with Purchaser, pursuant to which Sellers shall agree
that neither of the Sellers nor any of the Sellers' affiliates or family members
shall  directly  or indirectly develop, construct, operate or acquire any hotel,
other  than  a  Fairfield  Inn on Richmond Road in Williamsburg, Virginia, and a
Holiday  Inn Express on Richmond Road in Williamsburg, Virginia, within a 2-mile
radius  of  the  Hotel  for  a  3-year  period  from  the  Closing  Date.

     5.13.     Non-Interference.     Neither  of  the  Sellers  nor  any  of the
               ----------------
Sellers'  affiliates or family members shall hire or solicit any employee of the
Hotel  at  any time.  Notwithstanding the foregoing as long as LTD Management is
operating  the  Hotel,  LTD Management may transfer any employee of the Hotel to
other  hotels  managed  by  LTD  Management.

     5.14.     Third  Party  Consents.  To  the  extent  required by any service
               ----------------------
contract  or  agreement  to  which  the  LLC is a party, Sellers will obtain all
necessary  consents  to  the  transfer  of  the Interests.  Sellers shall obtain
Licensor's  consent  in accordance with Section 5.9 and shall obtain the consent
of  the  Lender  on  or before the Closing Date.  Any and all costs and expenses
associated  with  obtaining such third-party consents shall be borne by the LLC.
In  the  event that Lender does not approve the transfer of the LLC Interests to
the  Purchaser on or before the Closing Date, then either (i) the parties hereto
may  agree  to  extend the Closing Date or (ii) Purchaser or Seller may elect to
terminate  this  Agreement.  In  the  event of such termination, Purchaser shall
receive  a  refund  of  the  Deposit  with  interest  thereon.

     5.15.     Cash Flow Participation.  Purchaser shall, during the term of its
               ------------------------
investment  and  its  membership in the LLC, beginning from the Closing Date, be
entitled  to  receive  on  an  annual  basis  first  (i) an eight percent (8.0%)
preferred  return  for year one, (ii) a ten percent (10.0%) preferred return for
year two, and (iii) a twelve percent (12.0%) preferred return for year three and
thereafter  on its Contributed Equity from the net operating cash flows from the
cash  available  for distribution of the LLC, which net operating cash flows are
defined  as  Gross  Operating  Profit less the debt service payments, management
fee,  asset  management  fee  (as  set  forth  in the Asset Management Agreement
(defined  in  Section 5.18)), property taxes, insurance premiums, lease payments
(if  any)  and  funds in the amount of four percent (4.0%) set aside in the FF&E
replacement  reserve.  Sellers  then  on  an  annual  basis shall be entitled to
receive  (i)  an  eight  percent  (8.0%) return for year one, (ii) a ten percent
(10.0%)  return for year two, and (iii) a twelve percent (12.0%) return for year
three  and  thereafter  on  their Contributed Equity from the net operating cash
flows  (as  defined  above)  from  cash  available  for distribution of the LLC.
Remaining  cash  flows from cash available for distribution ("Excess Cash") will
be  apportioned  pro-rata  based upon Sellers' and Purchaser's respective equity
ownership  in  the  LLC.   The  amount  of  Purchaser  and  Sellers'  respective
Contributed  Equity as of the Closing Date shall be set forth in the Amended and
Restated  Operating  Agreement of the LLC to be entered into between the parties
as  of  the  Closing  Date.

     5.16.     Liquidation.  Proceeds  (after  payment of all outstanding debts,
               ------------
obligations  and  liabilities  of  the  LLC)  received from a sale, liquidation,
refinancing  or  other  capital  event  of  the

                                       19
<PAGE>
LLC (individually and collectively, "Event of Liquidation") shall be distributed
as  follows:  First,  the  Purchaser  shall  receive  the  total  amount  of its
Contributed  Equity  and  Sellers shall receive second the total amount of their
respective  Contributed Equity, and then any remaining proceeds shall be divided
pro-rata  to  Purchaser and Sellers based upon their respective equity ownership
in  the  LLC.  In  the event there has been no third party offer to buy the LLC,
prior  to an Event of Liquidation occurring, Sellers shall have a right of first
refusal  based  on  a  valuation  of  the  LLC  determined  by three independent
appraisers  mutually  approved  by  Purchaser  and Sellers.  Upon receipt of the
three  appraisals,  Sellers  shall  have 30 days to make an offer to buy for the
amount  equal to the average of the three appraised valuations.  In the event no
such  offer  is  made  by  Sellers in such 30-day period, Sellers' first refusal
right shall be deemed waived.  In the event Sellers elect to buy the Purchaser's
membership  interests  within such 30-day period pursuant hereto, closing of the
sale  of  such  membership  interests  shall  occur  within  60 days of Sellers'
election  to  buy.

     5.17.     Lessee.  On or before the Closing Date, Sellers and Purchaser, at
               -------
the  sole  cost and expense of the LLC, shall take all required actions to cause
HT  LTD Williamsburg, LLC, a Virginia limited liability company ("Lessee") to be
formed  and  owned by Purchaser or its affiliate with 75% interest in the Lessee
and  the  Sellers,  collectively,  with  25%  interest  in  the  Lessee.

     5.18.     Percentage  Lease  and New Hotel Management Agreement.  Purchaser
               -----------------------------------------------------
and Sellers shall cause the Lessee to enter into a percentage lease with LLC and
LLC  shall enter into such lease with Lessee.  Purchaser and Sellers shall cause
the  Lessee  to enter into a new management agreement for operation of the Hotel
with  LTD  Management  Company,  LLC  (the "Manager") (as amended, modified, and
restated,  the  "Management  Agreement"),  which  Management  Agreement shall be
negotiated  between  the  parties during the Study Period.  Under the Management
Agreement,  Manager  shall  be  responsible  for the day-to-day operation of the
Property.  The management fee to Manager for the operation of the Hotel shall be
3% of Gross Revenues of the Hotel.  Purchaser and Sellers shall cause the Lessee
to  enter into an asset management agreement with Hersha Hospitality Management,
L.P.  ("HHMLP")  (the  "Asset  Management Agreement"), and pursuant to the Asset
Management  Agreement,  HHMLP will act as Asset Manager, providing overall sales
and  management support to Lessee, and all accounting functions for the LLC, and
HHMLP  shall  earn  an  asset management fee of 1% of the Gross Revenues. In the
event  Sellers  sell  their  remaining  25% interests in the LLC, the Management
Agreement  shall  terminate.

     5.19.     LLC  Manager.    Sellers and Purchaser agree that Jay H. Shah, or
               ------------
any  other  officer  of Purchaser or its affiliates, shall be the new Manager of
the  LLC and appointment of this new Manager shall be effective on and after the
Closing  Date.  Any sale, refinance, or liquidation of the LLC shall require the
unanimous  consent  of  all  the  members  of  the  LLC.

     5.20.     Buy-Sell  Provisions.    Purchaser and Sellers agree that, in the
               --------------------
event  any  of  the  Sellers  intend  to sell any of their respective membership
interests  in  the  LLC  after  the Closing Date, Purchaser shall have the first
right  of  refusal  and,  in  the  event  Purchaser  intends  to  sell  any

                                       20
<PAGE>
of  its  membership  interests  in the LLC after the Closing Date, Sellers shall
have  the  first right of refusal.  The non-offering party shall have 30 days to
respond  to  an offer to sell by the other party and exercise its first right of
refusal.  In  the event the non-offering party elects to purchase the membership
interests  being  offered for sale within the 30-day response period, closing of
the  sale  of  such  membership  interests  shall  occur  within  60 days of the
non-offering  party's election to buy.  In the event the non-offering party does
not  accept the offer and does not elect to buy the membership interests offered
for sale within the 30-day response period, the non-offering party's first right
of refusal shall be deemed waived; provided that, if the non-offering party does
not  elect  to  buy  the  membership  interests, the offering party shall have a
period of 90 days (beginning the day after the expiration of the 30-day response
period)  to  sell  the  membership  interests  on  the same terms and conditions
contained  in the right of refusal.  In the event such a sale is not consummated
within  the  90-day period, then the non-offering party's right of first refusal
shall  continue  to be applicable to any future proposed sales of the membership
interests.  Such  buy-sell provisions shall be incorporated in the JV Agreements
(as  defined  in Section 2.2(h)) to be entered into by the Purchaser and Sellers
at Closing, and such JV Agreements shall incorporate all essential terms of this
Agreement.

     5.21.     Hotel  Manager's  Employees.    The Manager may use its employees
               ---------------------------
who  are  not  specifically  assigned  to  the Hotel to perform services for the
Hotel,  and  the  pro-rata  cost  of  their salaries, payroll taxes and employee
benefits  with  respect  to  such  services  provided  for  the  Hotel  shall be
reimbursed  to  Manager as an operating expense to the extent such costs are set
forth  in  the  budget approved by the Lessee.  The provisions set forth in this
Section  5.21 shall be substantially incorporated in the Management Agreement to
be  entered  into  between the Lessee and the Manager.  Furthermore, the Manager
shall  be  reimbursed  for  the pro-rata cost of the salaries, payroll taxes and
employee  benefits  of  the  Manager's  Revenue Manager, Independent Maintenance
Group  and  Marketing  Personnel  together  with a pro-rata share of the expense
incurred by such individuals to the extent such costs and expenses are set forth
in  the  approved  budget  in accordance with the Management Agreement, provided
that  to  the extent such expenses incurred by the Independent Maintenance Group
are  for  repairs  necessary for the maintenance and operation of the Hotel, the
expenses  will  be paid for as an operating expense even if not set forth in the
approved  budget.  For  purposes  of this provision, the pro-rata share shall be
determined  by  a  fraction  the  numerator  of  which  shall be one (1) and the
denominator  will  be  the  number  of  hotels/motels  to which an individual is
providing  services.

     5.22.     Reserves  and  FF&E  Improvements.  At  Closing,  Purchaser shall
               ---------------------------------
reimburse  Sellers an amount equal to 75% of all reserves/escrows held by Lender
(including  FF&E  reserves and tax reserves), which amount will be determined at
Closing,  and  such  reimbursement  shall  be  added  to  the  total  amount  of
Contributed Equity of Purchaser.  Additionally, the Sellers shall receive credit
as  a capital contribution in the amount of 25% of the existing reserves/escrows
held  with  the  Lender  which  amount shall be added to the total amount of the
Contributed  Equity  of  Sellers.

     5.23.     Removal  of  Pledges/Liens.  As  of the Closing Date, any and all
               --------------------------
pledges  of  the  LLC membership interests, if any, shall be released, and there
shall  be  no pledge, lien, or encumbrance on any of the membership interests in
the  LLC  as  of  the  Closing  Date.

                                       21
<PAGE>
                                   ARTICLE VI
                                   ----------

                                    CLOSING
                                    -------

     6.1     Closing.  Closing  shall  be  held  at  a location that is mutually
             -------
acceptable to the parties, on or before March 31, 2005.

     6.2     Sellers'  Deliveries.  At  Closing,  the  Sellers  shall deliver to
             --------------------
Purchaser  all  of the following instruments, each of which shall have been duly
executed  and, where applicable, acknowledged on behalf of the Sellers and shall
be  dated  as  of  the  date  of  Closing:

          (a)     Assignments  of  the  Interests.

          (b)     The  certificate  required  by  Section  5.2.
                                                  ------------

          (c)     The  Assignment  and  Assumption  Agreement.

          (d)     Intentionally  Deleted.

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

          (f)     The  FIRPTA  Certificate  for  the Sellers who are eligible to
execute  such  certificate.

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

          (h)     Certified  copies  of  the  LLC's  Organizational  Documents.

          (i)     Certified  copies  of  any  entity  Sellers'  Organizational
Documents.

          (j)     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.

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

          (l)     Intentionally  Deleted.

          (m)     All current real estate and personal property tax bills in the
Sellers' or the LLC's possession or under its control.

                                       22
<PAGE>
          (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 of the LLC, 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 Purchaser to honor the
LLC's  commitments  in  that  regard.

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

          (r)     All  keys  for  the  Property.

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

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

          (u)     Complete  set  of  "as-built"  drawings  for the Improvements.

          (v)     Such  proof,  reasonably  acceptable to the Sellers evidencing
the  payment  by  Purchaser of all transfer taxes if any, incurred in connection
with  the  transactions  contemplated  by  this  Agreement.

          (w)     Counsel  opinion letter.  During the Study Period, Sellers and
Buyer  will agree upon the form of Sellers' Counsel opinion letters satisfactory
to both parties.  In the event the parties do not agree upon the form of opinion
letter,  either  party  can  terminate  this  Agreement.

          (x)     A  written  instrument  executed by the Sellers, conveying and
transferring  to  the Purchaser all of the Sellers' right, title and interest in
any  telephone  numbers  and facsimile numbers relating to the Property, and, if
the  Sellers  maintains a post office box, conveying to the Purchaser all of its
interest  in and to such post office box and the number associated therewith, so
as  to  assure  a  continuity  in  operation  and  communication.

          (y)     Any  other  document reasonably required by Purchaser in order
to  consummate  the  transaction.

     6.3     Purchaser's  Deliveries.  At  Closing,  the  Purchaser shall pay or
             -----------------------
deliver  to  the  Sellers  the  following:

          (a)     The  Consideration.

                                       23
<PAGE>
          (b)     The  Assignment  and  Assumption  Agreement.

          (c)     Any  other  document or instrument reasonably requested by the
Sellers  or  required  hereby.

          (d)     Counsel  opinion letter.  During the Study Period, Sellers and
Purchaser  will  agree  upon  the  form  of  Purchaser's  Counsel opinion letter
satisfactory  to  both  parties.  In the event the parties do not agree upon the
form of opinion letter, either party can terminate this Agreement.

     6.4     Closing  Costs.   Real  estate  transfer  taxes, if any, and to the
             --------------
extent  they are due and payable, shall be paid as customary in the Commonwealth
of Virginia.  All filing fees, recording or other similar taxes due with respect
to  the  transfer  of the Interests and all charges for title insurance premiums
shall  be  paid by the LLC.  LLC shall pay for any costs and expenses associated
with obtaining of the consent from the Lender for the assumption of the Existing
Financing  and  any  cost  and  expenses  associated  with  the  transfer of the
franchise  to  Lessee as well as any other costs and expenses in connection with
any  necessary  third  party  reports  related  thereto.

     6.5     Income  and  Expense  Allocations.  All  income  and  expenses with
             ---------------------------------
respect  to  the Property, determined in accordance with United States generally
accepted  accounting principles consistently applied, shall be allocated between
the  Sellers  and  the  LLC.  The  Sellers  shall  be entitled to all income and
responsible  for  all  expenses  for  the period of time up to but not including
12:01  a.m. on the Closing Date, and the LLC shall be entitled to all income for
the  period  of time from, after and including 12:01 a.m. on the Closing Date as
per  Section  5.15 of this Agreement.  All adjustments shall be made by separate
agreement  between  the  parties  and shall be payable by check or wire transfer
directly between the parties.  Without limiting the generality of the foregoing,
the  following  items of income and expense shall be allocated as of the Closing
Date:

          (a)     Current  and  prepaid  rents,  including,  without limitation,
prepaid room receipts, function receipts and other reservation receipts.

          (b)     Real  estate  and  personal  property  taxes.

          (c)     Amounts  under  the  Operating  Agreements.

          (d)     Utility  charges  (including  but  not  limited to charges for
water,  sewer  and  electricity).

          (e)     Wages,  vacation  pay,  pension and welfare benefits and other
fringe benefits of all persons employed at the Property who the Purchaser elects
to  employ.

          (f)      All prepaid reservations and contracts for rooms confirmed by
Sellers prior to the Closing Date for dates after the Closing Date, all of which
Purchaser  shall  honor.

          The  Sellers  shall  be  required  to  pay all sales taxes and similar
impositions  on

                                       24
<PAGE>
revenues generated from the Hotelup to the Closing Date.

          The  LLC  shall not be obligated to collect any accounts receivable or
revenues  accrued prior to the Closing Date for Sellers, but if the LLC collects
same,  such  amounts  will be promptly remitted to Sellers in the form received.

          If  accurate  allocations  cannot  be  made at Closing because current
bills  are  not obtainable (as, for example, in the case of utility bills or tax
bills),  the  parties  shall  allocate such income or expenses at Closing on the
best available information, subject to adjustment upon receipt of the final bill
or  other  evidence of the applicable income or expense.  Any income received or
expense  incurred  by  the Sellers or the LLC with respect to the Property after
the  date  of Closing shall be promptly allocated in the manner described herein
and  the  parties  shall  promptly pay or reimburse any amount due.  The Sellers
shall  pay  at  Closing  all  special  assessments  and  taxes applicable to the
Property  which  are  due  on  or  before  the  Closing.

          The  assignment  of  membership  interest  transferring  the  Sellers
ownership of the Interests will be dated as of the Closing Date, and the Sellers
will  be  entitled  to any distributions thereon on and before the Closing Date.

                                   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 Sellers shall give written
notice  thereof  to  the  Purchaser  promptly after the Sellers learn or receive
notice  thereof.  If  all  or  any part of the Real Property is, or is to be, so
condemned  or sold such that the Hotel cannot be operated in the manner in which
it  currently  is operated, the Purchaser shall have the right to terminate this
Agreement  and  receive  a  refund of the Deposit with interest thereon.  If the
Purchaser elects 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  Purchaser  at  Closing.

     7.2     Risk of Loss.  The risk of any loss or damage to the Property prior
             ------------
to  the  Closing  shall  remain upon the Sellers.  If any such loss or damage to
more  than  twenty  five  percent  (25%) of the value of the Improvements occurs
prior to Closing, the Purchaser shall have the right to terminate this Agreement
and  receive  a  refund  of the Deposit with interest thereon.  If the Purchaser
elects  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  LLC  at  Closing.

                                       25
<PAGE>
                                   ARTICLE VIII
                                   ------------

               LIABILITY OF PURCHASER; INDEMNIFICATION BY SELLERS;
               ---------------------------------------------------
                     TERMINATION RIGHTS; RIGHTS OF PURCHASER
                     ---------------------------------------

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

     8.2     Indemnification  by  Sellers.  The  Sellers  hereby,  jointly  and
             ----------------------------
severally,  indemnify  and  hold the Purchaser harmless from and against any and
all claims, costs, penalties, damages, losses, liabilities and expenses, subject
to  Section  9.11,  that  may  at any time be incurred by the Purchaser, whether
    -------------
before  or  after  Closing,  as  a result of any breach by the Sellers of any of
their  representations, warranties, covenants or obligations set forth herein or
in  any  other  document  delivered  by  the  Sellers  pursuant  hereto.

     8.3     Specific Performance and Remedies.  Sellers agree that in the event
             ----------------------------------
of  any  breach  or  threatened breach by Sellers of any covenant, obligation or
other provision contained in this Agreement, Purchaser shall be entitled (as its
sole remedy), to the extent permitted by applicable law, to seek (a) a decree or
order  of specific performance to enforce the observance and performance of such
covenant,  obligation  or other provision and (b) an injunction restraining such
breach  or  threatened  breach.  If  any  legal action or other legal proceeding
relating to this Agreement or the enforcement of any provision of this Agreement
is  brought  against  any party to this Agreement, the prevailing party shall be
entitled  to  recover  reasonable  attorney's  fees, costs and disbursements (in
addition  to  any  other  relief to which the prevailing party may be entitled).

     8.4     Termination  by  Sellers.  If,  prior  to  Closing,  the  Purchaser
             ------------------------
defaults  in  performing  any  of  its  obligations under this Agreement and the
Purchaser  fails  to  cure  any  such  default within ten (10) days after notice
thereof  from  the Sellers, then the Sellers' sole remedy for such default shall
be  to  terminate  this  Agreement.   Upon  such  termination,  Sellers shall be
entitled  to  receive  the  Deposit  as  LIQUIDATED DAMAGES in full and complete
satisfaction  of  any  and  all  damages  incurred by Sellers on account of such
default,  it being acknowledged and agreed that in the event of any such default
it  would  be  difficult  or  impossible to ascertain the precise amount of such
damages  and  the amount of the Deposit are fair and reasonable estimates of the
amount of such damages.  Upon notice to the Escrow Agent of Purchaser's default,
the  Escrow  Agent  shall  transfer  the  Deposit  to  Sellers.

                                      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.

                                       26
<PAGE>
This Agreement may be modified only by a written instrument duly executed by the
parties  hereto.

     9.2     Assignments.  The  Purchaser may assign its rights hereunder to any
             -----------
affiliate  of  Purchaser without the consent of the Sellers.  No such assignment
shall relieve the Purchaser of any of its 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 Purchaser and the Sellers 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  Commonwealth  of  Virginia.

     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 provided the parties realize the
material  benefits  of  this  Agreement, 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

                                       27
<PAGE>
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  Sellers:          H.  K.  Thakkar,  as  Authorized
     ---------------------
                                    Agent  for  the  Sellers
                                    1564  Crossways  Boulevard
                                    Chesapeake,  Virginia  23320
                                    Facsimile:  757-420-0931
                                    Telephone:  757-420-0900

     With  a  copy  to:             Alan  M.  Frieden,  Esquire
     -----------------
                                    Faggert  &  Frieden,  P.C.
                                    222 Central Park Avenue, Suite 1300
                                    Virginia  Beach,  Virginia  23462
                                    Telephone:  757-424-3232
                                    Fax:  757-424-0102

     If  to  the  Purchaser:        Hersha  Hospitality  Limited  Partnership
     ----------------------
                                    148  Sheraton  Drive,  Box  A
                                    New  Cumberland,  PA  17070
                                    Attn:  Ashish  Parikh
                                    Telephone:  717-770-2405
                                    Facsimile:  717-774-7383

     With  a  copy  to:             Shah  &  Byler  LLP
     -----------------
                                    510  Walnut  Street,  9th  Floor
                                    Philadelphia,  PA  19106
                                    Attn:  Lok  Mohapatra,  Esquire
                                    Telephone:  215-238-1045
                                    Facsimile:  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  Sellers  and  the  Purchaser  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.

     9.12     Further  Assurances.  The  Sellers and the Purchaser each covenant
              -------------------
and  agree  to  sign,  execute  and deliver, or cause to be signed, executed and
delivered,  and  to  do  or  make,  or

                                       28
<PAGE>
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     Preferred  Member.  Pursuant to this Agreement, Purchaser shall be
              -----------------
a  preferred  investor  and  member  in  the  LLC,  and  as such shall receive a
preferred return on its Contributed Equity from the distributed cash flow of the
LLC  as  per  Section  5.15.

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

     9.15     Confidentiality.  Purchaser and Sellers and their representatives,
              ----------------
including  any  professionals representing the Purchaser and Sellers, 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.

     9.16     Publicity.  The  parties  agree  that  no  party  shall contact or
              ---------
conduct  negotiations  with  public  officials,  make any public pronouncements,
issue  press  releases or otherwise furnish information regarding this Agreement
and/or  the transactions contemplated by this Agreement to a third party without
obtaining  the prior written consent of all parties.  No party, or its employees
with  knowledge  of  the  transactions  contemplated  herein, shall trade in the
securities  of  any  affiliate  of  Purchaser until a public announcement of the
transactions contemplated by this Agreement has been made public.

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

                                 SELLERS:
                                 --------

                                 _____________________________
                                 By:  Pushpa H. Thakkar

                                 _____________________________
                                 By:  Bharti D. Desai

                                 _____________________________
                                 By:  Malay H. Thakkar

                                 _____________________________
                                 By:  Kush H. Thakkar

                                       29
<PAGE>
                                 _____________________________
                                 By:  Neel D. Desai

                                 _____________________________
                                 By:  Tejal D. Desai

                                 PURCHASER:
                                 ----------

                                 Hersha Hospitality Limited Partnership, a
                                 Virginia limited partnership

                                 By:  Hersha Hospitality Trust, a Maryland
                                      business trust, its sole general partner

                                 By: __________________________
                                 Jay H. Shah, President & COO

                                 THE LLC:
                                 --------

                                 LTD ASSOCIATES ONE, LLC, a Virginia
                                 limited liability company

                                 By: _________________________

                                     ___________________, Manager

                                       30
<PAGE>
                                    EXHIBIT A
                                    ---------

                            LEGAL DESCRIPTION OF LAND
                            -------------------------

<PAGE>
                                    EXHIBIT B
                                    ---------

                              EMPLOYMENT AGREEMENTS
                              ---------------------

<PAGE>
                                    EXHIBIT C
                                    ---------

                               INSURANCE POLICIES
                               ------------------

<PAGE>
                                    EXHIBIT D
                                    ---------

                             LLC OPERATING AGREEMENT
                             -----------------------

<PAGE>
                                    EXHIBIT E
                                    ---------

                              OPERATING AGREEMENTS
                              --------------------

<PAGE>
                                    EXHIBIT F
                                    ---------

                          LLC ARTICLES OF ORGANIZATION
                          ----------------------------

<PAGE>
                                    EXHIBIT G
                                    ---------

                       SELLERS' WARRANTIES AND GUARANTIES
                       ----------------------------------

<PAGE>
                                    EXHIBIT H
                                    ---------

                               LITIGATION SCHEDULE
                               -------------------

<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}]]