PURCHASE AGREEMENT

This Purchase Agreement (this “ Agreement ”), dated as of August 4, 2009, is by and among Real Estate Investment Group L.P., a Bermuda limited partnership, whose general partner and majority limited partner is Tyrus S.A., a Uruguayan sociedad anónima wholly-owned by IRSA Inversiones y Representaciones Sociedad Anónima, an Argentine sociedad anónima (the “ Purchaser ”), Hersha Hospitality Trust, a Maryland real estate investment trust (the “ Company ”) and Hersha Hospitality Limited Partnership, L.P., a Virginia limited partnership (the “ Operating Partnership ”).

WHEREAS, the Purchaser desires to purchase from the Company, and the Company desires to issue and sell to the Purchaser, an aggregate of 5,700,000 shares (the “ Primary Shares ”) of the Company’s Class A common shares of beneficial interest, par value $0.01 per share (the “ Common Shares ”);

WHEREAS, in connection with the sale and purchase of the Primary Shares, the Company and the Purchaser intend to enter the Investor Rights and Option Agreement (as defined below), pursuant to which the Company shall grant the Purchaser the option to purchase 5,700,000 additional Common Shares (the “ Option Shares ”) on the terms contained therein; and

WHEREAS, in connection with the sale and purchase of the Primary Shares, the Company and the Purchaser intend to enter into the Registration Rights Agreement (as defined below), pursuant to which the Company shall be obligated to file a shelf registration statement on Form S-3 with respect to the Primary Shares and the Option Shares; and

WHEREAS, in connection with the transactions contemplated by the Purchase Agreement and the Investor Rights and Option Agreement, the Company and the Purchaser intend to enter into the Trustee Designation Agreement, pursuant to which the Company has agreed to elect or appoint a representative designated by the Purchaser as a trustee of the Company;

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

1.              Purchase and Sale .  Subject to the terms and conditions hereof, on the Closing Date the Purchaser shall purchase from the Company, and the Company shall issue and sell to the Purchaser, the Primary Shares at a price per share of $2.50, for an aggregate gross purchase price of U.S. $14,250,000 (the “ Purchase Price ”).

2.              Representations and Warranties of the Purchaser .  The Purchaser represents and warrants to the Company that:

(a)             Due Authorization .  The Purchaser has full entity power and authority to enter into the Transaction Documents (as defined below) and is duly authorized to purchase the Primary Shares from the Company upon the terms and subject to the conditions set forth in the Transaction Documents.  Each Transaction Document has been duly authorized, validly executed and delivered by the Purchaser and constitutes a legal, valid and binding agreement of the Purchaser, enforceable against the Purchaser in accordance with its terms except as may be limited by (i) the effect of bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights or remedies of creditors or (ii) the effect of general principles of equity, whether enforcement is considered in a proceeding in equity or at law, and the discretion of the court before which any proceeding therefore may be brought.

(b)             Prospectus and Prospectus Supplement .  The Purchaser has received a copy of the Company’s base prospectus, dated November 26, 2006 (the “ Base Prospectus ”) and will receive a copy of the prospectus supplement specifically relating to the Primary Shares (the “ Prospectus Supplement ” and, together with the Base Prospectus, the “ Prospectus ”).

(c)             Waiver Representation Letter .  The representations and warranties contained in the Representation Letter (as defined below), are true and correct in all respects as of the date hereof and as of the Closing Date (as defined below).

(d)             Anti-Money Laundering .

3.               Representations and Warranties of the Company and the Operating Partnership .  The Company and the Operating Partnership, jointly and severally represent and warrant to Purchaser that as of the date of this Agreement and as of the Closing Date, as the case may be:

(a)            The Company meets the requirements for use of Form S-3 under the Securities Act of 1933, as amended, and the rules and regulations thereunder (collectively, the “ Securities Act ”).  On October 17, 2006, the Company filed with the Securities and Exchange Commission (the “ Commission ”) a Form S-3 registration statement applicable to the Primary Shares (the “ Registration Statement ”), which has been declared effective under the Securities Act.  The Company has not received, and has no knowledge of, any order of the Commission preventing or suspending the use of the Registration Statement, or threatening or instituting proceedings for that purpose.  Any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement have been so described or filed.  The Prospectus Supplement has been prepared and will be filed pursuant to Rule 424(b) of the Securities Act within the time period prescribed therein.  Copies of the Registration Statement, the Prospectus and any such amendments or supplements, and all documents incorporated by reference therein, that were filed with the Commission on or prior to the date of this Agreement have been delivered, or made available, to Purchaser and its counsel.  The Company’s Class A common shares are currently listed on the New York Stock Exchange (the “ Exchange ”) under the trading symbol “HT.”

(b)            The Prospectus delivered to the Purchaser is identical to the electronically transmitted copies thereof filed with the Commission pursuant to its Electronic Data Gathering Analysis and Retrieval System (“ EDGAR ”), except to the extent permitted by Regulation S-T.

(c)            Each of the Registration Statement, any registration statement filed pursuant to Rule 462(b) of the Securities Act (each, a “ Rule 462(b) Registration Statement ”) and each amendment thereto, at the time it became effective and on the Closing Date, complied and will comply in all material respects with the requirements of the Securities Act, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.  The preceding sentence does not apply to statements in or omissions from the Registration Statement, any Rule 462(b) Registration Statement or any amendment thereto in reliance upon and in conformity with written information relating to the Purchaser furnished to the Company in writing by the Purchaser expressly for use therein.

(d)            Neither the Prospectus nor any amendments or supplements thereto, at the time the Prospectus or any such amendment or supplement was issued, as of the date hereof and as of the Closing Date, as the case may be, included or will include an untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The preceding sentence does not apply to statements in or omissions from the Registration Statement, any Rule 462(b) Registration Statement or any amendment thereto in reliance upon and in conformity with written information relating to the Purchaser furnished to the Company in writing by the Purchaser expressly for use therein.

(e)            Each document incorporated by reference in the Registration Statement or the Prospectus heretofore filed, when it was filed (or, if any amendment with respect to any such document was filed, when such amendment was filed), conformed in all material respects with the requirements of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and the rules and regulations thereunder, and any further documents so filed and incorporated after the date of this Agreement will, when they are filed, conform in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder, and no such document, when it was filed (or, if an amendment with respect to any such document was filed, when such amendment was filed), contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, and no such document, when it is filed, will contain an untrue statement of a material fact or will omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading.

(f)            All of the issued and outstanding shares of beneficial interest of the Company have been duly authorized and validly issued, are fully paid and nonassessable and have been issued in compliance with applicable federal and state securities laws.  None of the outstanding shares of beneficial interest of the Company were issued in violation of any preemptive rights, rights of first refusal or other similar rights.  Except as set forth in the Prospectus, there are no outstanding options, warrants or similar rights to subscribe for, or contractual obligations to issue, sell, transfer or acquire, any shares of beneficial interest of the Company or any securities convertible into or exchangeable for any such shares of beneficial interest.

(g)            The Primary Shares to be issued and sold by the Company hereunder have been duly authorized and, when issued and delivered against full payment therefor in accordance with the terms hereof, will be validly issued, fully paid and nonassessable and free of any preemptive rights, rights of first refusal or other or similar rights.  The Option Shares to be issued and sold by the Company pursuant to the Investor Rights and Option Agreement have been duly authorized and, when issued and delivered against full payment therefore in accordance with the terms of the Investor Rights and Option Agreement, will be validly issued, fully paid and nonassessable and free of any preemptive rights, rights of first refusal or other or similar rights.

(h)            The shares of beneficial interest of the Company, including the Primary Shares and the Option Shares, conform to the description thereof contained in the Prospectus.  The certificates for the Primary Shares and the Option Shares are in due and proper form, and the holders of the Primary Shares and the Option Shares will not be subject to personal liability solely by reason of being such a holder.

(i)             Immediately after the transactions contemplated by the Transaction Documents, all of the issued and outstanding common units of limited partnership interest in the Operating Partnership (“ Common Units ”) and all of the issued and outstanding preferred units of limited partnership interest in the Operating Partnership (“ Preferred Units ”) will have been validly issued.  Immediately after the transactions contemplated by the Transaction Documents, none of the outstanding Common Units or Preferred Units will have been issued in violation of any preemptive right, right of first refusal or other similar right; and the outstanding Common Units and Preferred Units have been offered, sold and issued by the Operating Partnership in compliance with applicable federal and state securities laws.

(j)             The Company does not own or control, directly or indirectly, any corporation, association or other entity other than (i) the subsidiaries that are listed in Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the most recently ended fiscal year and (ii) those subsidiaries formed since the last day of the most recently ended fiscal year, all of which are listed on Schedule 3(j) (each, a “ Subsidiary ” and collectively, the “ Subsidiaries ”).

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

(l)             The outstanding equity interests of, or other ownership interests in, each of the Consolidated Subsidiaries have been duly authorized and validly issued, are fully paid and, except as to Consolidated Subsidiaries that are partnerships or limited liability companies, nonassessable, and are owned by the Company, directly or indirectly, free and clear of any security interest, lien, encumbrance or claim.

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

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

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

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

(q)            No consent, approval, authorization, order, license, certificate, permit, registration, designation or filing by or with any governmental agency or body is required for the execution, delivery and performance by the Company and the Operating Partnership of their respective obligations under the Transaction Documents to which each is a party and the consummation by the Company and the Operating Partnership of the transactions contemplated by the Transaction Documents, including the valid authorization, issuance, sale and delivery of the Primary Shares and the Option Shares, except such as have been obtained or made and may be required by (i) the Exchange and (ii) the securities or Blue Sky laws of the various states in connection with the offer and sale of the Primary Shares.

(r)             None of the issuance or sale of the Primary Shares or the Option Shares or the execution, delivery and performance of the Transaction Documents: (i) conflicts with or will conflict with or constitutes or will constitute a breach of, or a default under, the Company's declaration of trust, as amended or supplemented, or bylaws, the Operating Partnership's certificate of limited partnership or the Operating Partnership Agreement, or any Existing Instrument to which the Company or any Consolidated Subsidiary is a party or by which any of its respective properties may be bound; (ii) violates any statute, law, regulation, ruling, filing, judgment, injunction, order or decree applicable to the Company or any Consolidated Subsidiary or any of their properties; or (iii) results in a breach of, or default or Debt Repayment Triggering Event (as defined below) under, or results in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any Consolidated Subsidiary pursuant to, or requires the consent of any other party to, any Existing Instrument, except for such conflicts, breaches, defaults, liens, charges or encumbrances that will not, individually or in the aggregate, result in a Material Adverse Effect. As used herein, a “ Debt Repayment Triggering Event ” means any event or condition that gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any Consolidated Subsidiary.

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

(t)             KPMG LLP, who has audited the consolidated financial statements of the Company and the Consolidated Subsidiaries (including the related notes thereto and supporting schedules) incorporated by reference in the Registration Statement and the Prospectus, is and was, during the periods covered by its reports incorporated by reference in the Registration Statement and the Prospectus, an independent registered public accountant as required by the Securities Act, the Exchange Act and the Public Company Accounting Oversight Board (“ PCAOB ”).  PricewaterhouseCoopers LLP, who has audited the consolidated statements of operations, of changes in members’ equity and of cash flows of Mystic Partners, LLC and its subsidiaries (including the related notes and supporting schedules thereto) for the year ended December 31, 2006 incorporated by reference in the Registration Statement and the Prospectus, is and was, during the periods covered by its reports incorporated by reference in the Registration Statement and the Prospectus, an independent registered public accountant as required by the Securities Act, the Exchange Act and PCAOB.

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

(v)            Except as disclosed in the Registration Statement and the Prospectus, subsequent to the respective dates as of which such information is given in the Registration Statement and the Prospectus: (i) neither the Company nor any Consolidated Subsidiary has incurred any material liabilities or obligations, indirect, direct or contingent, or entered into any transaction that is not in the ordinary course of business; (ii) neither the Company nor any Consolidated Subsidiary has sustained any material loss or interference with its business or properties from fire, flood, windstorm, accident or other calamity, whether or not covered by insurance; (iii) except for regular quarterly dividends, neither the Company nor any Consolidated Subsidiary has paid or declared any dividends or other distributions with respect to its shares of beneficial interest and the Company is not in default under the terms of any class of shares of beneficial interest of the Company or any outstanding debt obligations; (iv) there has not been any change in the authorized or outstanding shares of beneficial interest of the Company (other than the issuance of Common Shares to the trustees, employees and officers of the Company and its affiliates pursuant to the Company’s equity incentive plan and upon exchange or conversion of other outstanding securities) or any material change in the indebtedness of the Company (other than in the ordinary course of business and borrowings under existing or future bank lines of credit) and (v) there has not been any material adverse change, or any development involving or that may reasonably be expected to result in a Material Adverse Effect.

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

(x)             The Company has not distributed and will not distribute any offering material in connection with the offering and sale of the Primary Shares or the Option Shares, other than the Prospectus and the Registration Statement.

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

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

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

(bb)          Neither the Company nor any Consolidated Subsidiary is an “investment company”, a company “controlled” by an &ld