AGREEMENT OF SALE

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

3.       Purchase Price .

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

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

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

4.       Title .

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

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

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

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

5.       Representations and Warranties .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

6.       Due Diligence .

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

Promptly following the commencement of the Due Diligence Period, Seller shall provide the Buyer access to all records and