SECURITIES PURCHASE AGREEMENT

AMONG

CNL HOSPITALITY PARTNERS, L.P.

HERSHA HOSPITALITY TRUST

AND

HERSHA HOSPITALITY LIMITED PARTNERSHIP

DATED AS OF APRIL 21, 2003

                                TABLE OF CONTENTS
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ARTICLE 1 PURCHASE AND SALE OF PREFERRED UNITS . . . . . . . . . . . . . .     1

     1.1     Purchase and Sale . . . . . . . . . . . . . . . . . . . . . .     1
     1.2     Purchase Price. . . . . . . . . . . . . . . . . . . . . . . .     2
     1.3     Payment at First Closing, Second Closing or Subsequent
             Closings. . . . . . . . . . . . . . . . . . . . . . . . . . .     3

ARTICLE 2 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . .     3

     2.1     Representations and Warranties of HT and HLP. . . . . . . . .     3
     2.2     Representations and Warranties of CHP . . . . . . . . . . . .    26

ARTICLE 3 COVENANTS OF HT AND HLP. . . . . . . . . . . . . . . . . . . . .    28

     3.1     Covenants Relating to the Business of HT and HLP. . . . . . .    28
     3.2     Access and Information. . . . . . . . . . . . . . . . . . . .    31
     3.3     Notification of Certain Matters . . . . . . . . . . . . . . .    31
     3.4     Third Party Consents. . . . . . . . . . . . . . . . . . . . .    32
     3.5     Appointment of Observer to the HT Board of Trustees . . . . .    32
     3.6     Waiver of Anti-Takeover Statute . . . . . . . . . . . . . . .    32
     3.7     Insurance . . . . . . . . . . . . . . . . . . . . . . . . . .    32
     3.8     Use of Purchase Price; Use of Proceeds. . . . . . . . . . . .    33
     3.9     Legal Opinions. . . . . . . . . . . . . . . . . . . . . . . .    33
     3.10    Execution and Delivery of Excepted Holder Agreement . . . . .    33
     3.11    Registration Rights Agreement . . . . . . . . . . . . . . . .    33
     3.12    Existing Registration Rights. . . . . . . . . . . . . . . . .    33
     3.13    HLP Partnership Agreement . . . . . . . . . . . . . . . . . .    33
     3.14    Joint Venture Agreement . . . . . . . . . . . . . . . . . . .    33
     3.15    Filing of Articles Supplementary and Capital Stock Matters. .    34
     3.16    Stock Exchange Listing. . . . . . . . . . . . . . . . . . . .    34
     3.17    Certain Other Actions . . . . . . . . . . . . . . . . . . . .    34

ARTICLE 3A COVENANT OF CHP . . . . . . . . . . . . . . . . . . . . . . . .    35

     3A.1    Fairness Opinion. . . . . . . . . . . . . . . . . . . . . . .    36

ARTICLE 4 MUTUAL COVENANTS . . . . . . . . . . . . . . . . . . . . . . . .    36

     4.1     Additional Agreements . . . . . . . . . . . . . . . . . . . .    36
     4.2     Advice of Changes; SEC Filings. . . . . . . . . . . . . . . .    36

ARTICLE 5 CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . .    37

     5.1     Conditions to Each Party's Obligation . . . . . . . . . . . .    37
     5.2     Conditions to Obligations of CHP at the First Closing . . . .    37


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     5.3     Conditions to Obligations of HT and HLP at the First Closing.    39
     5.4     Conditions to Obligations of CHP at the Second Closing
             and each Subsequent Closing . . . . . . . . . . . . . . . . .    40
     5.4A    Condition to Obligations of CHP at each Subsequent Closing. .    41
     5.5     Conditions to Obligations of HT and HLP at the Second
             Closing and Each Subsequent Closing . . . . . . . . . . . . .    41

ARTICLE 6 CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . .    42

     6.1     Closing . . . . . . . . . . . . . . . . . . . . . . . . . . .    42
     6.2     Actions to Occur at the First Closing . . . . . . . . . . . .    43
     6.3     Actions to Occur at the Second Closing and Each
             Subsequent Closing. . . . . . . . . . . . . . . . . . . . . .    44

ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER. . . . . . . . . . . . . . . .    45

     7.1     Termination Prior to First Closing. . . . . . . . . . . . . .    45
     7.2     Termination Subsequent to First Closing . . . . . . . . . . .    46
     7.3     Effect of Termination Prior to First Closing. . . . . . . . .    47

ARTICLE 8 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . .    47

     8.1     Indemnification . . . . . . . . . . . . . . . . . . . . . . .    47
     8.2     Limitations on Indemnification for Breaches of
             Representations and Warranties. . . . . . . . . . . . . . . .    48
     8.3     Indemnification Procedures. . . . . . . . . . . . . . . . . .    49
     8.4     Tax Related Adjustments . . . . . . . . . . . . . . . . . . .    50

ARTICLE 9 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . .    50

     9.1     Survival of Representations, Warranties, and Covenants. . . .    50
     9.2     Amendment and Modification. . . . . . . . . . . . . . . . . .    51
     9.3     Waiver of Compliance. . . . . . . . . . . . . . . . . . . . .    51
     9.4     Specific Performance. . . . . . . . . . . . . . . . . . . . .    51
     9.5     Severability. . . . . . . . . . . . . . . . . . . . . . . . .    51
     9.6     Expenses and Obligations. . . . . . . . . . . . . . . . . . .    52
     9.7     Parties in Interest . . . . . . . . . . . . . . . . . . . . .    52
     9.8     Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .    52
     9.9     Counterparts. . . . . . . . . . . . . . . . . . . . . . . . .    53
     9.10    Entire Agreement. . . . . . . . . . . . . . . . . . . . . . .    53
     9.11    Governing Law; Choice of Forum. . . . . . . . . . . . . . . .    53
     9.12    Public Announcements. . . . . . . . . . . . . . . . . . . . .    54
     9.13    Assignment. . . . . . . . . . . . . . . . . . . . . . . . . .    54
     9.14    Headings. . . . . . . . . . . . . . . . . . . . . . . . . . .    54
     9.15    Articles, Sections. . . . . . . . . . . . . . . . . . . . . .    54


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EXHIBITS:

Exhibit A           --     Form of Legal Opinion of HT's Counsel
Exhibit B           --     Form of Legal Tax Opinion of HT's Tax Counsel
Exhibit C           --     Form of BSA Legal Opinion
Exhibit D           --     Form of Excepted Holder Agreement
Exhibit E           --     Form of Registration Rights Agreement
Exhibit F           --     Form of Registration Rights Acknowledgement
Exhibit G           --     Form of Second Amendment to HLP Limited Partnership
                              Agreement
Exhibit H           --     Form of Joint Venture Agreement
Exhibit I           --     Form of Articles Supplementary
Exhibit J                  List of CHP's Officers, Directors and Employees

DISCLOSURE SCHEDULES:

Schedule 2.1(a)     --     HT Subsidiaries and Non-Subsidiary Investments
Schedule 2.1(b)     --     Options and Certain Restrictions
Schedule 2.1(c)     --     Conflicts, Violations or Defaults and Consents of
                              Governmental Entities
Schedule 2.1(f)     --     Certain Changes or Events
Schedule 2.1(g)     --     Undisclosed Liabilities
Schedule 2.1(h)     --     Defaults and Violations
Schedule 2.1(i)     --     Officers with Knowledge
Schedule 2.1(j)     --     HT Litigation
Schedule 2.1(k)     --     Taxes
Schedule 2.1(l)     --     ERISA Matters
Schedule 2.1(m)     --     Labor and Employment Matters
Schedule 2.1(o)     --     Environmental Matters
Schedule 2.1(p)     --     Properties
Schedule 2.1(q)     --     Insurance
Schedule 2.1(r)     --     Brokers
Schedule 2.1(t)     --     Material Contracts
Schedule 2.1(u)     --     Information Systems


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                             INDEX OF DEFINED TERMS
                             ----------------------

Term                                    Defined in Section:
----                                    --------------------

Affiliate                               2.1(d)
Agreement                               Preamble
Amended and Restated HLP Partnership    3.13
Agreement
Amex                                    3.16
Articles Supplementary                  2.1(a)(i)
Balance Sheet Date                      2.1(f)
Basket                                  8.2(a)
BSA Opinion                             3.9
Business Day                            6.1(b)
CERCLA                                  2.1(o)(viii)
CHP                                     Preamble
CHP Indemnified Parties                 8.1(a)
CHP Litigation                          2.2(c)
CHP Order                               2.2(c)
CHP's Cap                               8.2(a)
Claim                                   8.3(a)(i)
Class A Shares                          2.1(b)(i)
Class B Shares                          2.1(b)(i)
Closings                                6.1(a)
Closing Date                            6.1(a)
Closing Dates                           6.1(a)
Contributed Leases                      3.18(b)
Control                                 2.1(d)
Cure Period                             7.1(b)(i)
Delivery Date                           2.1(a)(i)
Discretionary Capital                   3.8
Encumbrances                            2.1(b)(ii)
Environmental Laws                      2.1(o)
EPA                                     2.1(o)(viii)
ERISA                                   2.1(l)(i)
Excepted Holder Agreement               3.10
Exchange Act                            2.1(c)(iii)
Expenses                                8.1(a)(iii)
Expense Reimbursement                   7.3(b)
First Closing                           1.1(a)
First Closing Units                     1.1(a)
Fully Diluted Interest in HT            8.1(a)(iv)
GAAP                                    2.1(d)
Governmental Entity                     2.1(c)(iii)
Ground Lease                            2.1(p)(ii)


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Ground Leases                           2.1(p)(ii)
Ground Lessee                           2.1(p)(ii)
Ground Lessees                          2.1(p)(ii)
Hazardous Materials                     2.1(o)
HHMLP                                   3.18(a)
HLP                                     Preamble
HLP Certificate of Limited Partnership  2.1(a)(i)
HLP Partnership Agreement               2.1(a)(i)
HLP Ordinary Units                      2.1(b)(i)
HT                                      Preamble
HT's Cap                                8.2(a)
HT Common Stock                         2.1(b)(i)
HT Common Stock Equivalents             2.1(b)(i)
HT Declaration of Trust                 2.1(a)(i)
HT Disclosure Schedule                  2.1(a)(i)
HT Employee Benefit Plans               2.1(l)(iii)
HT ERISA Affiliate                      2.1(l)(i)
HT Fee Property                         2.1(p)(i)
HT Fee Properties                       2.1 (p)(i)
HT Franchise Agreements                 2.1(t)(vi)
HT Indemnified Parties                  8.1(b)
HT Intangible Property                  2.1(n)
HT Leasehold Property                   2.1(p)(i)
HT Leasehold Properties                 2.1(p)(i)
HT Litigation                           2.1(j)
HT Option Plan                          2.1(b)(i)
HT Order                                2.1(j)
HT Pension Plans                        2.1(l)(i)
HT Property                             2.1(p)(i)
HT Properties                           2.1(p)(i)
HT Permits                              2.1(h)(i)
HT Preferred Stock                      2.1(b)(i)
HT SEC Documents                        2.1(d)
HT TRS                                  3.18(a)
HT Trustees Plan                        2.1(b)(i)
HSR Act                                 2.1(c)(iii)
HW Opinion                              3.9
HW Tax Opinion                          3.9
Information Systems                     2.1(u)
Joint Venture Agreement                 3.14
Knowledge                               2.1(h)(i)
Losses                                  8.1(a)(i)
Material Adverse Effect                 2.1(a)(ii)
Material Contracts                      2.1(t)(xvi)
MGCL                                    3.6


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Observer Resolution                     5.2(d)
Person                                  2.1(d)
Preferred Units                         Recitals
Projections                             2.1(v)
Property Restrictions                   2.1(p)(iii)
Purchase Price                          1.2
REIT                                    2.1(k)(ii)
REIT Training                           3.19
Registration Rights Acknowledgement     3.12
Registration Rights Agreement           3.11
Release                                 2.1(o)
Remedial Action                         2.1(o)
SDAT                                    3.15(a)
SEC                                     2.1(c)(iii)
Second Closing                          1.1(b)
Second Closing Date                     1.3
Second Closing Units                    1.1(b)
Securities Act                          2.1(c)(iii)
Series A Preferred Shares               2.1(b)(i)
Space Lease                             2.1(p)(vii)
Space Leases                            2.1(p)(vii)
Subsequent Closing                      1.1(c)
Subsequent Closing Date                 1.3
Subsequent Closing Units                1.1(c)
Subsidiary                              2.1(a)(iii)
Tax Protection Agreements               2.1(k)(viii)
Transaction Documents                   2.1(b)(ii)
Voting Debt                             2.1(b)(i)

SECURITIES PURCHASE AGREEMENT

WHEREAS, upon the terms and subject to the conditions of this Agreement, CHP desires to purchase and HLP desires to issue and sell preferred limited partnership interests in the form of HLP's Preferred Units (as defined in
Section 1.1) having the rights, privileges and preferences as agreed to by the parties hereto;

WHEREAS, HT, the general partner of HLP, has approved the issuance and sale of the Preferred Units and the general partner of CHP has approved the purchase of the Preferred Units pursuant to the terms of this Agreement and the other transactions contemplated hereby;

WHEREAS, simultaneously herewith, HLP and CHP are entering into a Joint Venture Agreement (as defined herein), pursuant to which HLP and CHP will acquire and operate real estate projects;

WHEREAS, HT, HLP and CHP desire to make certain representations, warranties, agreements and covenants in respect of the purchase and sale of the Preferred Units (as defined herein) and also to prescribe various conditions thereto, all as hereinafter set forth;

NOW, THEREFORE, in consideration of the mutual premises, representations, warranties, agreements and covenants contained in this Agreement, the parties hereto, intending to be legally bound, agree as follows:

ARTICLE 1

(c) subject to the provisions contained immediately below, at one or more subsequent closings, which shall occur within 15 Business Days (as hereinafter defined) after the date on which HLP provides written notice to CHP

All references to the number of Preferred Units which CHP is obligated to purchase hereunder and HLP is obligated to issue and sell hereunder, and all references to the Purchase Price (as defined herein) shall, in all instances, be subject to equitable adjustment from time to time for subdivisions and combinations of HT's Class A Shares (as defined herein) and for transactions of similar effect. For example, in the event of a subdivision of Class A Shares, the Purchase Price shall proportionately be decreased and the remaining number of Preferred Units that CHP is obligated to purchase shall proportionately be increased, and in the event of a combination of Class A Shares, the Purchase Price shall proportionately be increased and the remaining number of Preferred Units that CHP is obligated to purchase shall proportionately be decreased.

ARTICLE 2

adverse effect on the (A) business, (B) assets, (C) liabilities, (D) financial condition, or (E) results of operations (including, but not limited to, operating income and cash flow) of HT, HLP and all Subsidiaries taken as a whole.

having the right to vote (or convertible into securities having the right to vote) on any matters on which holders of equity interests in HT, HLP or any Subsidiary, as applicable, may vote.

the HT Disclosure Schedule, there are no restrictions on HT's or HLP's ability to vote the equity interests of any Subsidiary. Except as set forth on Schedule 2.1(b) of the HT Disclosure Schedule, all dividends or distributions on securities of HT or HLP that have been declared or authorized prior to the date hereof have been paid in full. Except as set forth on Schedule 2.1(b) of the HT Disclosure Schedule or in the HT SEC Documents, there is no restriction on the ability of HLP or any Subsidiary to distribute cash to their respective parent companies.

(i) Each of HT, HLP and each Subsidiary has all requisite power and authority to enter into this Agreement and the Transaction Documents to which it is a party, and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Transaction Documents to which HT, HLP and each Subsidiary is a party, if any, and the consummation of the transactions contemplated hereby or thereby have been duly authorized by all necessary action on the part of the governing bodies of HT, HLP and such Subsidiary, as applicable. This Agreement and the Transaction Documents to which HT, HLP or any Subsidiary is a party have been duly executed and delivered by HT, HLP or such Subsidiary and, assuming this Agreement and the Transaction Documents to which CHP is a party constitute the valid and binding obligations of CHP, constitute valid and binding obligations of HT, HLP and such Subsidiary, are enforceable in accordance with their terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization, moratorium and other laws of general applicability relating to or affecting creditors' rights and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

(ii) Except as set forth on Schedule 2.1(c) of the HT Disclosure Schedule, the execution and delivery of this Agreement and the Transaction Documents by HT, HLP and any Subsidiary, if applicable, do not, and the consummation of the transactions contemplated hereby or thereby, and compliance with the provisions hereof or thereof, will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both), under, or give rise to a right of termination, cancellation or acceleration of any material obligation or to the loss of a material benefit under, or give rise to a right of purchase under, or result in the creation of any Encumbrance upon any of the properties or assets of HT, HLP or any Subsidiary or require the consent or approval of any third party, or otherwise result in a material detriment to HT, HLP or any Subsidiary, under any provision of (A) the HT Declaration of Trust, HT's bylaws, the HLP Partnership Agreement, the HLP Certificate of Limited Partnership or any provision of the comparable charter or organizational documents of any Subsidiary, (B) any loan or credit agreement, note, bond, mortgage or indenture (or guarantee of same) entered into by HT, HLP or any Subsidiary and secured by a lien on any hotel owned by HT, HLP or any such Subsidiary, (C) any other loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise or license applicable to HT, HLP or any Subsidiary or their respective properties or assets, or any guarantee by HT, HLP or any Subsidiary of any of the foregoing, (D) any joint venture or other ownership arrangement or (E) assuming the consents, approvals, authorizations or permits and filings or notifications referred to in Section 2.1(c)(iii) are duly and timely obtained or made, any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to HT, HLP or any Subsidiary or any of their respective properties or assets, other than, in the case of clauses (C), (D) and (E), any such conflicts, violations, defaults, rights, Encumbrances or detriments that, individually or in

the aggregate, (1) have not had, and could not reasonably be expected to have, a Material Adverse Effect, or (2) would not, or could not reasonably be expected to, materially impair the ability of HT, HLP or any Subsidiary to perform its obligations hereunder or under any Transaction Document or prevent the consummation of any of the transactions contemplated hereby or thereby.

(i) any event, occurrence, development or state of circumstances or facts which, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect, other than those occurring as a result of general economic or financial conditions;

(ii) any (i) authorization, declaration, payment or setting aside of any dividend or other distribution in respect of any of its equity interests, capital stock, partnership interests or other securities of HT, HLP or any Subsidiary thereof, (ii) split, combination, division, distribution, or reclassification any of HT, HLP or any Subsidiary's equity securities, or (iii) redemption, purchase, or other acquisition any of their respective equity securities.

(iii) any (a) incurrence of indebtedness for borrowed money (except (A) to finance any transactions or other expenditures permitted by this Agreement and regular borrowings under credit facilities made in the ordinary course of HT's cash management practices, and (B) refinancings of existing debt or guarantees of any such indebtedness, or issuance or sale of any debt securities or warrants or rights to acquire any debt securities of HT, HLP or any Subsidiary or guarantees of any debt securities of others, (b) creation of any mortgages, liens, security interests or similar other Encumbrances on the property of HT, HLP or any Subsidiary in connection with any indebtedness thereof; (c) assumption, guarantee, endorsement, or other consent to assumption of liability or responsibility (whether directly, contingently, or otherwise) for the obligations of any other Person; or (d) making of loans, advances, or capital contributions to, or investments in, any Person other than a Subsidiary;

(iv) any mortgage, pledge, or Encumbrance of any assets of HT, HLP or any Subsidiary having a fair market value, individually or in the aggregate, in excess of $250,000;

(v) any acquisition, disposition or similar transaction by HT, HLP or any Subsidiary involving any material assets, properties or liabilities having a fair market value, individually or in the aggregate, in excess of $250,000, whether by merger, purchase or sale of stock, purchase or sale of assets or otherwise;

(vi) any damage, destruction or other casualty loss (whether or not covered by insurance) resulting in any Material Adverse Effect;

(vii) any (i) making or rescission of any material express or deemed election relating to Taxes (as defined herein) (except as required by law or necessary to preserve HT's status as a REIT or the status of any of HLP or any Subsidiary as a partnership or a disregarded entity for federal income Tax purposes or as a qualified REIT subsidiary under Section 856(i) of the Code or as a taxable REIT subsidiary under Section 856(l) of the Code), (ii) settlement or compromise of any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, except any settlements or compromises relating to contests or protests relating to property Tax valuations undertaken by HT, HLP or any Subsidiary in the ordinary course of business, or (iii) change in any material respect any of its methods of reporting income or deductions for Federal income Tax purposes from those employed in the preparation of its federal income Tax returns that have been filed for prior

taxable years, except as may be required by applicable law or except for changes that will not materially and adversely affect HT, HLP or any Subsidiary;

(viii) any (i) grant of any increase in the compensation of, or payment of any bonus (other than regularly scheduled bonuses as set forth on Schedule 2.1(f) of the HT Disclosure Schedule) or noncompetition payments to, any of its directors, trustees, officers or employees; (ii) payment or agreement to pay to any director, trustee, officer or employee, whether past or present, any pension, retirement or other employee benefit; (iii) new, or amendment of any existing, employment or severance or termination agreement with any director, trustee, officer or employee, either individually or as part of a class of similarly situated Persons; (iv) establishment, adoption or any amendment of any existing, (A) "employee benefit plan," as such term is defined in section 3(3) of ERISA (including, but not limited to, employee benefit plans, such as foreign plans, which are not subject to the provisions of ERISA), (B) personnel policy, stock option plan, stock purchase plan, stock appreciation rights, phantom stock plan, collective bargaining agreement, bonus plan or arrangement, incentive award plan or arrangement, vacation policy, severance pay plan, policy or agreement, deferred compensation agreement or arrangement, executive compensation or supplemental income arrangement, consulting agreement, employment agreement or other employee benefit plan, agreement, arrangement, program, practice or understanding or (C) collective bargaining agreement; or
(v) any resignation, termination or removal of any executive officers or employees listed on Schedule 2.1(f) of the HT Disclosure Schedule, or loss of significant personnel of HT, HLP or any Subsidiary or material change in the terms and conditions of the employment of any such executive officer or employee;

(ix) any labor dispute, other than routine individual grievances, or any activity or proceeding by a labor union or representative thereof to organize any employees of HT, HLP or any Subsidiary, which employees were not subject to a collective bargaining agreement at the Balance Sheet Date, or any lockouts, strikes, slowdowns, work stoppages or threats thereof by or with respect to any employees of HT, HLP or any Subsidiary; or

(x) any other transaction or commitment made, or any contract or agreement entered into, by HT, HLP or any Subsidiary or any relinquishment by HT, HLP or any Subsidiary of any contract or other right, in either case, material to HT, HLP or any Subsidiary, other than transactions and commitments in the ordinary course of business consistent with past practices and those contemplated by this Agreement or the Transaction Documents.

instruments, entered into any agreements, commitments or arrangements or incurred any obligations that could reasonably be expected to have the effect of providing HT with "off balance sheet" financing, including, without limitation, any sale-leaseback arrangements, "synthetic leases", shared trust arrangements and "off balance sheet debt".

Subsidiary. Except as set forth on Schedule 2.1(j) of the HT Disclosure Schedule, there is no action, suit, proceeding or investigation that HT, HLP or any Subsidiary currently intends to initiate by filing a complaint with a Governmental Entity. Except as set forth on Schedule 2.1(j) of the HT Disclosure Schedule, there are no actions, charges, indictments or investigations of the trustees, officers, employees or agents of HT, HLP or any Subsidiary, whether pending or, to the Knowledge of HT, HLP or any Subsidiary, threatened, which involves allegations of criminal violation of any Federal, state or local statute, law or ordinance, in each case acting on behalf of HT, HLP or any Subsidiary.

Federal income Tax purposes as (i) a partnership and not as a corporation or
(ii) a disregarded entity.

(iii) All Taxes which HT, HLP, or any Subsidiary are required by law to withhold or collect, including Taxes required to have been withheld in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party and sales, gross receipts and use Taxes, have been duly withheld or collected and, to the extent required, have been paid over to the proper Governmental Entities or are held in separate bank accounts for such purpose. There are no Encumbrances for Taxes upon the assets of HT, HLP or any Subsidiary except for statutory liens for Taxes not yet due.

(iv) The Tax returns of HT, HLP, and each Subsidiary are not being and have not been examined or audited by any taxing authority for any past year or period.

(v) Neither HT, HLP, nor any Subsidiary (A) has filed a consent under Section 341(f) of the Code concerning collapsible corporations, or (B) is a party to any Tax allocation or sharing agreement.

(vi) Neither HT, HLP, nor any Subsidiary has any liability for the Taxes of any Person other than for themselves (A) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law), (B) as a transferee or successor, (C) by contract, or (D) otherwise.

(vii) Neither HT, HLP, nor any Subsidiary had made any payments, is obligated to make any payments, or is a party to an agreement that could obligate any of them to make any payments that will not be deductible under Section 280G of the Code.

Except as set forth on Schedule 2.1(l) of the HT Disclosure Schedule or in the HT SEC Documents:

(ii) No HT Pension Plan is subject to Title IV of ERISA.

(iv) Each HT Employee Benefit Plan and HT Pension Plan, related trust (or other funding or financing arrangement) and all amendments thereto are listed on Schedule 2.1(l) of the HT Disclosure Schedule, true and complete copies of which have been made available to CHP, as have the most recent summary plan descriptions, administrative service agreements, Form 5500s and, with respect to any HT Pension Plan intended to be qualified pursuant to
Section 401 of the Code, a current determination letter.

(v) HT Employee Benefit Plans and HT Pension Plans have been administered and maintained, in all material respects, in accordance with their terms and with all provisions of ERISA and the qualification requirements of
Section 401(a) of the Code (including rules and regulations thereunder) and other applicable Federal and state law. There is no liability for breaches of fiduciary duty in connection with HT Employee Benefit Plans and HT Pension Plans, and neither HT nor any Subsidiary or any "party in interest" or "disqualified person" with respect to HT Employee Benefit Plans and HT Pension Plans has engaged in a "prohibited transaction" within the meaning of Section 4975 of the Code or Section 406 of ERISA.

(vi) There are no actions, suits or claims pending (other than routine claims for benefits) or, to the Knowledge of HT, HLP or any Subsidiary, threatened against, or

with respect to, HT Employee Benefit Plans or HT Pension Plans or their assets that would have a Material Adverse Effect.

(vii) Except as described on Schedule 2.1(l) of the HT Disclosure Schedule, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (A) result in any payment (including any retention bonuses or noncompetition payments) becoming due to any employee or group of employees of HT, HLP or any Subsidiary; (B) increase any benefits otherwise payable under any HT Employee Benefit Plan or HT Pension Plan; or (C) result in the acceleration of the time of payment or vesting of any such benefits. Except as described on Schedule 2.1(l) of the HT Disclosure Schedule, there are no severance agreements, noncompetition agreements or employment agreements between HT, HLP or any Subsidiary and any employee of HT, HLP or any Subsidiary. True and complete copies of all severance agreements and employment agreements described on Schedule 2.1(l) of the HT Disclosure Schedule have been provided to CHP.

(viii) Neither HT, HLP nor any Subsidiary has any consulting agreement or arrangement with any Person involving compensation in excess of $200,000 except as are terminable upon one month's notice or less.

(ix) Neither HT, HLP nor any Subsidiary nor any HT ERISA Affiliate contributes to, or has an obligation to contribute to, and has not within six years prior to the Effective Time contributed to, or had an obligation to contribute to, a multiemployer plan within the meaning of Section 3(37) of ERISA.

(x) No stock or other security issued by HT, HLP or any Subsidiary forms or has formed a material part of the assets of any HT Employee Benefit Plan or HT Pension Plan.

(xi) HT, HLP, each Subsidiary and each ERISA Affiliate has complied with the requirements of Section 4980B of the Code and Parts 6 and 7 of Subtitle B of Title I of ERISA regarding health care coverage under HT Employee Benefit Plans.

(xii) No amount has been paid by HT, HLP, any Subsidiary or any of its ERISA Affiliates, and no amount is expected to be paid by HT, HLP or any of its ERISA Affiliates, which would be subject to the provisions of 162(m) of the Code such that all or a part of such payments would not be deductible by the payor.

(xiii) As to any HT Pension Plan intended to be qualified pursuant to Section 401(a) of the Code there has been no termination or partial termination of the plan within the meaning of Section 411(d)(3) of the Code.

(xiv) No act, omission or transaction has occurred which would result in the imposition on HT, HLP or any Subsidiary of breach of fiduciary duty liability damages pursuant to Section 409 of ERISA, a civil penalty pursuant to Section 502 of ERISA or a Tax imposed pursuant to Chapter 43 of Subtitle D of the Code.

(xv) To the Knowledge of HT, HLP, and each Subsidiary there is no matter pending with respect to any HT Pension Plan or HT Employee Benefit Plan before the Internal Revenue Service, the Department of Labor or the Pension Benefit Guaranty Corporation.

(xvi) Each HT Employee Benefit Plan may be unilaterally amended or terminated in its entirety by HT, HLP, or each Subsidiary, as the case may be, without liability except as to benefits accrued thereunder prior to amendment or termination.

(xvii) No Employee Benefit Plan provides retiree medical or retiree life insurance benefits to any Person and neither HT, HLP nor any Subsidiary is contractually or otherwise obligated (whether or not in writing) to provide any Person with life insurance or medical benefits upon retirement or termination of employment, other than as referenced by the provisions of Section 601 through 608 of ERISA and Section 4980B of the Code.

(xviii) In connection with the consummation of the transaction contemplated by this Agreement, no payments have or will be made which, in the aggregate, would result in the imposition of the sanctions imposed under Sections 280G and 4999 of the Code.

(i) Neither HT, HLP nor any Subsidiary is a party to any collective bargaining agreement or other current labor agreement with any labor union or organization, and there is no current union representation question involving employees of HT, HLP or any Subsidiary, nor does HT, HLP or any Subsidiary have any Knowledge of any activity or proceeding of any labor organization (or representative thereof) or employee group (or representative thereof) to organize any such employees.

(ii) There is no unfair labor practice charge or grievance arising out of a collective bargaining agreement or other grievance procedure pending, or, to the Knowledge of HT, HLP or any Subsidiary, threatened against HT, HLP or any Subsidiary.

(iii) There is no complaint, lawsuit or proceeding in any forum by or on behalf of any present or former employee, any applicant for employment or any classes of the foregoing alleging breach of any express or implied contract of employment, any law or regulation governing employment or the termination thereof or other discriminatory, wrongful or tortious conduct in connection with the employment relationship pending, or, to the Knowledge of HT, HLP or any Subsidiary, threatened against HT, HLP or any Subsidiary.

(iv) There is no strike, slowdown, work stoppage or lockout pending, or, to the Knowledge of HT, HLP or any Subsidiary, threatened, against or involving HT, HLP or any Subsidiary.

(v) Each of HT, HLP and each Subsidiary has complied with all legal obligations with respect to the employment authorization of its workforce, including without limitation, the timely and accurate completion of the Form I-9, Employment Eligibility Verification Form, for each of its United States employees as well as the maintenance of

appropriate public access file documents for each employee classified as an H-1B specialty occupation worker. Neither HT, HLP or any Subsidiary has any Knowledge that any of its employees may not lawfully be employed by it.

(vi) HT, HLP and each Subsidiary is in material compliance with all applicable laws respecting employment and employment practices, terms and conditions of employment, wages, hours of work and occupational safety and health.

(vii) There is no proceeding, claim, suit, action or governmental investigation pending or, to the Knowledge of HT, HLP or any Subsidiary, threatened, with respect to which any current or former trustee, officer, employee or agent of HT, HLP or any Subsidiary is or may be entitled to claim indemnification from HT, HLP or any Subsidiary pursuant to the HT Declaration of Trust, HT's bylaws, HLP Partnership Agreement, or any provision of a comparable charter or organizational document of any Subsidiary, or any indemnification agreement to which HT, HLP or any Subsidiary is a party or under applicable law.

Except as disclosed on Schedule 2.1(o) of the HT Disclosure Schedule or the HT SEC Documents:

(i) HT, HLP and each Subsidiary now comply, and shall until the First Closing Date, the Second Closing Date and all Subsequent Closing Dates, continue to comply, with all Environmental Laws;

(ii) HT, HLP and each Subsidiary has and, until the First Closing Date, the Second Closing Date and all Subsequent Closing Dates, shall maintain, all permits, licenses and registrations required by the Environmental Laws, and has made and, as of each Closing Date, will have provided or made all applicable training, filings, postings, reports or notices required thereby;

(iii) HT, HLP and each Subsidiary have not received any communication, whether written or otherwise, from any person (A) regarding HT's, HLP's, or any Subsidiary's alleged noncompliance with or liability under any Environmental Law, (B) recommending or directing HT, HLP, or each Subsidiary to undertake Remedial Action (as defined herein), (C) regarding any Release or threatened Release of a Hazardous Material, or (D) regarding the presence of toxic mold, human pathogens, or other disease causing agents on the HT Property (as defined herein);

(iv) HT, HLP and each Subsidiary (A) do not have any outstanding contracts with any other Person respecting compliance with the Environmental Laws, Remedial Action, a Release or threatened Release of a Hazardous Material or for the assessment or removal and remediation of toxic mold, human pathogens, and other disease causing agents, and (B) have not assumed responsibility for the environmental liabilities of any another Person;

(v) To their Knowledge, HT, HLP and each Subsidiary do not have any contingent liability in connection with alleged violations of worker safety laws, the Release of Hazardous Material (whether on-site or off-site) or employee or third party exposure to Hazardous Materials, toxic mold, human pathogens, or other disease causing agents;

(vi) HT's, HLP's and each Subsidiary's operations involving the generation, transportation, treatment, storage or disposal of hazardous or solid waste, as defined and regulated under 40 C.F.R. Parts 260-270 (in effect as of the date hereof) or any applicable state equivalent, comply with all applicable Environmental Laws in all material respects;

(vii) To the Knowledge of HT, HLP, and each Subsidiary, the HT Property (as defined herein), as well as all property formerly owned or operated by HT, HLP or each Subsidiary, do not contain underground storage tanks, surface impoundments, or aboveground storage tanks, or Hazardous Materials;

(ix) To the Knowledge of HT, HLP and each Subsidiary, the HT Properties do not contain toxic mold that might pose a risk to human health; and

(x) HT, HLP, and each Subsidiary has provided CHP with true and complete copies of final reports, letters, claims, demands, assessments, and documents in their possession or control that refer or relate to the Environmental Laws, Remedial Action, or any other matter material to the environmental condition of any HT Property.

and Property Restrictions disclosed on existing title reports or existing surveys (in either case, true, complete and correct copies of which title reports or surveys have been made available to CHP), and (C) mechanics', carriers', workers', repairmen's or materialmen's liens or other Encumbrances, Property Restrictions or other limitations of any kind, if any, which, individually or in the aggregate, do not materially detract from the value of or materially interfere with the present use or operation of, or access to, any of HT Property subject thereto or affected thereby, and does not have a Material Adverse Effect. Neither HT, HLP nor any Subsidiary has received notice of any default or breach by HT, HLP or any Subsidiary under any of the Encumbrances or Property Restrictions affecting the HT Properties.

Subsidiary has received any notice of cancellation or termination with respect to any existing material insurance policy of HT, HLP or any Subsidiary.

(i) Except as disclosed in the HT SEC Documents or on Schedule 2.1(t) to the HT Disclosure Schedule, there is no contract or agreement that purports to limit in any material respect the freedom of HT, HLP or any Subsidiary to engage in any line of business or to compete with any Person or purports to limit the names or the geographic location in which HT, HLP or any Subsidiary may conduct its business.

(ii) Except as set forth on Schedule 2.1(t) of the HT Disclosure Schedule or the HT SEC Documents, neither HT, HLP nor any Subsidiary is party to any agreement which would restrict any of them from prepaying any of their indebtedness without penalty or premium at any time or which requires any of them to maintain any amount of indebtedness with respect to any HT Properties.

(iii) Except as disclosed on Schedule 2.1(t) of the HT Disclosure Schedule or the HT SEC Documents, neither HT, HLP nor any Subsidiary is a party to any agreement relating to the management of any of the HT Properties which is not terminable by HT, HLP or such Subsidiary, as the case may be, without penalty on less than 30 days notice.

(iv) Schedule 2.1(t) of the HT Disclosure Schedule lists all agreements entered into by HT, HLP or any Subsidiary providing for the development or construction of hotels or other real estate properties or for the sale of, or option to sell, any HT Properties or the purchase of, or option to purchase, any real estate.

(v) Except as set forth on Schedule 2.1(t) of the HT Disclosure Schedule, neither HT, HLP nor any Subsidiary has any continuing contractual liability (A) for indemnification or otherwise under any agreement relating to the sale of real estate previously owned (other than non-material indemnification obligations relating to brokerage commissions, ordinary and customary title warranties, post-closing adjustments and customary contractual indemnification for pre-closing events upon sales of properties by HT, HLP or any Subsidiary), (B) to pay any additional purchase price for any of HT Properties, or (C) to make any prorations or adjustments to prorations (other than real estate Taxes) that may previously have been made with respect to any property currently or formerly owned by HT, HLP or any Subsidiary.

(vii) Except as set forth on Schedule 2.1(t) of the HT Disclosure Schedule or in the HT SEC Documents, there are no material outstanding contractual obligations of HT, HLP or any Subsidiary to provide any funds to, or make any investment (in the form of an advance, loan, extension of credit, capital contribution or otherwise) in any Person or which provide for the direct or indirect guarantee by HT, HLP or any Subsidiary (including by means of a take-or-pay or keepwell agreement) of the indebtedness, liabilities, obligations or financial condition of HT, HLP or any Subsidiary or any other Person.

(viii) Except as set forth on Schedule 2.1(t) of the HT Disclosure Schedule or in the HT SEC Documents, there are no indemnification agreements or guarantee agreements entered into by and between HT, HLP or any Subsidiary and any trustee, director, officer or limited partner.

(ix) Except as set forth on Schedule 2.1(t) of the HT Disclosure Schedule, there are no contracts, agreements, commitments or arrangements that grant registration rights other than the Registration Rights Agreement and the HLP Partnership Agreement.

(x) Except as set forth on Schedule 2.1(t) of the HT Disclosure Schedule, there are no contracts, agreements, commitments or arrangements that grant any preemptive rights to any holder of equity securities of HT, HLP or any Subsidiary or any other shareholder's agreements regarding HT, HLP or any Subsidiary's equity securities.

(xi) Except as set forth on Schedule 2.1(t) of the HT Disclosure Schedule or in the HT SEC Documents, there are no contracts, agreements, commitments or arrangements between HT, HLP or any Subsidiary or Hersha Hospitality Management, L.P., a Pennsylvania limited partnership, on the one hand and any Affiliate, on the other hand. All such transactions required to be disclosed on Schedule 2.1(t) of the HT Disclosure Schedule have been duly authorized, approved and ratified by HT in accordance with all applicable provisions of Maryland law, including but not limited to Section 2-419 of the Corporations and Associations Article of the Maryland Code.

(xii) Except as set forth on Schedule 2.1(t) of the HT Disclosure Schedule, there are no material contracts or other agreements relating to the acquisition by HT, HLP or any Subsidiary of any operating business or the capital stock or assets of any Person.

(xiii) Except as set forth on Schedule 2.1(t) of the HT Disclosure Schedule or in the HT SEC Documents, there are no material agreements, contracts or commitments relating to the employment of any person by HT, HLP or any Subsidiary, or any bonus, deferred compensation, pension, profit sharing, stock option, employee stock purchase, retirement or other employee benefit plan.

(xiv) Except as set forth on Schedule 2.1(t) of the HT Disclosure Schedule or in the HT SEC Documents, there are no material agreements, indentures or other

instruments which contain restrictions with respect to payment of dividends or any other distribution of the equity securities of HT, HLP or any Subsidiary.

(xv) Except as set forth on Schedule 2.1(t) of the HT Disclosure Schedule or in the HT SEC Documents, there are no material agreements, contracts or commitments relating to capital expenditures not yet made by HT, HLP or any Subsidiary.

(i) CHP has all requisite power and authority to enter into this Agreement and the Transaction Documents to which it is a party, and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Transaction Documents to which CHP is a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of its general partner. This Agreement and the Transaction Documents to which CHP is a party have been duly executed and delivered by CHP, and assuming this Agreement and the Transaction Documents to which any of HT, HLP or any Subsidiary is a party constitute the valid and binding obligation of HT, HLP or any Subsidiary, as the case may be, constitute a valid and binding obligation of CHP enforceable in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization, moratorium and other laws of general applicability relating to or affecting creditors' rights and to general principles of equity (regardless of whether such enforceability is considered in a proceeding at law/or in equity ).

(ii) The execution and delivery of this Agreement and the Transaction Documents to which CHP is a party do not, and the consummation of the transactions contemplated hereby and thereby, and compliance with the provisions hereof and thereof, will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under any provision of (A) CHP's Certificate of Limited Partnership or that certain Agreement of Limited Partnership by and between CHP and its partners, dated June 15, 1998, or (B) assuming the consents, approvals, authorizations or permits and filings or notifications referred to in Section 2.2(b)(iii) are duly and timely obtained or made, any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to CHP or any of its respective properties or assets, other than, in the case of clause (B), any such conflicts, violations or defaults, that, individually or in the aggregate, would not, or could not reasonably be expected to, impair the ability of CHP to perform its obligations hereunder or thereunder or prevent the consummation of any of the transactions contemplated hereby or thereby.

(iii) No consent, approval, order or authorization of, or registration, declaration or filing with, or permit from any Governmental Entity is required by or with respect to CHP in connection with the execution and delivery by CHP of this Agreement and any

Transaction Document to which it is a party or the consummation by CHP of the transactions contemplated hereby or thereby, except for: (A) the filing with the SEC of such reports under Section 13(a) or Section 16 of the Exchange Act and such other compliance with the Securities Act and the Exchange Act and the rules and regulations thereunder as may be required in connection with this Agreement and the transactions contemplated hereby; (B) any filings required under state securities laws; (C) such filings and approvals as may be required by any applicable state takeover laws or environmental laws; and (D) filings under the HSR Act, if applicable.

ARTICLE 3

(a) fail to conduct its or their business(es) in any manner except in the ordinary course consistent with past practice;

(b) amend, terminate, or fail to use all of its or their commercially reasonable efforts to renew any agreement or contract (provided however that neither HT, HLP nor any Subsidiary shall be required to renew any agreement or contract on terms that are materially less favorable to any of them), or default in any respect (or take or omit to take any action that, with or without giving of notice or the passage of time, would constitute a material default) under any agreement or contract or enter into any agreement or contract under which any party thereto becomes obligated to provide goods or services having a value of, or to make payments aggregating, $250,000 or more per year;

(c) fail to maintain all applicable HT Permits and authorities to do business;

(d) fail to use its and their commercially reasonable efforts to preserve intact its and their business organizations and relationships with third parties;

(e) other than a merger of a wholly-owned Subsidiary with or into HT or HLP or other Subsidiaries, merge or consolidate with or into any other Person, or otherwise dissolve, or liquidate;

(f) (i) hire or promote any individual to serve as an officer of HT, HLP or any Subsidiary or hire any employee or consultant if the aggregate annual compensation of such officer, employee or consultant exceeds $75,000;
(ii) grant any increase in the compensation of, or pay any bonus (other than regularly scheduled bonuses as previously disclosed in the HT SEC Documents) or noncompetition payments to, any of its directors, trustees, officers or employees; (iii) pay or agree to pay to any director, trustee, officer or employee, whether past or present, any pension, retirement or other employee benefit; (iv) enter into any new, or amend any existing, employment or severance or termination agreement with any director, officer or employee, either individually or as part of a class of similarly situated Persons; or (v) establish, adopt or enter into any new, or amend any existing, (A) "employee benefit plan," as such term is defined in section 3(3) of ERISA (including, but not limited to, employee benefit plans, such as foreign plans, which are not subject to the provisions of ERISA), (B) personnel policy, stock option plan, stock purchase plan, stock appreciation rights, phantom stock plan, collective bargaining agreement, bonus plan or arrangement, incentive award plan or arrangement, vacation policy, severance pay plan, policy or agreement, deferred compensation agreement or arrangement, executive compensation or supplemental income arrangement, consulting agreement, employment

agreement or other employee benefit plan, agreement, arrangement, program, practice or understanding or (C) collective bargaining agreement;

(g) acquire (including, without limitation, by merger, consolidation, or the acquisition of any equity interest or assets) any assets having a fair market value, individually or in the aggregate, in excess of $250,000;

(h) sell (whether by merger, consolidation or sale of any equity interests or assets, except for transactions permitted under Section 3.1(e)) or otherwise dispose of any real HT Property;

(i) except as set forth on Schedule 2.1(t) of the HT Disclosure Schedule, mortgage, pledge, or subject to any material Encumbrance, any assets of HT, HLP or any Subsidiary having a fair market value, individually or in the aggregate, in excess of $250,000;

(j) fail to pay or otherwise satisfy (except if being contested in good faith) any material accounts payable, liabilities, or obligations when due and payable other than on a basis, and within the time, consistent with past practice;

(k) (i) authorize, declare, pay or set aside for payment any dividends on or make other distributions in respect of, any of its equity interests, capital stock or partnership interests or other securities of HT, HLP or any Subsidiary thereof, (ii) split, combine, divide, distribute, or reclassify any of its equity securities, or (iii) directly or indirectly, redeem, purchase, or otherwise acquire any of its equity securities, except in the case of clause (i) above, customary (no more than $0.18 per share or such other amount as may be necessary to allow HT to maintain its status as a REIT) quarterly cash dividends declared and paid in respect of HT Common Stock so long as HT is not in default of its obligations to pay quarterly dividends on the Series A Preferred Shares or quarterly distributions on the Preferred Units;

(l) sell, issue, pledge, dispose of, encumber, or deliver (whether through the issuance or granting of any options, warrants, commitments, subscriptions, rights to purchase or otherwise) any equity or other ownership interests or income/loss participations or shares of any class or series of stock of HT, HLP or any Subsidiary or any securities convertible into or exercisable or exchangeable for any of the above (other than the issuance of certificates in replacement of lost certificates), any Voting Debt or other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any equity or other ownership interests or income/loss participations or shares of Voting Debt or other voting securities or convertible securities, other than the issuance of (i) HT Common Stock upon the exercise of stock options that were outstanding on the date hereof; (ii) HT Common Stock upon the conversion of HT Common Stock Equivalents that were outstanding on the date hereof; or (iii) HT Common Stock upon the conversion of HLP Ordinary Units that were outstanding on the date hereof;

(m) change or amend the HT Declaration of Trust, HT's bylaws, the HLP Certificate of Limited Partnership, the HLP Partnership Agreement or any other organizational document of HT, HLP, or any Subsidiary;

(n) (i) incur any indebtedness for borrowed money (except (A) to finance any transactions or other expenditures permitted by this Agreement (including those referred to in Section 3.1(g)) and regular borrowings under credit facilities made in the ordinary course of HT's cash management practices, and (B) refinancings of existing debt or guarantees of any such indebtedness, or issue or sell any debt securities or warrants or rights to acquire any debt securities of HT, HLP or any Subsidiary or guarantee any debt securities of others, (ii) create any mortgages, liens, security interests or similar other Encumbrances on the property of HT, HLP or any Subsidiary in connection with any indebtedness thereof; (iii) assume, guarantee, endorse, or otherwise become liable or responsible (whether directly, contingently, or otherwise) for the obligations of any other Person; or (iv) make any loans, advances, or capital contributions to, or investments in, any Person;

(o) (i) make or rescind any material express or deemed election relating to Taxes (except as required by law or necessary to preserve HT's status as a REIT or the status of any of HLP or any Subsidiary as a partnership or a disregarded entity for Federal income Tax purposes or as a qualified REIT subsidiary under Section 856(i) of the Code or as a taxable REIT subsidiary under Section 856(l) of the Code) unless it is reasonably expected that such action will not materially and adversely affect HT, HLP or any Subsidiary, including elections for any and all joint ventures, partnerships, limited liability companies or other investments where HT has the capacity to make such binding election, (ii) settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, except where such settlement or compromise will not materially and adversely affect HT, HLP or any Subsidiary and except any settlement or compromise relating to contests or protests relating to property Tax valuations undertaken by HT, HLP or any Subsidiary in the ordinary course of business, or (iii) change in any material respect any of its methods of reporting income or deductions for Federal income Tax purposes from those employed in the preparation of its Federal income Tax returns that have been filed for prior taxable years, except as may be required by applicable law or except for changes that will not materially and adversely affect HT, HLP or any Subsidiary;

(p) engage in any transactions with any of its Affiliates other than transactions approved by CHP in writing or expressly contemplated hereby or by the Transaction Documents;

(q) terminate the services of its or their current officers and employees or terminate or in any way materially damage or impair its relationship with its or their customers, suppliers and others having business dealings with it;

(r) authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of HT, HLP or any Subsidiary, provided that dispositions in accordance with Section 3.1(h) hereof shall not be deemed a partial liquidation;

(s) make any changes in its or their accounting methods which would be required to be disclosed under GAAP or the rules and regulations of the SEC, except as required by law, rule, regulation or GAAP;

(t) materially amend or terminate, or waive compliance with the terms of or breaches under, any Material Contract, or enter into a new contract, agreement or arrangement

not listed on Schedule 2.1(t) of the HT Disclosure Schedule that, if entered into prior to the date hereof, would have been required to be listed on such schedule;

(u) take any action to increase the size of HT's Board of Trustees, remove any trustee or, except as expressly contemplated hereby, fill any vacancies created by the death, resignation or removal of any Trustee;

(v) take any action, the result of which is the withdrawal, resignation or removal of HT as the general partner of HLP; or

(w) agree, or make any commitment, orally or in writing, to take any action prohibited by this Agreement or which it is reasonably foreseeable could cause a breach of any of the representations or warranties or conditions or covenants contained herein.

(a) Until the First Closing, HT shall, upon reasonable notice and in such manner as shall not unreasonably interfere with the conduct of the business of HT and HLP, afford CHP and its representatives (including CHP's accountants, business advisors and legal counsel) full access during normal business hours, to all properties, books, records, Phase I, Phase II and other environmental reports and Tax returns of HT, HLP and each Subsidiary and all other information with respect to its and their business(es), together with the opportunity to make copies of such books, records, Phase I, Phase II and other environmental reports and other documents and to discuss the business(es) of HT, HLP and each of their Subsidiaries with such officers, trustees, and employees of, and accountants and counsel for, HT, HLP and any Subsidiary as CHP deems reasonably necessary or appropriate for the purposes of familiarizing itself with HT, HLP and each Subsidiary. In furtherance of the foregoing, HT shall authorize and instruct its accountants to meet with CHP and its representatives, including CHP's independent public accountants, to discuss the business and accounts of HT, HLP and each Subsidiary and to make available to (with the opportunity to make copies by) CHP and its representatives, including its independent public accountants, all the work papers of its accountants related to their audit and review of the financial statements and Tax returns of HT, HLP and each Subsidiary.

(b) Until such time as CHP ceases to hold Class A Common Shares, Preferred Units and/or Series A Preferred Shares or any other class or series of shares of HT, HLP or Subsidiary equity, which on an as converted/exchanged basis, represents less than 5% of the HT Common Shares then issued and outstanding, on a fully diluted basis (which shall assume the conversion and/or exchange of all HT and HLP securities convertible into or exchangeable for HT Common Shares), within 30 days after the end of each calendar month, HT shall deliver to CHP the monthly operating statements for HT, HLP and each Subsidiary (in a form reasonably acceptable to CHP) prepared in accordance with GAAP consistent with past practices.

or inaccurate in any material respect at any time after the date hereof or (b) the failure of HT, HLP, or any Subsidiary or any officer, director, employee or agent of HT, HLP, or any Subsidiary to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it hereunder or under any Transaction Document. No such notification shall affect the representations or warranties of the parties or the conditions to their respective obligations hereunder. This covenant shall terminate at such time as each representation and warranty of HT, HLP and each Subsidiary set forth in Section 2.1 terminates pursuant to Section 9.1 hereof.

(b) HT shall reserve and shall keep available for issuance (i) at all times when any Series A Preferred Shares or Preferred Units are outstanding, solely for the purpose of effecting the conversion of the Series A Preferred Shares, the total number of shares of Class A Shares issuable upon conversion of the outstanding Series A Preferred Shares; (ii) at all times

when Preferred Units are outstanding, solely for the purpose of effecting the exchange of the Preferred Units, the total number of shares of Series A Preferred Shares and Class A Shares issuable upon exchange of the outstanding Preferred Units; (iii) at all times when Preferred Units are outstanding, the total number of shares of Class A Shares issuable upon the exchange of the outstanding Preferred Units; and (iv) shall take such action, if any, as is necessary or appropriate to cause the HT Declaration of Trust to be amended to provide for a sufficient number of authorized but unissued Series A Preferred Shares and Class A Shares to enable the foregoing issuances.

(b) HT and HLP shall, and shall cause each Subsidiary to, take (or refrain from taking, as applicable) such action(s) as are necessary to maintain the status of HT as a REIT for Federal income Tax purposes, through each Closing Date including making or rescinding any express or deemed election relative to Taxes (unless, in the case of HT, it is required by law or necessary to preserve the status of HT as a REIT for Federal income Tax purposes).

(c) In connection with any acquisition, disposition or other extraordinary corporate transaction involving HT, HLP or any Subsidiary, HT shall deliver to CHP, within a reasonable period of time prior to consummation of such transaction, a summary of the material terms and an analysis of the Federal and state Tax implications of such transaction.

(d) HT and HLP shall take, and shall cause each Subsidiary to take (or refrain from taking, as applicable) such action(s) as are necessary to maintain such disclosure controls and procedures to ensure that information required to be disclosed in HT's reports filed or submitted under the Exchange Act, is accumulated and communicated to HT's management, including HT's Chief Executive Officer and Chief Financial Officer to allow timely decisions regarding required disclosure.

(d) HT shall cause the HT TRS to enter into one or more management agreements with HHMLP for the operation of the hotels covered by the Contributed Leases.

ARTICLE 3A

ARTICLE 4

ARTICLE 5

Transaction Documents to which such Person is a party or to consummate the transactions contemplated hereby or thereby.

ARTICLE 6

(a) At the First Closing, CHP shall deliver to HT and HLP the following:

               (ii)     Certificates.  The  certificates referred to in Sections
                        ------------
5.3(a)  and  5.3(b);

               (iii)     Excepted  Holder  Agreement.  A counterpart copy of the
                         ---------------------------

Excepted Holder Agreement executed by CHP;

(b) At the First Closing, HT shall deliver to CHP the following:

               (ii)     Certificates.  The  certificates  described  in Sections
                        ------------
5.2(a)  and  5.2(b);

               (iii)    Third Party Consents.  The  original of each Consent, if
                        --------------------

any, pursuant to Section 5.2(c);

(a) At the Second Closing and each Subsequent Closing, CHP shall deliver to HT and HLP the following:

(b) At the Second Closing and each Subsequent Closing, HT shall deliver to CHP the following:

ARTICLE 7

(a) by mutual consent of CHP and HT;

(b) by either CHP or HT:

(ii) if a court of competent jurisdiction or other Governmental Entity shall have issued an order, decree, or ruling or taken any other action (with respect to which order, decree, or ruling CHP, HLP and HT shall use their best efforts to cause to be set aside), in each case permanently restraining, enjoining, or otherwise prohibiting the transactions contemplated by this Agreement or the Transaction Documents, and such order, decree, ruling, or other action shall have become final and nonappealable; or

(iii) if the First Closing shall not have occurred by 5:00
p.m., Eastern time on the date immediately following 120 days after the date hereof; provided, however, that the right to terminate this Agreement under this clause (iii) shall not be available to any party whose breach of this Agreement has been the cause of, or resulted in, the failure of the First Closing to occur on or before such date;

(c) by CHP: upon the occurrence of an event described in Section
5.2(p) (No Material Adverse Effect);

The right of any party hereto to terminate this Agreement pursuant to this
Section 7.1 shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any party hereto, any Person controlling any such party, or any of their respective officers, directors, trustees, employees, accountants, consultants, legal counsel, agents, or other representatives whether prior to or after the execution of this Agreement. Notwithstanding anything in the foregoing to the contrary, a party that is in material breach of this Agreement shall not be entitled to terminate this Agreement except, in the case of a default by HT or HLP, with the consent of CHP, or in the case of a default by CHP, with the consent of HT.

(a) by mutual consent of CHP and HT;

(b) by HT or HLP, in the event of a material breach by CHP of any representation, warranty, covenant or agreement contained in this Agreement or the Transaction Documents, which cannot be or has not been cured within the Cure Period following receipt by CHP of written notice of such breach;

(c) by CHP, in the event that any representation or warranty of HT, HLP or any Subsidiary contained in this Agreement or in the Transaction Documents was not materially

true and correct subsequent to the First Closing Date, and which cannot be or has not been cured within the Cure Period following receipt by HT or HLP of written notice of such breach;

(d) by CHP, in the event of a material breach by HT or HLP of any covenant or agreement contained in this Agreement, or in the Transaction Documents subsequent to the First Closing Date, which cannot be or has not been cured within the Cure Period following receipt by HT or HLP of written notice of such breach;

(e) by CHP upon the failure of HT to require Subsequent Closings for the issuance and sale hereunder of all Subsequent Closing Units pursuant to
Section 1.1(c) hereof, within one year after the First Closing Date; and

(f) by HT or HLP at any time after such date which is one year and six months immediately following the First Closing Date, if (a) following such date, HT and HLP shall have offered to CHP by written notice in accordance with
Section 9.8 hereof, an irrevocable offer to purchase, upon the terms and conditions set forth herein, and CHP shall have received such written offer to purchase, any Preferred Units not purchased hereunder and (b) CHP shall have failed to indicate its acceptance of such offer (by written notice to HT and/or HLP in accordance with Section 9.8 hereof) within thirty (30) days of its receipt of such notice.

(a) In the event of a termination of this Agreement pursuant to
Section 7.1 hereof by either HT, HLP or CHP, this Agreement shall terminate and have no further force or effect, without any liability or obligation on the part of any of HT, HLP or CHP, other than the provisions of Article 9 and this Article 7, which shall survive termination of this Agreement; provided, however, that nothing herein shall relieve any party from any liability for any breach by such party of any of its representations, warranties, covenants or agreements set forth in this Agreement.

ARTICLE 8

(ii) any and all Losses, attributable to, or resulting from, the Breach of any covenant or other agreement on the part of HT, HLP or any Subsidiary under this Agreement except to the extent CHP had actual knowledge of such Breach and, notwithstanding such actual knowledge, subsequently consummated a Closing contemplated by this Agreement;

(iv) For purposes of Section 8.1(a)(ii), any and all Losses, attributable to, or resulting from, the Breach of any representation or warranty of HT, HLP or any Subsidiary set forth in Section 2.1(c)(ii)(B) hereof, or any certificate with respect to such representations and warranties set forth in
Section 2.1(c)(ii)(B) hereof relating to any loan or credit agreement, note, bond, mortgage or indenture (or guarantee of same) entered into by HT, HLP or any Subsidiary and secured by a lien on any hotel owned by HT, HLP or any such Subsidiary, the amount of such Loss which HT or HLP shall be obligated to indemnify CHP for, shall be "grossed up" to reflect the diminution in the value of CHP's interest in HT and HLP resulting from payment of such indemnity and shall be calculated as (x) the actual Loss suffered by CHP divided by (y) one minus CHP's "Fully Diluted Interest In HT." For purposes of this provision, CHP's Fully Diluted Interest in HT shall equal the percentage arrived at by dividing (i) the total number of shares of HT Common Shares into which CHP's equity securities in HT and HLP are convertible plus the number of HT Common Shares CHP then holds, by (ii) the total number of HT Common Shares into which any outstanding equity securities of HT and HLP are convertible plus the total number of HT Common Shares then issued and outstanding.

(i) subject to Section 8.2 hereof, any and all Losses based upon, attributable to or resulting from the failure of any representation or warranty of CHP set forth in Article 2.2 hereof, or any representation or warranty contained in any certificate delivered by or on behalf of CHP pursuant to this Agreement except to the extent HT or HLP had actual

knowledge of such Breach and, notwithstanding such actual knowledge, subsequently consummated a Closing contemplated by this Agreement;

(ii) any and all Losses based upon, attributable to or resulting from the Breach of any covenant or other agreement on the part of CHP under this Agreement except to the extent HT or HLP had actual knowledge of such Breach and, notwithstanding such actual knowledge, subsequently consummated a Closing contemplated by this Agreement; and

(iii) any and all Expenses as a consequence of and incident to the foregoing.

(a) Claims by Third Parties.

(ii) After any final judgment or award shall have been rendered by a court of competent jurisdiction and the expiration of the time in which to appeal therefrom, or a settlement shall have been consummated, or the indemnified party and the indemnifying party shall have arrived at a mutually binding agreement with respect to a Claim hereunder, the indemnified party shall forward to the indemnifying party notice of any sums due and owing by the indemnifying party pursuant to this Agreement with respect to such matter.

(iii) The failure of the indemnified party to give reasonably prompt notice of any Claim shall not release, waive or otherwise affect the indemnifying party's obligations with respect thereto except to the extent that the indemnifying party can demonstrate actual material loss and prejudice as a result of such failure.

ARTICLE 9

available, including money damages, to obtain specific performance of the terms of this Agreement. In the event of any action to enforce this Agreement specifically, HT and HLP hereby waive the defense that there is an adequate remedy at law. In no event shall HT or HLP be entitled to seek specific performance with respect to any of CHP's obligations arising under this Agreement.

All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, telecopied, or mailed by registered or certified mail (return receipt requested), or sent by Federal Express or other recognized overnight courier, to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

(a) If to CHP, to:

CNL Hospitality Partners, L.P.
CNL Center at City Commons
450 South Orange Avenue
Orlando, Florida 32801-3336

Facsimile: 407-650-1085 Attn: Brian Strickland

with a copy (which shall not constitute notice hereunder) to:

Greenberg Traurig, LLP The MetLife Building 200 Park Avenue
New York, New York 10166 Facsimile: 212-801-6400 Attn: Judith Fryer, Esq.

Alan S. Gaynor, Esq.

(b) If to HT or HLP, to:

Hersha Hospitality Trust 148 Sheraton Drive
Box A
New Cumberland, Pennsylvania 17070 Facsimile: 717-974-7383 Attn: Hasu P. Shah

with a copy (which shall not constitute notice) to:

Hunton & Williams
951 East Byrd Street Richmond, Virginia 23219 Facsimile: 804-788-8218 Attn: Cameron N. Cosby, Esq.

Randall Parks, Esq.

Any of the above addresses may be changed at any time by notice given as provided above; provided, however, that any such notice of change of address shall be effective only upon receipt. All notices, requests or instructions given in accordance herewith shall be deemed received on the date of delivery, if hand delivered, on the date of receipt, if telecopied, three Business Days after the date of mailing, if mailed by registered or certified mail, return receipt requested, and one Business Day after the date of sending, if sent by Federal Express or other recognized overnight courier.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed, all as of the date first written above.

CNL HOSPITALITY PARTNERS, L.P.

By: CNL Hospitality GP Corp.,
its general partner

By: /s/ Tammie A. Quinlan
Name:   Tammie  A.  Quinlan
Title:  Senior  Vice  President

HERSHA HOSPITALITY LIMITED
PARTNERSHIP

By: Hersha Hospitability Trust,
its general partner

By: /s/ Ashish R. Parikh
Name:   Ashish  R.  Parikh
Title:  Chief  Financial  Officer

HERSHA HOSPITALITY TRUST

By: /s/ Ashish R. Parikh
Name:   Ashish  R.  Parikh
Title:  Chief  Financial  Officer

Hersha Hospitality Management, L.P. joins in this Agreement for the sole purpose of acknowledging its obligations with respect to Section 3.18 hereof.

HERSHA HOSPITALITY MANAGEMENT, L.P.

By: Hersha Hospitality Management, Co.,
its general partner

By: /s/ David L. Desfor
     Name:   David  L.  Desfor
     Title:  Controller

(SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT)

HT DISCLOSURE SCHEDULE

Exhibit A

Exhibit B

Exhibit C

Exhibit D

Exhibit E

Exhibit F

Exhibit G

Exhibit H

Exhibit I

Exhibit J

Tammie Quinlan, Senior Vice President

SECOND AMENDMENT

TO

AGREEMENT OF LIMITED PARTNERSHIP

OF

HERSHA HOSPITALITY LIMITED PARTNERSHIP

THIS SECOND AMENDMENT TO THE AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (this "Second Amendment") dated as of April 21, 2003, is entered into by HERSHA HOSPITALITY TRUST, a Maryland real estate investment trust, as general partner (the "General Partner") of HERSHA HOSPITALITY LIMITED PARTNERSHIP, a limited partnership formed under the laws of the Commonwealth of Virginia (the "Partnership"), for itself and on behalf of the limited partners of the Partnership, and CNL HOSPITALITY PARTNERS, L.P., a Delaware limited partnership ("CHP").

WHEREAS, Section 4.02(a) of the Amended and Restated Agreement of Limited Partnership of the Partnership dated January 26, 1999 (as amended by that certain Amendment dated December 31, 1999, the "Partnership Agreement") authorizes the General Partner to cause the Partnership to issue additional Partnership Units in one or more classes or series, with such designations, preferences and relative, participating, optional or other special rights, powers and duties as shall be determined by the General Partner, subject to the provisions of such section; and

WHEREAS, pursuant to the authority granted to the General Partner pursuant to Sections 4.02(a) and Article XI of the Partnership Agreement, the General Partner desires to amend the Partnership Agreement (i) to establish a new class of Partnership Units, the Series A Preferred Units (as hereinafter defined), and to set forth the designations, rights, powers, preferences and duties of such Series A Preferred Units, (ii) to issue the Series A Preferred Units to CHP and to admit CHP as an additional Limited Partner and (iii) to make certain other changes to the Partnership Agreement.

NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the General Partner hereby amends the Partnership Agreement as follows:

(a) A series of Partnership Units in the Partnership designated as the "10.5% Series A Preferred Units" (the "Series A Preferred Units") is hereby established. The maximum number of Series A Preferred Units shall be 350,000.

(b) The Series A Preferred Units shall rank (i) senior to any class of Partnership Units of the Partnership whether or not existing on the date hereof, which shall include, without limitation, all Partnership Units outstanding as of the date hereof and any other class or series of Partnership Units, either specifically ranking by the terms thereof junior to the

Series A Preferred Units or not specifically ranking by their terms senior to or on parity with the Series A Preferred Units (collectively, the "Junior Units"),
(ii) on parity with any class or series of Partnership Units specifically ranking by their terms on parity with the Series A Preferred Units, and (iii) junior to any class or series of Partnership Units specifically ranking by their terms senior to the Series A Preferred Units, in each case, as to payment of distributions, voting, distributions of assets upon liquidation, dissolution or winding-up, whether voluntary or involuntary, or otherwise.

(c) In connection with the issuance of the Series A Preferred Units to CHP, for purposes of making allocations of Net Profit and Net Loss, the Partnership shall be deemed to make an election to cause an "interim closing" of the Partnership's books as permitted by Section 706 of the Code and the Regulations thereunder.

(a) Each Series A Preferred Unit shall entitle the holder thereof to receive distributions out of any assets legally available therefor, prior to and in preference to any declaration or payment of any distribution on any Junior Units pursuant to Section 5.02 of the Partnership Agreement and pari passu with any Partnership Units ranking on parity with the Series A Preferred Units as to distributions. Distributions shall be payable when and as authorized by the General Partner. Distributions on each Series A Preferred Unit shall accrue at 10.5% per annum (the "Distribution Rate") on the Original Issue Price which distributions will commence accruing on the Original Issue Date. Distributions on the Series A Preferred Units shall be payable in cash in arrears no later than the twentieth (20th) day after the end of each quarter (each a "Distribution Payment Date"), commencing with the quarter ending June 30, 2003, to holders of record as of the close of business on the last business day of the applicable quarter. Distributions shall accrue, but not compound, whether or not they have been declared and whether or not there are Profits, surplus or other funds of the Partnership legally available for the payment of distributions. The date on which the Partnership initially issues a Series A Preferred Unit shall be referred to as the "Original Issue Date" regardless of the number of transfers of such Series A Preferred Unit made on the transfer records maintained by or for the Partnership and regardless of the number of certificates that may be issued to evidence such share.

(b) The Partnership shall not (i) pay or set aside for payment any distributions on Junior Units or (ii) redeem, repurchase or otherwise acquire any Junior Units, except as required by Section 5.03 of the Partnership Agreement and in a manner which satisfies Section 305(b) of the Code, until all accumulated, accrued and unpaid distributions have been paid on the Series A Preferred Units through the last preceding Distribution Payment Date.

(c) The amount of distributions payable for each quarterly period for the Series A Preferred Units shall be computed by multiplying the Original Issue Price by the Distribution Rate and dividing the result by four. The amount of distributions payable for the initial period or any other period shorter or longer than a full quarterly period shall be computed on the basis of twelve 30-day months and a 360-day year.

(d) Distribution payments shall be made by wire transfer to an account designated by each holder of the Series A Preferred Units or, if no account information is provided to the Partnership by a holder of the Series A Preferred Units, distribution payments shall be made by check delivered by first class mail to the address of such holder as set forth in the records of the Partnership.

Except as otherwise provided herein, Net Profit for any fiscal year or other applicable period shall be allocated in the following order and priority:

(i) first, to Limited Partners holding Series A Preferred Units, pro rata in proportion to the respective share of such Series A Preferred Units each Limited Partner holds, to the extent that Net Loss previously allocated to such holders pursuant to Section 5.01(b)(v) below for all prior fiscal years or other applicable periods exceeds Net Profit previously allocated to such Partners pursuant to this Section 5.01(a)(i) for all prior fiscal years or other applicable periods,

(ii) second, to the General Partner and the Limited Partners holding Partnership Units in proportion to their respective Percentage Interests to the extent that Net Loss previously allocated to such holders pursuant to
Section 5.01(b)(iii) below for all prior fiscal years or other applicable periods exceeds Net Profit previously allocated to such Partners pursuant to this Section 5.01(a)(ii) for all prior fiscal years or other applicable periods,

(iii) third, to the Limited Partners holding Series A Preferred Units until each such Series A Preferred Unit has been allocated Net Profit equal to the excess of (x) the cumulative amount of preferred distributions such Limited Partners have received for all fiscal years or other applicable period or to the date of redemption, to the extent such Series A Preferred Units are redeemed during such period, over (y) the cumulative Net Profit allocated to such Limited Partners, pursuant to this Section 5.01(a)(iii) for all prior fiscal years or other applicable periods (and, within each such class, pro rata in proportion to the respective share of such Series A Preferred Units each Limited Partner holds as of the last day of the period for which such allocation is being made),

(iv) fourth, to the General Partner until the aggregate amount of Net Profit allocated to the General Partner under this Section 5.01(a)(iv) for the current and all prior years equals the aggregate Preferred Return distributed to the General Partner under Section 5.02(a)(i) for the current and all prior years, taking into account the distributions to the General

Partner that are deemed to have been distributed on December 31 of each year pursuant to Section 5.02(f) hereof,

(v) fifth, to the Limited Partners holding Partnership Units in accordance with their respective Percentage Interests until the aggregate amount of Net Profit allocated to such Limited Partners under this Section 5.01(a)(v) for the current and all prior years equals the aggregate Preferred Return distributed to such Limited Partners for the current and all prior years, and

(vi) thereafter, to the Partners holding Partnership Units in accordance with their respective Percentage Interests.

Except as otherwise provided herein, Net Loss for any fiscal year or other applicable period shall be allocated in the following order and priority:

(i) first, to the Partners holding Partnership Units in accordance with their respective Percentage Interests to the extent of Net Profit previously allocated to such Partners pursuant to Section 5.01(a)(vi) above for all prior fiscal years or other applicable period exceeds Net Loss previously allocated to such Partners pursuant to this Section 5.01(b)(i) for all prior fiscal years or other applicable periods,

(ii) second, to the Limited Partners holding Partnership Units in accordance with their respective Percentage Interests to the extent of Net Profit previously allocated to such Limited Partners pursuant to Section 5.01(a)(v) above for all prior fiscal years or other applicable period exceeds Net Loss previously allocated to such Limited Partners pursuant to this Section 5.01(b)(ii) for all prior fiscal years or other applicable periods,

(iii) third, to the General Partner to the extent of Net Profit previously allocated to the General Partner pursuant to Section 5.01(a)(iv) above for all prior fiscal years or other applicable period exceeds Net Loss previously allocated to the General Partner pursuant to this Section 5.01(b)(iii) for all prior fiscal years or other applicable periods,

(iv) fourth, to the General Partner and the Limited Partners holding Partnership Units in proportion to their respective Percentage Interests until the adjusted Capital Account (including for this purpose any amounts a Partner is obligated to contribute to the capital of the Partnership or is deemed obligated to contribute pursuant to Regulations Section 1.704-1(b)(2)(ii)(c)(2)) of each Partner with respect to such Partnership Units is reduced to zero, and

(v) thereafter, to the Limited Partners holding Series A Preferred Units, pro rata in proportion to the respective share of such Series A Preferred Units each Limited Partner holds, until the adjusted Capital Account (modified in the same manner as in clause (iv)) of each such Limited Partner with respect to such Series A Preferred Units is reduced to zero.

It is the intention of the parties hereunder that the aggregate Capital Account balance of

the holders of Series A Preferred Units at any date shall not exceed the amount of the original Capital Contribution of such holder plus all accrued and unpaid distributions thereon, whether or not declared, to the extent not previously distributed.

(c) Notwithstanding anything to the contrary contained herein, in connection with the liquidation of the Partnership or the interest of a holder of Series A Preferred Units, and prior to making any other allocations of Net Profit or Net Loss, items of income and gain or deduction and loss shall first be allocated to holders of Series A Preferred Units in such amounts as is required to cause each such Partner's adjusted Capital Account balance (taking into account any amounts such Partner is obligated to contribute to the capital of the Partnership or is deemed obligated to contribute pursuant to Regulations
Section 1.704-1(b)(2)(ii)(c)(2)) to equal the amount each such Partner is entitled to receive pursuant to the provisions of Sections 4 or 5(l) hereof.

(d) For purposes of this Section 3, "Net Profit" means the excess of the Partnership's Profit over the Partnership's Loss for any fiscal year or portion thereof, and "Net Loss" means the excess of the Partnership's Loss over the Partnership's Profit for any fiscal year or portion thereof.

(e) Notwithstanding anything to the contrary above, until such time as the portion of the Net Income of the Partnership which is received or accrued from each tenant of the Partnership and its affiliates which is directly or indirectly owned by the Partnership, taking into account the provisions of
Section 856(d)(5) of the Code, qualifies as "rents from real property" derived from a "taxable REIT subsidiary" of the General Partner (within the meaning of Sections 856(d) and 856(l) of the Code), then in lieu of the income allocation to the Limited Partners holding Series A Preferred Units set forth in Section 3(a)(iii) above, items of income and gain, to the extent remaining after making the allocations required by Section 3(a)(i),(ii) and (iii) above, shall be allocated to the Limited Partners holding Series A Preferred Units until each such holder of Series A Preferred Units has been allocated items of income and gain in an amount equal to the excess of (x) the cumulative amount of preferred distributions such Limited Partner has received for all fiscal years or other applicable period , over (y) the cumulative items of income and gain allocated to such Limited Partners pursuant to this Section 5.01(e) for all prior fiscal years or other applicable periods (and, with respect to each such Limited Partner, pro rata in proportion to the respective share of such Series A Preferred Units each Limited Partner holds as of the last day of the period for which such allocation is being made), and all such allocations shall be taken into account for purposes of subsequent allocations made pursuant to Section 3.01(a)(iii) above.

(a) In the event of any liquidation, dissolution or winding up of the Partnership, whether voluntary or involuntary, after payment or provision for payment of debts and other liabilities of the Partnership, each holder of Series A Preferred Units, before any distribution or payment is made upon any Junior Units pursuant to Section 5.06 of the Partnership Agreement, shall be entitled to receive, out of the assets of the Partnership available for distribution to the Partners, the sum of (A) $100.00 per Series A Preferred Unit and (B) all

accrued but unpaid distributions (if any) payable with respect to such Series A Preferred Units the (the "Liquidation Preference").

(b) In the event the assets to be distributed among the holders of the Series A Preferred Units upon any liquidation, dissolution or winding up of the Partnership, whether voluntary or involuntary, shall be insufficient to permit full payment of the Liquidation Preference and similar payments on any other class of Partnership Units ranking on a parity with the Series A Preferred Units upon liquidation, then the holders of the Series A Preferred Units and such other Partnership Units shall share ratably in any such distribution of the Partnership's assets in proportion to the full respective distributable amounts to which they are entitled.

(c) Upon any such liquidation, dissolution or winding up of the Partnership, after the holders of the Series A Preferred Units and any other class of beneficial interests ranking on a parity with the Series A Preferred Units upon liquidation shall have been paid in full in accordance with the rights and preferences to which they are entitled, the remaining net assets of the Partnership shall be distributed in accordance with Section 5.06 of the Partnership Agreement.

(d) For purposes of this Section, a liquidation, dissolution or winding up of the Partnership shall be deemed to be occasioned by, or to include, (A) the acquisition after the date of this Second Amendment of a majority of the Partnership Interests by an entity other than the General Partner by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation, but excluding any merger effected exclusively for the purpose of changing the domicile of the Partnership) in which outstanding Partnership Interests are exchanged for securities or other consideration issued, or caused to be issued by the acquiring entity or its subsidiary (an "Acquisition"), or (B) the sale, lease, exchange or other transfer (in one transaction or a series of transactions) of all or substantially all of the assets of the Partnership (an "Asset Transfer"), unless in each of the cases set forth in (A) and (B) of this
Section 4(d), the Partners immediately prior to such Acquisition or Asset Transfer will, immediately after such Acquisition or Asset Transfer (by virtue of securities issued as consideration for the Partnership's Acquisition or Asset Transfer or otherwise) hold at least 50% of the voting power of the surviving, continuing or purchasing entity.

(e) Written notice of such liquidation, dissolution or winding up, stating a payment date, the amount of the Liquidation Preference and the place where said sums shall be payable shall be given by mail, postage prepaid, not less than 30 or more than 60 days prior to the payment date stated therein, to the holders of record of the Series A Preferred Units, such notice to be addressed to each such holder at his post office address as shown on the records of the Partnership.

(f) Whenever the distribution provided for in this Section 4 shall be payable in property other than cash, the value of such property shall be the fair market value thereof as determined in good faith by a majority of the "independent" Trustees serving on the Board of Trustees of the General Partner. For purposes of this provision, the "independent" Trustees shall be those Trustees serving on the Board of Trustees of the General Partner who satisfy the requirements for treatment as an "independent" trustee or "independent" director under the rules of the American Stock Exchange.

(ii) The exchange price with respect to exchange of the Series A

(iv) Each of the initial Common Exchange Price, the initial Series A Exchange Price and the initial Partnership Unit Exchange Price shall be adjusted from time to time in accordance with this Section 5. All references to the Common Exchange Price, the Series A Exchange Price, or the Partnership Unit Exchange Price herein shall mean such exchange price as so adjusted.

(v) In the event Series A Preferred Units are exchanged for Partnership Units, the Partnership Interest associated with each such Partnership Unit shall be the percentage obtained by dividing the Partnership Units so exchanged by the total number of Partnership Units then issued and outstanding immediately following such exchange.

(i) The Exchange Rights in this Section 5 shall be exercised by the holder thereof by giving written notice that the holder elects to exchange a stated number of Series A Preferred Units into either Priority Class A Common Shares, Series A Preferred Shares or Partnership Units and by surrender of a certificate or certificates (if any) for the Series A Preferred Units so to be converted and delivery of the undertaking described in clause (ii) to the Partnership at its principal office (or such other office or agency of the Partnership as the General Partner may designate by notice in writing to the holder or holders of the Series A Preferred Units) at any time during its usual business hours on the date set forth in such notice, together with a statement of the name or names (with addresses), subject to compliance with Article VII of the General Partner's Declaration of Trust (the "Declaration") and applicable laws to the extent such designation shall involve a transfer, in which the certificate or certificates for Priority Class A Common Shares, Series A Preferred Shares or Partnership Units as the case may be, shall be issued. Within five (5) business days after the receipt by the Partnership of the written notice referred to in this Subsection 5(d), surrender of the certificate or certificates (if any) for the Series A Preferred Units to be exchanged and delivery of the undertaking described in clause (ii), the Partnership shall issue and deliver, or cause to be issued and delivered, to the holder, registered in such name or names as such holder may direct, subject to compliance with Article VII of the Declaration and applicable laws to the extent such designation shall involve a transfer, a certificate or certificates for the number of whole Priority Class A Common Shares, Series A Preferred Shares or Partnership Units, as the case may be, issuable upon the exchange of such Series A Preferred Units. To the extent permitted by law, such exchange shall be deemed to have been effected as of the close of business on the date on which such written notice shall have been received by the Partnership and the certificate or certificates for such share or shares shall have been surrendered as aforesaid, and at such time the rights of the holder of such Series A Preferred Units shall cease, and the person or persons in whose name or names any certificate or certificates for Priority Class A Common Shares, Series A Preferred Shares or Partnership Units, as the case may be, shall be issuable upon such exchange shall be deemed to have become the

holder or holders of record of the shares represented thereby.

exchanged immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof.

(i) If, at any time or from time to time after the Original Issue Date, the General Partner issues or sells, or is "deemed" by the express provisions of this Subsection 5(h)(i) to have issued or sold (other than in connection with an "Antidilution Carve Out Event"), Additional HT Common Shares (as defined in Subsection 5(h)(iv) below) for an Effective Price (as defined in Subsection 5(h)(iv) below) that is less than eighty-five percent (85%) of the then effective Common Exchange Price, then and in each such case, the then existing Common Exchange Price shall be reduced, as of the opening of business on the date of such issue or sale, to a price determined by multiplying the Common Exchange Price by a fraction (i) the numerator of which shall be (A) the number of HT Common Shares deemed outstanding (as defined in the next sentence) immediately prior to such issue or sale, plus (B) the number of HT Common Shares which the aggregate consideration received (as defined in Subsection 5(h)(ii)) by the General Partner for the total number of Additional HT Common Shares so issued would purchase at such Common Exchange Price, and (ii) the denominator of which shall be the number of HT Common Shares deemed outstanding (as defined below) immediately prior to such issue or sale plus the total number of Additional HT Common Shares actually issued. As used herein, the number of HT Common Shares "deemed" to be outstanding as of a given date shall be the sum of (A) the number of HT Common Shares actually outstanding, (B) the number of HT Common Shares into which the then outstanding Series A Preferred Units could be exchanged if fully exchanged on the day immediately preceding the given date, and (C) the number of HT Common Shares which could be obtained through the exercise or exchange of all other rights, options and convertible securities outstanding on the day immediately preceding the given date as set forth in
Section 5(h)(ii) below. As used herein, an "Antidilution Carve Out Event" shall mean a distribution (A) on any class of shares, (B) pursuant to a subdivision or

combination of HT Common Shares as provided in Section 5(e) above, (C) pursuant to any employee benefit plan approved by the Board of Trustees of the General Partner which plans shall call for the issuance, in the aggregate, of no more than 650,000 HT Common Shares (an "Approved Employee Benefit Plan," (D) pursuant to a plan providing for the issuance of Additional HT Priority Class A Common Shares upon reinvestment of dividends and additional optional amounts under such plan where such dividends or optional payments are reinvested at an amount per share of HT Common Stock that is equal to or greater than 95% of the fair market value of such shares (a "DRIP") or (E) upon exchange of partnership interests in the Partnership pursuant to and in accordance with Section 8.05 of the Partnership Agreement. To the extent not taken into account pursuant to an adjustment in accordance with the Articles Supplementary, as defined below, any changes to the Common Exchange Price hereunder shall automatically, and without further action by the Partnership or the General Partner, result in a corresponding change to the Conversion Price set forth in the Articles Supplementary of the General Partner's Declaration of Trust, which Articles Supplementary set forth the rights and designations of the Series A Preferred Shares (the "Articles Supplementary").

(ii) For the purpose of making any adjustment required under this Section 5(h), the consideration received by the General Partner for any issue or sale of securities shall (A) to the extent it consists of cash, be computed at the amount of cash received by the General Partner, after deduction of any underwriting or similar discount, commission, compensation or concessions paid or allowed by the Trust in connection with such issue or sale, but without deduction of any expenses payable by the Trust, (B) to the extent it consists of property other than cash, be computed at the fair value of that property as determined in good faith by the Board of Trustees of the General Partner, and
(C) if Additional HT Common Shares, Convertible Securities (as defined in subsection 5(h)(iii)) or rights or options to purchase either Additional HT Common Shares or Convertible Securities are issued or sold together with other stock or securities or other assets of the General Partner for a consideration which covers both, be computed as the portion of the consideration so received that may be reasonably determined in good faith by the General Partner's Board of Trustees to be allocable to such Additional HT Common Shares, Convertible Securities or rights or options.

provided that if in the case of Convertible Securities the minimum amount of such consideration cannot be ascertained, but is a function of anti-dilution or similar protective clauses, the General Partner shall be deemed to have received the minimum amounts of consideration without reference to such clauses;

provided further that if the minimum amount of consideration payable to the General Partner upon the exercise or exchange of rights, options or Convertible Securities is reduced over time or on the occurrence or non-occurrence of specified events other than by reason of anti-dilution adjustments, the Effective Price shall be recalculated using the figure to which such minimum amount of consideration is reduced; and

provided further that if the minimum amount of consideration payable to the General Partner upon the exercise or exchange of such rights, options or Convertible Securities is subsequently increased, the Effective Price shall be again recalculated using the increased minimum amount of consideration payable to the General Partner upon the exercise or exchange of such rights, options or Convertible Securities. No further adjustment of the Common Exchange Price, as adjusted upon the issuance of such rights, options or Convertible Securities, shall be made as a result of the actual issuance of Additional HT Common Shares on the exercise of any such rights or options or the exchange of any such Convertible Securities. If any such rights or options or the exchange privilege represented by any such Convertible Securities shall expire without having been exercised, the Common Exchange Price as adjusted upon the issuance of such rights, options or Convertible Securities shall be readjusted to the Exchange Price which would have been in effect had an adjustment been made on the basis that the only Additional HT Common Shares so issued were the Additional HT Common Shares, if any, actually issued or sold on the exercise of such rights or options or rights of exchange of such Convertible Securities, and such Additional HT Common Shares, if any, were issued or sold for the consideration actually received by the General Partner upon such exercise, plus the consideration, if any, actually received by the General Partner for the granting of all such rights or options, whether or not exercised, plus the consideration received for issuing or selling the Convertible Securities actually converted, plus the consideration, if any, actually received by the Partnership (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) on the exchange of such Convertible Securities, provided that such readjustment shall not apply to prior exchanges of Series A Preferred Units.

total number of Additional HT Common Shares issued or sold, or deemed to have been issued or sold by the General Partner under this Section 5(h).

(v) If the General Partner proposes to issue or sell Additional HT Common Shares for an Effective Price that is less than eighty-five percent (85%) of the Conversion Price and such issuance or sale will result in a reduction of the Common Exchange Price pursuant to this Section (h) (an "AMEX Dilutive Issuance"), then the AMEX Dilutive Issuance and the resulting potential issuance of Additional HT Common Shares upon exchange of Series A Preferred Units at a Common Exchange Price below the initial Common Exchange Price, must be approved by the shareholders of the General Partner to the extent required by the rules of the American Stock Exchange. If such holders do not approve the AMEX Dilutive Issuance, and the resulting potential issuance of Additional HT Common Shares upon exchange of Series A Preferred Units at a Common Exchange Price below the initial Common Exchange Price, as required to be approved by the preceding sentence, then the General Partner shall not consummate the AMEX Dilutive Issuance in any manner that would cause a reduction of the Common Exchange Price pursuant to this Section (h).

shall mail to each holder of Series A Preferred Units at least ten (10) days prior to the record date specified therein a notice specifying (A) the date on which any such record is to be taken for the purpose of such distribution and a description of such distribution, (B) the date on which any such Acquisition, reorganization, reclassification, transfer, consolidation, merger, Asset Transfer, dissolution, liquidation or winding up is expected to become effective, and (C) the date, if any, that is to be fixed as to when the holders of record of Priority Class A Common Shares (or other securities) shall be entitled to exchange their shares of Priority Class A Common Shares (or other securities) for securities or other property deliverable upon such Acquisition, reorganization, reclassification, transfer, consolidation, merger, Asset Transfer, dissolution, liquidation or winding up.

Promptly after the compliance by the holders of redeemed Series A Preferred Units with the requirements set forth in the Redemption Notice, such units shall be exchanged for any cash (without interest thereon) for which such units have been redeemed. If fewer than all the outstanding Series A Preferred Units are to be redeemed, units to be redeemed shall be selected by the General Partner from outstanding Series A Preferred Units not previously called for redemption pro rata (as nearly as may be), by lot or by any other method determined by the

General Partner in its sole discretion to be equitable.

(ii) The Redemption Notice shall set forth (A) the number of Series A Preferred Units to be redeemed, (B) the Call Date, (C) the amount of the Redemption Price (C) a redemption claim form, and (D) all other relevant terms. The Redemption Notice shall be mailed by the Partnership, postage prepaid, to each holder whose Series A Preferred Units are to be redeemed at its address shown on the records of the Partnership. If the Partnership elects to redeem any Series A Preferred Units pursuant to this Section 5(l), such election shall not be revocable by the Partnership and the Partnership shall be obligated to redeem at the Redemption Price all shares to be redeemed on the Call Date set forth in the Redemption Notice, as described above.

aggregation, the exchange would result in the issuance of any fractional share, the General Partner shall, in lieu of issuing any fractional shares, pay cash equal to the product of such fraction multiplied by the Priority Class A Common Shares' fair market value per share on the date of exchange (as reported by the securities exchange on which the Priority Class A Common Shares are then listed for trading, or if none, the most recently reported "over the counter" trade price, or if none, as determined in good faith by the Board of Trustees of the General Partner).

(q) Notwithstanding anything to the contrary above, Series A Preferred Units shall be convertible into Series A Preferred Shares or Priority Class A Common Shares in the manner described above provided that delivery to or ownership of such Series A Preferred Shares or Priority Class A Common Shares, as applicable, by a holder of Series A Preferred Units (regardless of whether or not such holder of Series A Preferred Units has, in fact, exercised its Exchange Rights, and taking into account deemed ownership determined after applying the provisions of Section 318 of the Code as modified by the provisions of Section 856(d)(5) of the Code), would not result in:

(i) such holder of Series A Preferred Units or any other person owning or being deemed to own, directly or indirectly (determined after applying the provisions of Section 318 of the Code, as modified, by the provisions of
Section 856(d)(5) of the Code), Series A Preferred Shares or Priority Class A Common

Shares representing an interest in 10% or more of the value of the share of HT, and

(ii) (A) cause HT to own or be deemed to own, directly or indirectly (determined after applying the provisions of Section 318 of the Code, as modified, by the provisions of Section 856(d)(5) of the Code), 10% or more of the ownership interests in a tenant of HT, HLP, or any other entity in which either HT or HLP has an equity interest, excluding, for this purpose, an entity which qualifies as a taxable REIT subsidiary of HT (within the meaning of Section 856(l) of the Code) ( a "TRS"), or

(B)(1) cause persons owning, or being deemed to own, directly or indirectly (determined after applying the provisions of Section 318 of the Code, as modified, by the provisions of Section 856(d)(5) of the Code), 35% or more of the voting stock or value of the shares of HT to be deemed to own, directly or indirectly (determined after applying the provisions of
Section 318 of the Code, as modified, by the provisions of Section 856(d)(5) of the Code), 35% or more of (x) the voting stock or total number of shares of a corporate independent contractor providing services to a tenant of HT, HLP, or any other entity in which either HT or HLP has an equity interest or (y) the net assets or profits of a non-corporate independent contractor providing services to a tenant of HT, HLP, or any other entity in which either HT or HLP has an equity interest, each within the meaning of Section 856(d)(3) of the Code (an "Independent Contractor"), or

(2) cause an Independent Contractor to own or be deemed to own, directly or indirectly (determined after applying the provisions of Section 318 of the Code, as modified, by the provisions of Section 856(d)(5) of the Code), 35% or more of the voting stock or value of the shares of HT.

(i) Notwithstanding Section 4.02(a)(i) of the Partnership Agreement, (A) any authorization or any designation, whether by reclassification or otherwise, of any new class or series of Partnership Units ranking senior to the Series A Preferred Units as to payment of distributions, distribution of assets upon liquidation, dissolution or winding-up (whether voluntary or involuntary), voting or otherwise; or (B) other than in connection with a "Voting/Preemptive Rights Carve Out Event," as defined below any issuance of any class or series of equity interest of the Partnership prior, in the case of the events set forth in this section 6(i)(B), to the first to occur of (1) the issuance and sale of an aggregate of 250,000 Series A Preferred Units pursuant to the terms of the Securities Purchase Agreement or (2) a "SPA Termination", defined as the termination of the Securities Purchase Agreement pursuant to
Section 7.1 or 7.2 thereof. As used herein, a "Voting/Preemptive Rights Carve Out Event" shall mean (X) at any time after the consummation of the First Closing and the Second Closing under the Securities Purchase Agreement, the issuance of Partnership Units in exchange for a contribution of properties to the Partnership approved by the Board of Trustees of the General Partner, (Y) at any time when the Partnership issues Partnership Units in connection with an Approved Employee Benefit Plan, including issuance of Partnership Units to the General Partner in connection with the issuance of HT Common Shares under such plans, which plans may issue, in the aggregate, no more than 650,000 shares of Priority Class A Common Shares or (Z) the issuance of Partnership Units to the General Partner in connection with the issuance of HT Common Shares pursuant to a DRIP.

(ii) During any period when distributions with respect to the Series A Preferred Units are in arrears, any purchase, redemption or other acquisition for value (or payment into or setting aside as a sinking fund for such purpose) of any Junior Units;

(iii) During any period when distributions with respect to the Series A Preferred Units are in arrears, any action that results in the declaration or payment of distributions, direct or indirect on account of any Junior Units;

(iv) Notwithstanding Article XI of the Partnership Agreement, any action that results in any amendment, alteration, or repeal (by merger or consolidation or otherwise) of any provisions of this Second Amendment, any provisions of the Articles Supplementary, the General Partner's Declaration of Trust, the General Partner's By-laws which eliminates, amends or affects any term (adversely or otherwise) of the Series A Preferred Shares and/ or the Priority Class A Common Shares or shares of any series ranking senior to the Series A Preferred Shares, including, without limitation, the redemption, dividend, voting, preemptive, antidilution and other powers, rights and preferences of such shares or adversely affects any holder thereof;

(v) Notwithstanding Section 6.01(a)(xxi) of the Partnership Agreement, any action where the Partnership or the General Partner merges with or into or consolidates with any other entity, but excluding any merger effected exclusively for the purpose of changing the domicile of the Partnership or the General Partner;

(vi) Any action where the Partnership or any of its subsidiaries directly or indirectly sells, leases, transfers, conveys or assigns (whether in a single transaction or series of related transactions) all or substantially all of the Partnership's assets, other than transactions involving leases by the Partnership of its hotel properties in the ordinary course of its business;

(vii) All transactions involving the Partnership or the General Partner of the type referred in paragraph (a) of Rule 145 under the Securities Act of 1933, as amended, and all transactions involving the Partnership or the General Partner constituting a change-in-control within the meaning of Rule 14(f) under the Securities Exchange Act of 1934, as amended;

(viii) Any action where the Partnership or the General Partner or any of its or their material subsidiaries files any voluntary, or consents to the filing of any involuntary, petition for relief under title 11 of the United States Code or any successor statute or under any reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law with respect to the General Partner, the Partnership or any of its or their subsidiaries;

(ix) Nothwithstanding Section 6.07 of the Partnership Agreement, any action where the Partnership, the General Partner or any of its or their material subsidiaries appoints or consents to, or acquiesces in, the appointment of a receiver, conservator, trustee or other similar official charged with the administration, control, management, operation, liquidation, dissolution or valuation of the Partnership, the General Partner or any of its or their material subsidiaries, or any of their respective businesses or assets;

(xi) Notwithstanding Section 6.01(a)(xi) or Article III of the Partnership Agreement, for the Partnership, the General Partner or any of its or their Subsidiaries to engage in any business where either the operation of such business or ownership of the assets related to such business will result in the General Partner failing to satisfy the provisions of Section 856 of the Code;

(xii) Notwithstanding Section 4.02(a)(ii) and the proviso contained in Section 6.08 of the Partnership Agreement, conducting any business activities or the ownership of any asset of the General Partner (other than partnership interests in the Partnership) in each case other than through the Partnership or one or more Subsidiary Partnerships as contemplated by Section 6.08 of the Partnership Agreement;

(xiii) Admission of a substitute or additional General Partner;

(xiv) Any agreement to do any of the transactions set forth in this Section.

7. Preemptive Rights.

Each of the holders of the Series A Preferred Units shall have the following preemptive rights:

CHP is hereby admitted to the Partnership as a Partner on the terms and conditions set forth herein. Exhibit A to the Partnership Agreement is hereby amended to reflect the issuance of the Series A Preferred Units provided for herein.

Section 8.05(c) of the Partnership Agreement is hereby amended by inserting the following new clause (v) and renumbering the existing clause "(v)" as clause "(vi)": "(v) cause any person who operates Property on behalf of a "taxable REIT subsidiary" of the Company, as defined in Section 856(l) of the Code, which Property is a "qualified lodging facility" within the meaning of
Section 856(d)(9)(D) of the Code that is leased to such taxable REIT subsidiary, to fail to qualify as an "eligible independent contractor" within the meaning of
Section 856(d)(9)(A) of the Code with respect to such taxable REIT subsidiary,".

In the event of any conflict between the provisions of this Second Amendment and the Partnership Agreement, the provisions of this Second Amendment shall govern. The provisions of Section 6.04(b) of the Partnership Agreement shall not be construed to limit the rights and preferences of the holders of Series A Preferred Units under the Partnership Agreement and this Second Amendment. Except as modified herein, all terms and conditions of the Partnership Agreement shall remain in full force and effect, which terms and conditions the General Partner hereby ratifies and affirms.

IN WITNESS WHEREOF, this Second Amendment has been executed as of the date first above written.

GENERAL PARTNER:              HERSHA  HOSPITALITY  TRUST



                              By: /s/ Ashish R. Parikh
                              Name:   Ashish  R.  Parikh
                              Title:  Chief  Financial  Officer

SERIES A PREFERRED
LIMITED PARTNER:              CNL  HOSPITALITY  PARTNERS,  L.P.

                              By:  CNL  HOSPITALITY  GP  CORP.,
                              its  general  partner

                              By: /s/ Tammie A. Quinlan
                              Name:   Tammie  A.  Quinlan
                              Title:  Senior  Vice  President

(SIGNATURE PAGE TO SECOND AMENDMENT AGREEMENT OF LIMITED PARTNERSHIP OF HERSHA
HOSPITALITY LIMITED PARTNERSHIP)

STANDSTILL AGREEMENT

This STANDSTILL AGREEMENT, dated as of April 21, 2003, by and among Hersha Hospitality Trust, a Maryland real estate investment trust ("HT"), Hersha Hospitality Limited Partnership, a Virginia limited partnership ("HLP" and together with HT, the "HT Parties"), CNL Hospitality Partners, L.P., a Delaware limited partnership ("CHP") and CNL Financial Group, Inc., a Florida corporation ("CNL Financial", and together with CHP, the "CHP Parties").

RECITALS:

WHEREAS, pursuant to that certain Securities Purchase Agreement, dated as of April 21, 2003, by and among HT, HLP, and CHP (the "Purchase Agreement"), CHP is acquiring, simultaneously with the execution of this Agreement 100,000 Series A Convertible Preferred Partnership Units of HLP ("Series A Preferred Units") and, within 30 days thereafter, another 50,000 Series A Preferred Units; and

WHEREAS, the Purchase Agreement contemplates that CHP may acquire up to an additional 100,000 Series A Preferred Units; and

WHEREAS, pursuant to the terms of that certain Second Amendment to the Amended and Restated Agreement of Limited Partnership of HLP (as amended, the "Partnership Agreement"), the Series A Preferred Units are exchangeable for, at the option of CHP, Series A Convertible Preferred Shares of Beneficial Interest, par value $.01 per share, of HT (the "Series A Preferred Shares") or Priority Class A Common Shares of Beneficial Interest, par value $0.01 per share, of HT (the "Class A Common Shares"); and

WHEREAS, pursuant to that Limited Partnership Agreement dated as of April 21, 2003, between CHP and HLP (the "Joint Venture Agreement"), CHP may acquire interests in certain joint ventures with HLP or its subsidiaries (the "Joint Venture Interests") which will be exchangeable, upon certain terms and conditions, for Class A Common Shares; and

WHEREAS, HT's Amended and Restated Declaration of Trust, as further amended through the date hereof (the "Charter"), limits the number of shares of beneficial interest of HT of any class or series, including without limitation the Series A Preferred Shares and Common Shares ("Equity Shares"), that may be beneficially or constructively owned, including pursuant to the attribution rules set forth in Section 544 of the Internal Revenue Code of 1986, as amended (the "Code"), as such rules are modified by Section 856(h) of the Code, or in
Section 318(a) of the Code, as such rules are modified by Section 856(d)(5) of the Code (constructive ownership of stock pursuant to such attribution rules is hereinafter referred to as "Constructive Ownership," and the terms "Constructively Own" and "Constructive Owner" shall have the correlative meanings) by any person to 9.9% of the total number of any class or series of Equity Shares that are issued and outstanding considered on a class by class basis (the "Excess Share Provisions"); and

WHEREAS, pursuant to Article VII of the Charter, all Equity Shares Constructively Owned by any person or entity and its Affiliated Persons in excess of 9.9% of the total number

of Equity Shares that are issued and outstanding (the "Ownership Limit") are deemed to be "Excess Shares," and such Excess Shares are automatically transferred to a charitable trust to be held for sale unless the HT Board of Trustees, in accordance with the Excess Share Provisions, grants an exception to such Excess Share Provisions with respect to the Excess Shares in accordance with Article VII, Section 1(G) of the Charter (a "Waiver"); and

WHEREAS, CHP has requested, as a condition to acquiring the Series A Preferred Units, the underlying Class A Common Shares, or the Joint Venture Interests, that HT, acting through its Board of Trustees, grant CHP a limited Waiver pursuant to an Excepted Holder Agreement, dated as of April 21, 2003; between HT and CHP (the "Excepted Holder Agreement"); and

WHEREAS, HT, acting through its Board of Trustees, agreed to grant CHP and its Affiliated Persons a limited Waiver, conditioned upon CHP agreeing to enter into the Excepted Holder Agreement and this Standstill Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

(i) acquire, agree to acquire, or propose to acquire, in any manner, directly or indirectly through an Affiliated Person, "beneficial ownership" (as determined pursuant to Rule 13d-3 under the Securities Act of 1934), Constructive Ownership or control of:

(A) any securities of HT or HLP, other than pursuant to the Securities Purchase Agreement or upon conversion or exchange, as the case may be, of Series A Preferred Units, Series A Preferred Shares or Joint Venture Interests, in accordance with the applicable documents governing such conversion or exchange, or pursuant to the exercise of preemptive rights granted to holders of Series A Preferred Shares under the Charter or granted to the holders of Series A Preferred Units under the HLP Partnership Agreement, or the exercise of anti-dilution rights granted to the holders of Series A Preferred Shares, Series A Preferred Units and Joint Venture Interests all in accordance with Article VII of the Charter, the Excepted Holder Agreement and the Joint Venture Agreement, as the case may be;

(B) any subsidiary or any assets or properties of HT or any subsidiary or division thereof, including by way of any fundamental transaction with HT or HLP, such as a tender offer, business

combination, merger or other consolidation, except as otherwise contemplated by the Joint Venture Agreement;

(ii) initiate, make or participate in any "solicitation" of "proxies" or become a "participant" in any "election contest" (as such terms are used in the current and any future proxy rules of the Securities and Exchange Commission, but (1) disregarding clause
(iv) of Rule 14a-1(l)(2) under the Securities Exchange Act of 1934, as amended, (the "Exchange Act") and (2) including any exempt solicitation pursuant to Rule 14a-2(b)(1) under the Exchange Act) with respect to HT;

(iii) call, or in any way encourage or participate in a call for, any special meeting of shareholders of HT (or take any action with respect to acting by written consent of the shareholders of HT); request, or take any action to obtain or retain any list of holders of any securities of HT; or initiate or propose any shareholder proposal (including, without limitation, any proposal to amend the HT Charter or Bylaws) or participate in or encourage the making of, or solicit shareholders of HT for the approval of, one or more shareholder proposals;

(iv) seek to encourage any third person to vote Equity Shares in opposition to a recommendation of a majority of the HT Board of Trustees, notwithstanding the fact the CHP Parties may vote their shares in such opposition;

(v) seek representation on the HT Board of Trustees or a change in the composition or size of the HT Board of Trustees other than as and to the extent expressly permitted by Section 5(b) of the Articles Supplementary to the Charter designating the Series A Preferred Shares and Section 3.5 of the Purchase Agreement;

(vi) form, join or act in concert with any other person with respect to a "group" (as defined in Section 13(d)(3) of the Exchange Act) relating to HT;

(vii) assist or encourage any attempt by any other person to do any of the foregoing;

(viii) disclose any intention, plan or arrangement inconsistent with the provisions of this Section 1; or

(ix) request HT or any of its directors, officers, employees or agents to amend or waive any provisions of this Section 1(a) or Article VII of the Charter (except as provided pursuant to the Excepted Holder Agreement) or seek to challenge the legality or effect thereof.

The provisions of this Section 1 are referred to in this Standstill Agreement, collectively, as "Restricted Activities." Notwithstanding the foregoing, nothing in this Section 1 shall prohibit the CHP Parties or their Affiliated Persons from making a proposal to acquire any HT or HLP

asset or property for which HT or HLP publicly announces an intention to sell or for which HT or HLP actively solicits acquisition proposals from third parties.

(ii) With respect to each annual, special or other meeting of the shareholders of HT, and at any adjournments thereof or pursuant to any consent in lieu of a meeting or otherwise, in connection with each vote or consent on matters brought before the HT shareholders, each of the CHP Parties hereby irrevocably grants an irrevocable proxy (which shall be specific to the meeting or consent referred to above and shall terminate immediately following completion of such meeting or action by consent in lieu of meeting) with respect to all of the CHP Proxy Shares, which proxy is agreed to be coupled with an interest and which will cease upon conclusion of such meeting or action by consent in lieu of such meeting, to the Secretary of HT, whosoever such person shall be from time to time and his or her successors, as such CHP Party's true and lawful proxy and attorney-in-fact, with the irrevocable instruction that the CHP Proxy Shares shall be voted in the same manner and proportion as the Equity Shares held by all shareholders of HT, other than the CHP Parties, are voted in connection with such vote or consent.

(i) in transactions under Rule 144 promulgated under the Securities Act of 1933, as amended (the "Securities Act") or other exemption from registration thereunder (except as limited pursuant to clause (ii), below);

(ii) in a private transaction;

(iii) in response to a bona fide tender or exchange offer by a third party for all of the outstanding Equity Shares which is recommended to the shareholders of HT by a majority of the HT Board of Trustees deemed "independent" under the listing standards of the securities exchange or automated quotation system on which the HT Class A Common Shares are listed or, if none, who are not affiliated with the CHP Parties ("Independent Trustees");

(iv) in a merger, consolidation, statutory share exchange or any other similar transaction or "business combination", as defined in
Section 145 of the Securities Act with a third party which is recommended to the shareholders of HT by a majority of the Independent Trustees; or

(v) pursuant to registration rights of the CHP Parties pursuant to a Registration Rights Agreement of even date herewith between HT, HLP and the CHP Parties;

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND VOTING, INCLUDING THE GRANT OF AN IRREVOCABLE

PROXY, SET FORTH IN A STANDSTILL AGREEMENT DATED AS OF APRIL 21, 2003 BETWEEN THE INITIAL HOLDER HEREOF AND THE TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE SECRETARY OF THE TRUST, AND MAY NOT BE SOLD, TRANSFERRED OR VOTED EXCEPT IN ACCORDANCE WITH THE TERMS OF SUCH AGREEMENT, AND ANY ATTEMPTED TRANSFER OR VOTING OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IN VIOLATION OF THE TERMS OF SUCH AGREEMENT SHALL BE NULL AND VOID AND NOT RECOGNIZED BY THE TRUST.

Each of the CHP Parties hereby jointly and severally represents and warrants to, and agrees with, the HT Parties as follows:

(i) the certificate of incorporation, charter, bylaws, partnership agreement, limited liability company agreement or similar governing document of any CHP Party;

(ii) any contract or other agreement or instrument to which a CHP Party is a party or by which any CHP Party is bound, the breach of which would have a material adverse effect on HT, HLP or any CHP Party; or

(iii) any law, order, rule, regulation, writ, injunction or decree applicable to any CHP Party.

Each of the HT Parties hereby jointly and severally represents and warrants to, and agrees with, the CHP Parties as follows:

(i) the declaration of trust, certificate of incorporation, charter, bylaws, partnership agreement, limited liability company agreement or similar governing document of any HT Party;

(ii) any contract or other agreement or instrument to which any HT Party is a party or by which any HT Party is bound, the breach of which would have a material adverse effect on HT, HLP or the CHP Parties, or

(iii) any law, order, rule, regulation, writ, injunction or decree applicable to any HT Party.

(i) If HT, pursuant to Section 2 of HT's Articles Supplementary designating and classifying the Series A Preferred Shares, or HLP, pursuant to the Partnership Agreement, fails to pay two consecutive quarterly dividends or distributions with respect to any outstanding Series A Preferred Shares or Series A Preferred Units, as the case may be;

(ii) If HT fails to maintain its status as a real estate investment trust under the Code;

(iii) The occurrence of (A) the acquisition by any person or Group other than the CHP Parties or any Affiliate thereof of beneficial ownership of Equity Shares in excess of the Ownership Limit, and (B) the failure of the Board to enforce against such person or Group the limits on ownership of Equity Shares contained in the Charter;

(vi) In connection with any actual or proposed Covered Transaction, the removal of any rights plan, provisions of the Charter relating to staggered terms of office for directors, provisions of the Charter or the Bylaws of HT relating to supermajority voting of the HT's shareholders, "excess share" provisions of the Charter or the Bylaws of HT, or any other similar arrangements, agreements, commitments or provisions in the HT Charter or the Bylaws of HT which would reasonably be expected to impede the consummation of such actual or proposed Covered Transaction by action of any government authority, the Board of Trustees, the holders of beneficial interests of HT or otherwise, or, whether or not in connection with any actual or proposed Covered Transaction, any modification, amendment, waiver or repeal of the Excess Share Provisions (except as may be necessary to allow any acquisition of Equity Shares that would not constitute an Early Termination Event under this Section;

(vii) Upon reduction of CHP's Constructive Ownership of Equity Shares (on an as converted/exchanged basis), to less than 9.9% of the HT Common Shares then issued and outstanding, on a fully diluted basis (which shall assume the conversion and/or exchange of all HT and HLP securities which are convertible into or exchangeable for HT Common Shares) and the termination of the Excepted Holder Agreement or other waiver of or exception to the Excess Share Provisions applicable to the CHP Parties; and

(viii) Upon the occurrence of any material failure by HT or HLP, as applicable, to comply with the terms of the Series A Preferred Shares or Series A Preferred Units, which failure is not cured within 40 days following delivery of written notice of such failure to HT or HLP, as applicable.

(b) In the event of the termination of this Standstill Agreement and the Excepted Holder Agreement as set forth above, the CHP Parties shall then immediately become subject to all rules and restrictions regarding the ownership of Equity Shares, including, without limitation, the Excess Share Provisions and any other limitations set forth in the organizational documents of HT.

(i) the day following dispatch to an overnight courier service (such as Federal Express or UPS) or

(ii) five (5) days after dispatch by certified or registered first class mail, postage prepaid, return receipt requested, to the party to whom the same is so given or made:

CNL Hospitality Properties, Inc. CNL Center at City Commons 450 South Orange Avenue
Orlando, Florida 32801-3336 Facsimile: 407-650-1085
Attn: Brian Strickland

Greenberg Traurig, LLP
200 Park Avenue
New York, New York 10166
Facsimile: (212) 801-6400

Attention: Judith Fryer, Esq.

Alan S. Gaynor, Esq.

Hersha Hospitality Trust
148 Sheraton Drive, Box A New Cumberland, Pennsylvania 17070 Facsimile: (717) 774-7383 Attention: Ashish R. Parikh

Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219

Facsimile: (804) 788-8218 Attention: Cameron N. Cosby, Esq.

Randall S. Parks, Esq.

accordingly agreed that the parties shall be entitled to injunctive relief, without the necessity of posting any bond, to prevent any breach of the provisions of this Standstill Agreement and to enforce specifically the terms and provisions hereof in any court having jurisdiction, in addition to any other remedy to which they may be entitled at law or in equity.

[Signatures appear on following page.]

IN WITNESS WHEREOF, the undersigned have executed this Standstill Agreement, on the date first written above.

CNL HOSPITALITY PARTNERS, L.P.

By: CNL HOSPITALITY GP CORP., its general
partner

By:       /s/ Tammie A. Quinlan
Name:     Tammie A. Quinlan
Title:    Senior Vice President

CNL FINANCIAL GROUP, INC.

By:       /s/ Robert A. Bourne
Name:     Robert A. Bourne
Title:    President and Treasurer

HERSHA HOSPITALITY TRUST

By:       /s/ Ashish R. Parikh
Name:     Ashish R. Parikh
Title:    Chief Financial Officer

HERSHA HOSPITALITY LIMITED PARTNERSHIP By: HERSHA HOSPITALITY TRUST, its general Partner

By:       /s/ Ashish R. Parikh
Name:     Ashish R. Parikh
Title:    Chief Financial Officer

(SIGNATURE PAGE TO STANDSTILL AGREEMENT)

REGISTRATION RIGHTS AGREEMENT

BETWEEN

CNL HOSPITALITY PARTNERS, L.P.

AND

HERSHA HOSPITALITY TRUST

DATED April 21, 2003

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

ARTICLE I     DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . .     1
   1.1        DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . .     1

ARTICLE II    REGISTRATION RIGHTS. . . . . . . . . . . . . . . . . . . . .     3
   2.1        Demand Registration. . . . . . . . . . . . . . . . . . . . .     3
   2.2        Piggyback Registration . . . . . . . . . . . . . . . . . . .     4
   2.3        Form S-3 . . . . . . . . . . . . . . . . . . . . . . . . . .     7

ARTICLE III   REGISTRATION PROCEDURES. . . . . . . . . . . . . . . . . . .     7
   3.1        Filings; Information . . . . . . . . . . . . . . . . . . . .     7
   3.2        Registration Expenses. . . . . . . . . . . . . . . . . . . .    10

ARTICLE IV    INDEMNIFICATION AND CONTRIBUTION     11
   4.1        Indemnification By HT. . . . . . . . . . . . . . . . . . . .    11
   4.2        Indemnification By Selling Holders . . . . . . . . . . . . .    11
   4.3        Conduct Of Indemnification Proceedings . . . . . . . . . . .    12
   4.4        Contribution . . . . . . . . . . . . . . . . . . . . . . . .    13

ARTICLE V     MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . .    13
   5.1        Participation In Underwritten Registrations. . . . . . . . .    13
   5.2        Rule 144 . . . . . . . . . . . . . . . . . . . . . . . . . .    14
   5.3        Market Stand-Off . . . . . . . . . . . . . . . . . . . . . .    14
   5.4        Amendments, Waivers, Etc . . . . . . . . . . . . . . . . . .    14
   5.5        Counterparts . . . . . . . . . . . . . . . . . . . . . . . .    14
   5.6        Entire Agreement . . . . . . . . . . . . . . . . . . . . . .    14
   5.7        Articles, Sections . . . . . . . . . . . . . . . . . . . . .    14
   5.8        Governing Law. . . . . . . . . . . . . . . . . . . . . . . .    15
   5.9        Assignment of Registration Rights. . . . . . . . . . . . . .    15
   5.10       Parties in Interest. . . . . . . . . . . . . . . . . . . . .    15
   5.11       Notices. . . . . . . . . . . . . . . . . . . . . . . . . . .    15
   5.12       Headings . . . . . . . . . . . . . . . . . . . . . . . . . .    16
   5.13       Specific Enforcement . . . . . . . . . . . . . . . . . . . .    16

WHEREAS, pursuant to the Securities Purchase Agreement, HLP issued and sold to CHP and CHP purchased HLP's Preferred Units convertible into shares of HT's Series A Preferred Shares (as defined herein) and Class A Shares (as defined herein);

WHEREAS, it is a condition precedent to the closing of the transactions contemplated by the Securities Purchase Agreement that the parties hereto execute and deliver this Agreement;

NOW, THEREFORE, in consideration of the mutual premises, agreements and covenants contained in this Agreement, the parties hereto, intending to be legally bound, agree as follows:

ARTICLE I

ARTICLE II

(b) If a Demand Registration Statement involves an underwritten offering and the managing Underwriter advises HT in writing that, in its opinion, the number of securities requested to be included in such Demand Registration Statement exceeds the number which can be sold without materially and adversely affecting the offering, HT will include in such Demand Registration Statement the number of such securities which HT is so advised can be sold in such offering without materially and adversely affecting the offering, determined as follows:

(i) first, for each Requesting Holder, such number of securities as is determined by multiplying (x) the securities that are able to be registered as determined by the managing Underwriter, by (y) the fraction of (A) the aggregate number of securities of HT that such Requesting Holder proposes to include in such registration

divided by (B) the total number of securities proposed to be sold in such offering by all Requesting Holders initiating the Demand Registration;

(ii) second, for each remaining holder of HT's securities who holds contractual piggyback registration rights, other than the holders described above in clause (i), if any, such number of securities that is determined by multiplying (x) the remaining securities that are able to be registered as determined by the managing Underwriter, by (y) the fraction of (A) the number of the securities of HT that such holder proposes to include in such registration divided by (B) the total remaining number of securities proposed to be sold in such offering by all such holders exercising piggybank registration rights; and

(iii) third, for HT and each remaining holder of HT's securities other than the holders described above in clauses (i), and (ii), if any, who are permitted by HT to so participate, such number of securities as is determined by multiplying (x) the remaining number of securities that are able to be registered as determined by the managing Underwriter, by (y) the fraction of (A) the number of the securities of HT that HT and such holder proposes to include in such registration divided by (B) the total remaining number of securities proposed to be sold in such offering by HT and all such remaining holders.

(c) If at the time of any demand to register Registrable Securities pursuant to this Section 2.1, HT is engaged in, or has plans to engage in (demonstrated by previously adopted resolutions of HT's Board of Trustees to such effect or a signed engagement letter or letter of intent with respect to such action) within three (3) months of the time of such request, a registered public offering or is engaged in any other significant action which, in the good faith determination of HT's Board of Trustees, would be adversely affected by the requested registration to the material detriment of HT, then HT may at its option direct that such request be delayed for a reasonable period not in excess of ninety (90) days from the effective date of such offering or the date of completion of such other material activity, as the case may be, such right to delay a request under this Section to be exercised by HT not more than once in any one-year period.

(d) HT shall not be required to file a Registration Statement pursuant to this Section 2.1 unless the Holder or Holders demanding such registration propose to dispose of shares of Registrable Securities having an aggregate disposition price (before deduction of underwriting discounts and expenses of sale) of at least the lower of $1,000,000 or, 10% of the fair market value of the Registrable Securities.

(a) If HT proposes to file a registration statement under the Securities Act with respect to an offering or sale of Class A Shares or Series A Preferred Shares for its own account or for the account of another Person (other than a registration statement on Form S-4 or S-8 (or any substitute form or rule, respectively, that may be adopted by the Commission)), HT shall give written notice of such proposed filing to the Holders as soon as reasonably practicable (but in no event less than 30 days before the anticipated filing date), undertaking to provide each

(b) If the managing Underwriter advises HT that the inclusion of Registrable Securities would materially adversely affect the offering (it being agreed that variations in class or series of Registrable securities to be included in such registration statement shall not be deemed to materially and adversely affect the offering), HT shall include in such registration statement, as to each Holder and any other Person or Persons having a contractual right to request their shares be included in such registration, that number of securities which HT is so advised can be sold in such offering without materially and adversely affecting the offering, determined as follows:

(i) In the event HT initiated such registration:

1. first, for the Holders electing to participate in such registration, such number of securities equal to fifty percent (50%) of the number of securities able to be registered as determined by the managing Underwriter provided however, that upon the one time election of HT during each seven-hundred and thirty (730) day period of time hereunder, thirty percent (30%) of the number of securities able to be registered as determined by the managing Underwriter;

2. second, for HT, the remaining number of securities able to be registered as determined by the managing Underwriter; and

3. third, for each remaining Holder of HT's securities who holds contractual piggyback registration rights, other than the Holders described above in clauses (1) and (2), the fraction of such holder's securities proposed to be registered which is obtained by dividing (i) the remaining number of the securities of HT that such holder proposes to include in such registration by (ii) the total remaining number of securities proposed to be sold in

such offering by all such holders; and

4. fourth, for each remaining holder of HT's securities, other than the holders described above in clauses (1), (2) and (3), if any, who are permitted by HT to so participate, such number of securities as is determined by multiplying (a) the remaining securities able to be registered as determined by the managing Underwriter, by (b) the fraction obtained by dividing (i) the number of the securities of HT that such holder proposes to include in such registration by (ii) the total number of securities proposed to be sold in such offering by all such remaining holders.

(ii) In the event a shareholder other than a Holder initiated such registration pursuant to a contractual demand registration right:

1. first, for the Holders electing to participate in such registration, such number of securities equal to seventy-five percent (75%) of the number of securities able to be registered as determined by the managing Underwriter;

2. Second, for the shareholders who are not Holders hereunder, the remaining number of securities able to be registered as determined by the managing Underwriter;

3. third, for each remaining holder of HT's securities who holds contractual piggyback registration rights, other than the holders described above in clauses (1) and (2), the fraction of such holder's securities proposed to be registered which is obtained by dividing (i) the remaining number of the securities of HT that such holder proposes to include in such registration by (ii) the total remaining number of securities proposed to be sold in such offering by all such holders; and

4. fourth, for each remaining holder of HT's securities, other than the holders described above in clauses (1), (2) and (3), if any, who are permitted by HT to so participate, such number of securities as is determined by multiplying (a) the remaining securities able to be registered as determined by the managing Underwriter, by (b) the fraction obtained by dividing (i) the number of the securities of HT that such holder proposes to include in such registration by (ii) the total number of securities proposed to be sold in such offering by all such remaining holders.

If as a result of the provisions of this Section 2.2(b) any Holder shall not be entitled to include all of its Registrable Securities in a registration that such Holder has requested to be so included, such Holder may withdraw such Holder's request to include its Registrable Securities in such registration statement prior to its effectiveness.

(i) HT shall not be required to file an S-3 Registration Statement pursuant to this Section 2.3 within ninety (90) days after the effective date of any registration referred to in Sections 2.1 or 2.2 above.

(ii) HT shall not be required to file a Registration Statement pursuant to this Section 2.4 unless the Holder or Holders requesting registration propose to dispose of shares of Registrable Securities having an aggregate disposition price (before deduction of underwriting discounts and expenses of sale) of at least the lower of $1,000,000 or, 10% of the fair market value of the Registrable Securities.

(iii) If at the time of any request to register Registrable Securities pursuant to this Section 2.3, HT is engaged in, or has plans to engage in (demonstrated by previously adopted resolutions of HT's Board of Trustees to such effect or a signed engagement letter with a proposed Underwriter) within three months of the time of such request, a registered public offering or is engaged in any other significant action which, in the good faith determination of HT's Board of Trustees, would be adversely affected by the requested registration to the material detriment of HT , then HT may at its option direct that such request be delayed for a reasonable period not in excess of one hundred twenty (120) days from the effective date of such offering or the date of completion of such other material activity, as the case may be, such right to delay a request under this Section to be exercised by HT not more than once in any one-year period.

(iv) HT shall give written notice to all Holders of Registrable Securities of the receipt of a request for registration pursuant to this Section 2.3 and shall provide a reasonable opportunity for other Holders to participate in the registration. At the written request of the Holders requesting such registration, such registration shall be for a delayed or continuous offering under Rule 415 under the Securities Act. Subject to the provisions of Section 3.1 hereof, HT will use its reasonable efforts to effect promptly the registration of all shares of Registrable Securities on Form S-3 to the extent requested pursuant to this Section 2.3 by the Holder or Holders of such Registrable Securities for purposes of disposition.

ARTICLE III

(a) HT will expeditiously prepare and file with the Commission a registration statement on any form for which HT then qualifies and which counsel for HT shall deem appropriate and available for the sale of the Registrable Securities to be registered thereunder in accordance with the intended method of distribution thereof, and use its commercially reasonable efforts to cause such filed registration statement to become and remain effective with respect to any Demand Registration or Piggyback Registration, for such period, equal to at least ninety (90) days, as may be reasonably necessary to effect the sale of such securities, HT may require Selling Holders to promptly furnish in writing to HT such information regarding such Selling Holders, the plan of distribution of the Registrable Securities and other information as HT may be legally required to disclose in connection with such registration.

(b) HT will, if requested, prior to filing such registration statement or any amendment or supplement thereto, furnish to the Selling Holders, and each applicable managing Underwriter, if any, copies thereof, and thereafter furnish to the Selling Holders and each such Underwriter, if any, such number of copies of such registration statement, amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein) and the prospectus included in such registration statement (including each preliminary prospectus) as the Selling Holders or each such Underwriter may reasonably request in order to facilitate the sale of the Registrable Securities by the Selling Holders.

(c) After the filing of the registration statement, HT will promptly notify the Selling Holders of any stop order issued or, to HT's knowledge, threatened to be issued by the Commission and use its commercially reasonable efforts to prevent the entry of such stop order or to remove it if entered.

(d) In addition to the requirements imposed on HT elsewhere herein, HT will use its commercially reasonable efforts to qualify the Registrable Securities for offer and sale under such other securities or blue sky laws of such jurisdictions in the United States as the Selling Holders may reasonably request; keep each such registration or qualification (or exemption therefrom) effective during the period in which such registration statement is required to be kept effective; and do any and all other acts and things which may be necessary or advisable to enable each Selling Holder to consummate the disposition of the Registrable Securities owned by such Selling Holder in such jurisdictions; provided that HT will not be required to (i) qualify to generally do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3.1(d), (ii) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction.

(e) HT will as promptly as is practicable notify the Selling Holders, at any time when a prospectus relating to the sale of the Registrable Securities is required by law to be delivered in connection with sales by an Underwriter or dealer, of the occurrence of any event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and promptly make available to the Selling Holders and to the Underwriters any such supplement or amendment. Upon receipt of any notice of the occurrence of any event of the kind described in the preceding sentence, the Selling Holders will forthwith

discontinue the offer and sale of Registrable Securities pursuant to the registration statement covering such Registrable Securities until receipt by the Selling Holders and the Underwriters of the copies of such supplemented or amended prospectus and, if so directed by HT, the Selling Holders shall deliver to HT all copies, other than permanent file copies then in the possession of the Selling Holders, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice. In the event HT shall give such notice, HT shall extend the period during which such registration statement shall be maintained effective as provided in Section 3.1(a) hereof by the number of days during the period from and including the date of the giving of such notice to the date when HT shall make available to the Selling Holders such supplemented or amended prospectus. Furthermore, in the event HT shall give such notice, HT shall, as promptly as is practical, prepare a supplement or post-effective amendment to the registration statement or a supplement to the related prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder, such prospectus will 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, in light of the circumstances under which they were made, not misleading.

(f) HT will enter into customary agreements (including an underwriting agreement in customary form) and take such other actions (including, without limitation, participation in road shows and investor conference calls) as are required in order to expedite or facilitate the sale of such Registrable Securities.

(g) At the request of any Underwriter in connection with an underwritten offering, HT will furnish (i) an opinion of counsel, addressed to the Underwriters, covering such customary matters as the managing Underwriter may reasonably request and (ii) a comfort letter or comfort letters from HT's independent public accountants covering such customary matters as the managing Underwriter may reasonably request.

(h) If requested by the managing Underwriter or any Selling Holder, HT shall promptly incorporate in a prospectus supplement or post effective amendment such information as the managing Underwriter or any Selling Holder reasonably requests to be included therein, including without limitation, with respect to the Registrable Securities being sold by such Selling Holder, the purchase price being paid therefor by the Underwriters and with respect to any other terms of the underwritten offering of the Registrable Securities to be sold in such offering, and promptly make all required filings of such prospectus supplement or post effective amendment.

HT shall not be required to provide any information under this subparagraph (i) if (A) HT believes, after consultation with counsel for HT, that to do so would cause HT to forfeit an attorney-client privilege that was applicable to such information or (B) if HT has requested and been granted from the Commission confidential treatment of such information contained in any filing with the Commission or documents provided supplementally or otherwise.

(j) HT shall cause the Class A Common Shares included in any registration statement to be listed on each securities exchange on which securities issued by HT are then listed, if the Registrable Securities so qualify.

(k) HT shall provide a CUSIP number for the Registrable Securities included in any registration statement not later than the effective date of such registration statement.

(l) HT shall cooperate with each Selling Holder and each Underwriter participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the National Association of Securities Dealers, Inc.

(m) HT shall participate in any financial roadshow organized for purposes of publicizing the sale or other disposition of the Registrable Securities. Such participation shall include, but not be limited to, dispatch by HT of personnel to assist in each presentation made during the roadshow, and provision of HT data needed for purposes of the roadshow.

(n) HT shall, during the period when the prospectus is required to be delivered under the Securities Act, promptly file all documents required to be filed with the Commission pursuant to Section 13(a) of the Exchange Act.

ARTICLE IV

preliminary prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only with reference to information furnished in writing by or on behalf of such Selling Holder expressly for use in any registration statement or prospectus relating to the Registrable Securities, or any amendment or supplement thereto or any preliminary prospectus. Each Selling Holder also agrees to indemnify and hold harmless any Underwriters of the Registrable Securities, their officers and directors and each person who controls such Underwriters on substantially the same basis as that of the indemnification of HT provided in this Section 4.2, but only with reference to information furnished in writing by or on behalf of such Selling Holder expressly for use in any registration statement or prospectus relating to the Registrable Securities, or any amendment or supplement thereto or any preliminary prospectus. Each such Selling Holder's liability under this Section 4.2 shall be limited to an amount equal to the net proceeds (after deducting the applicable underwriting discount and expenses associated with such Selling Holder's Registrable Securities sold thereunder) received by such Selling Holder from the sale of such Registrable Securities by such Selling Holder. The obligation of each Selling Holder hereunder shall be several and not joint.

(a) If the indemnification provided for in this Article IV is, by operation of law unavailable to an Indemnified Party in respect of any losses, claims, damages or liabilities in respect of which indemnity is to be provided hereunder, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall to the fullest extent permitted by law, contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative fault of such party in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of HT, a Selling Holder and the Underwriters shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

(b) HT and each Selling Holder agrees that it would not be just and equitable if contribution pursuant to this Section 4.4 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages or liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Each Selling Holder shall not be required to contribute any amount in excess of the amount by which the net proceeds of the offering (before deducting expenses) received by such Selling Holder exceeds the amount of any damages which such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

ARTICLE V

representations and warranties as to (i) such Person's ownership of his or its Registrable Securities to be sold or transferred in a manner which is free and clear of all liens, claims and encumbrances, (ii) such Person's power and authority to effect such transfer and (iii) such matters pertaining to compliance with securities laws as may reasonably be requested; provided further, however, that the obligation of such Person to indemnify pursuant to any such underwriting agreements shall be several, and not joint and several, among such Persons selling Registrable Securities, and the liability of each such Person will be in proportion to, and provided further that such liability will be limited to, the net amount received by such Person from the sale of such Person's Registrable Securities pursuant to such registration.

(b) If, after the date hereof and prior to the Commission declaring the registration statement to be filed pursuant to Section 2.1, 2.2 or 2.3 effective under the Securities Act, HT grants to any Person any registration rights with respect to any HT securities which contain terms that are more favorable to such other Person than those provided in this Agreement are to the Holder, then HT forthwith shall grant (by means of an amendment to this Agreement or otherwise) identical registration rights to all Holders hereunder.

(a) If to CHP, to:

CNL Hospitality Properties, Inc.

CNL Center at City Commons 450 South Orange Avenue
Orlando, Florida 32801-3336 Facsimile:

Attn: Brian Strickland

with a copy (which shall not constitute notice hereunder) to:

Greenberg Traurig, LLP
The MetLife Building
200 Park Avenue
New York, New York 10166
Facsimile: 212-801-6400
Attn: Judith Fryer, Esq.

Alan S. Gaynor, Esq.

(b) If to HT or HLP, to:

Hersha Hospitality Trust
148 Sheraton Drive
Box A
New Cumberland, Pennsylvania 17070 Facsimile: 717-974-7383
Attn: Hasu P. Shah

with a copy (which shall not constitute notice) to:

Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219
Facsimile: 804-788-8218
Attn: Cameron N. Cosby, Esq.

Randall Parks, Esq.

Any of the above addresses may be changed at any time by notice given as provided above; provided, however, that any such notice of change of address shall be effective only upon receipt. All notices, requests or instructions given in accordance herewith shall be deemed received on the date of delivery, if hand delivered, on the date of receipt, if telecopied, three business days after the date of mailing, if mailed by registered or certified mail, return receipt requested, and one business day after the date of sending, if sent by Federal Express or other recognized overnight courier.

Accordingly, CHP shall be entitled, in addition to any other remedies which may be available, including money damages, to obtain specific performance of the terms of this Agreement. In the event of any action to enforce this Agreement specifically, HT hereby waive the defense that there is an adequate remedy at law. In no event shall HT be entitled to seek specific performance with respect to any of CHP's obligations arising under this Agreement.

IN WITNESS WHEREOF, HT and each Holder has caused this Agreement to be signed by its duly authorized officer as of the date first written above.

CNL HOSPITALITY PARTNERS, L.P.

By: CNL HOSPITALITY GP CORP.,
Its general partner

By: /s/ Tammie A. Quinlan
Name:  Tammie  A.  Quinlan
Title: Senior  Vice  President

HERSHA HOSPITALITY TRUST

By: /s/ Ashish R. Parikh
Name:  Ashish  R.  Parikh
Title: Chief  Financial  Officer

(SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)

LIMITED PARTNERSHIP AGREEMENT

OF

HT/CNL METRO HOTELS, L.P.

BY AND BETWEEN

CNL HOSPITALITY PARTNERS, L.P.

AND

HERSHA HOSPITALITY LIMITED PARTNERSHIP

DATED: AS OF APRIL 21, 2003

                                TABLE OF CONTENTS

ARTICLE  1  FORMATION  AND  CONTINUATION . . . . . . . . . . . . . . . . . .   1

     Section  1.1     Organization . . . . . . . . . . . . . . . . . . . . .   1

     Section  1.2     Agreement;  Effect  of  Inconsistencies  with  Act . .   1

     Section  1.3     Name . . . . . . . . . . . . . . . . . . . . . . . . .   2

     Section  1.4     Effective  Date. . . . . . . . . . . . . . . . . . . .   2

     Section  1.5     Term . . . . . . . . . . . . . . . . . . . . . . . . .   2

     Section  1.6     Certificate  of  Limited  Partnership. . . . . . . . .   2

     Section  1.7     Registered  Agent  and  Office . . . . . . . . . . . .   2

     Section  1.8     Principal  Place  of  Business . . . . . . . . . . . .   2

     Section  1.9     Foreign  Qualifications. . . . . . . . . . . . . . . .   3

     Section  1.10     Partner's  Qualifications . . . . . . . . . . . . . .   3

ARTICLE  2  DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . .   3

     Section  2.1     General  Interpretive  Principles. . . . . . . . . . .   3

     Section  2.2     Defined  Terms . . . . . . . . . . . . . . . . . . . .   3

ARTICLE  3  BUSINESS,  PURPOSES  AND  POWERS . . . . . . . . . . . . . . . .  11

     Section  3.1     Business  and  Purpose . . . . . . . . . . . . . . . .  11

     Section  3.2     Powers . . . . . . . . . . . . . . . . . . . . . . . .  11

     Section  3.3     Limitations  on  Scope  of  Business . . . . . . . . .  13

     Section  3.4     Proposed  Acquisitions;  The  Investment  Committee. .  13

ARTICLE  4  PARTNERS,  CAPITAL  CONTRIBUTIONS  AND  FINANCING. . . . . . . .  14

     Section  4.1     Identity  of  Partners  and  Percentage  Interests . .  14

     Section  4.2     Initial  Capital  Contributions. . . . . . . . . . . .  14

     Section  4.3     Additional  Contributions After Initial Capital
                      Contributions. . . . . . . . . . . . . . . . . . . . .  15

     Section  4.4     Capital  Accounts. . . . . . . . . . . . . . . . . . .  16


                                        i

     Section  4.5     Return  of  Capital  Contributions . . . . . . . . . .  17

     Section  4.6     No  Third  Party  Beneficiary  Rights. . . . . . . . .  17

ARTICLE  5  ALLOCATIONS  AND  DISTRIBUTIONS. . . . . . . . . . . . . . . . .  17

     Section  5.1     Distributions. . . . . . . . . . . . . . . . . . . . .  17

     Section  5.2     Determination  of  Profits  and  Losses. . . . . . . .  18

     Section  5.3     General  Allocation  Rules . . . . . . . . . . . . . .  19

     Section  5.4     Income  Tax  Elections . . . . . . . . . . . . . . . .  20

     Section  5.5     Income  Tax  Allocations . . . . . . . . . . . . . . .  20

     Section  5.6     Transfers  During  Fiscal  Year. . . . . . . . . . . .  21

     Section  5.7     [Intentionally  Omitted] . . . . . . . . . . . . . . .  21

     Section  5.8     Special  Allocations  to  Comply with Section 704

                      Regulations. . . . . . . . . . . . . . . . . . . . . .  21

     Section  5.9     Taxation  as  a  Partnership . . . . . . . . . . . . .  24

     Section  5.10    Assignees  Treated  as  Partners . . . . . . . . . . .  24

     Section  5.11    Tax  Matters  Partner. . . . . . . . . . . . . . . . .  24

ARTICLE  6  RIGHTS  AND  DUTIES  OF  PARTNERS. . . . . . . . . . . . . . . .  25

     Section  6.1     Management . . . . . . . . . . . . . . . . . . . . . .  25

     Section  6.2     Liability  of  Partners. . . . . . . . . . . . . . . .  25

     Section  6.3     Indemnification. . . . . . . . . . . . . . . . . . . .  26

     Section  6.4     Major  Decisions . . . . . . . . . . . . . . . . . . .  26

     Section  6.5     Intentionally  Omitted.. . . . . . . . . . . . . . . .  28

     Section  6.6     Signing  of  Documents . . . . . . . . . . . . . . . .  28

     Section  6.7     Right  to  Rely  on  Authority  of  General  Partner .  28

     Section  6.8     Outside  Activities. . . . . . . . . . . . . . . . . .  29

     Section  6.9     Limitations  on  Powers  of  Partners. . . . . . . . .  29

     Section  6.10    Prohibition  Against  Partition;  Distribution in Kind  29


                                       ii

     Section  6.11    Budgets. . . . . . . . . . . . . . . . . . . . . . . .  29

ARTICLE  7  BOOKS  OF  ACCOUNT  AND  REPORTS;  ACCESS  TO  RECORDS . . . . .  30

     Section  7.1     Books  and  Records. . . . . . . . . . . . . . . . . .  30

     Section  7.2     Banking. . . . . . . . . . . . . . . . . . . . . . . .  30

     Section  7.3     Reports  to  Partners. . . . . . . . . . . . . . . . .  31

     Section  7.4     Accountants. . . . . . . . . . . . . . . . . . . . . .  31

     Section  7.5     Interim  Tax  Information. . . . . . . . . . . . . . .  31

ARTICLE  8  TRANSFERS  OF  PARTNERSHIP  INTERESTS  AND  ECONOMIC RIGHTS. . .  31

     Section  8.1     Partner's  or  Assignee's  Right  to  Transfer . . . .  31

     Section  8.2     Conditions  of  Transfer . . . . . . . . . . . . . . .  31

     Section  8.3     Partners'  Rights  of  First  Offer  and First Refusal  32

     Section  8.4     Creation  of  Lien  and  Security  Interest. . . . . .  34

     Section  8.5     Non-Complying  Transfers  Void . . . . . . . . . . . .  34

ARTICLE  9  ADMISSION  OF  ASSIGNEES . . . . . . . . . . . . . . . . . . . .  34

     Section  9.1     Rights  of  Assignees. . . . . . . . . . . . . . . . .  34

     Section  9.2     Admission  of  Assignee  as  a  Partner. . . . . . . .  34

     Section  9.3     Admission  of  Permitted  Transferee  as  Partner. . .  34

ARTICLE  10  DEFAULT  AND  REMEDIES. . . . . . . . . . . . . . . . . . . . .  35

     Section  10.1    Events  of  Default. . . . . . . . . . . . . . . . . .  35

     Section  10.2    Remedies  upon  the Occurrence of an Event of Default.  36

ARTICLE  11  BUY-SELL. . . . . . . . . . . . . . . . . . . . . . . . . . . .  38

     Section  11.1    Initiation  of  Procedure. . . . . . . . . . . . . . .  38

     Section  11.2    Response.. . . . . . . . . . . . . . . . . . . . . . .  40

     Section  11.3    Closing. . . . . . . . . . . . . . . . . . . . . . . .  40

ARTICLE  12  SALE  OF  PROPERTY. . . . . . . . . . . . . . . . . . . . . . .  41


                                      iii

     Section 12.1     Partner's Right to Make Proposed Offer or to Obtain
                      Third Party Offer. . . . . . . . . . . . . . . . . . .  41

     Section  12.2    Responding  Partner's  Option  to  Purchase. . . . . .  41

     Section  12.3    Sale  of  Property . . . . . . . . . . . . . . . . . .  42

     Section  12.4    Exceptions . . . . . . . . . . . . . . . . . . . . . .  43

     Section  12.5    Third  Party  Offer. . . . . . . . . . . . . . . . . .  43

     Section  12.6    Cash  Price. . . . . . . . . . . . . . . . . . . . . .  44

     Section  12.7    Termination  of  Property  Management  Agreement . . .  44

     Section  12.8    Three  Year  Condition . . . . . . . . . . . . . . . .  44

ARTICLE  13  SPECIAL  RIGHTS  OF  LIMITED  PARTNER  UNITS. . . . . . . . . .  44

     Section  13.0    Exchangeability. . . . . . . . . . . . . . . . . . . .  44

     Section  13.1.   Mechanics. . . . . . . . . . . . . . . . . . . . . . .  44

     Section  13.2    Determination  of  Fair  Market  Value . . . . . . . .  47

     Section  13.3    Payment  of  Note/Sale  of  Property . . . . . . . . .  54

     Section  13.4    Release  from  Liability . . . . . . . . . . . . . . .  55

ARTICLE  14  CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . .  54

     Section  14.1    55

     Section  14.2    56

     Section  14.3    56

ARTICLE  15  DISSOLUTION  OF  COMPANY. . . . . . . . . . . . . . . . . . . .  57

     Section  15.1    Events  Causing  Dissolution . . . . . . . . . . . . .  57

     Section  15.2    Winding  Up. . . . . . . . . . . . . . . . . . . . . .  57

     Section  15.3    Application  of  Assets  in  Winding  Up . . . . . . .  57

     Section  15.4    Negative  Capital  Accounts. . . . . . . . . . . . . .  58

     Section  15.5    Termination. . . . . . . . . . . . . . . . . . . . . .  59

ARTICLE  16  MISCELLANEOUS  PROVISIONS . . . . . . . . . . . . . . . . . . .  59


                                       iv

     Section  16.1    Amendment  and  Modification . . . . . . . . . . . . .  59

     Section  16.2    Parties  in  Interest. . . . . . . . . . . . . . . . .  59

     Section  16.3    Notices. . . . . . . . . . . . . . . . . . . . . . . .  59

     Section  16.4    Counterparts . . . . . . . . . . . . . . . . . . . . .  60

     Section  16.5    Entire  Agreement. . . . . . . . . . . . . . . . . . .  60

     Section  16.6    Governing  Law;  Choice  of  Forum . . . . . . . . . .  61

     Section  16.7    Public  Announcements. . . . . . . . . . . . . . . . .  61

     Section  16.8    Headings . . . . . . . . . . . . . . . . . . . . . . .  61

     Section  16.9    Articles,  Sections. . . . . . . . . . . . . . . . . .  61

     Section  16.10   Binding  Effect. . . . . . . . . . . . . . . . . . . .  61

     Section  16.11   Jury  Trial  Waiver. . . . . . . . . . . . . . . . . .  61

     Section  16.12   Incorporation  of  Recitals. . . . . . . . . . . . . .  62

LIMITED PARTNERSHIP AGREEMENT

B Pursuant to this Agreement, during the one year period commencing on the Effective Date, it is the desire of the Partners that all real estate acquisition and development opportunities that are known to the General Partner and/or HHMLP meeting certain criteria be referred, on an exclusive basis, to the Company for consideration by its Investment Committee (as defined herein).

C. The parties hereto further desire to enter into this Agreement to provide for the harmonious management of the Company.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Partners agree as follows:

ARTICLE 1

FORMATION AND CONTINUATION

valid from the effective date of such interpretation or amendment. Each Partner shall be entitled to rely on the provisions of this Agreement, and no Partner shall be liable to the Company or to any other Partner for any action or refusal to act taken in good faith reliance on this Agreement. The Partners and the Company agree that the duties and obligations imposed on the Partners as such shall be those set forth in this Agreement, which is intended to govern the relationship among the Company and the Partners, notwithstanding any provision of the Act or common law to the contrary.

ARTICLE 2

DEFINITIONS

ACT: The Delaware Revised Uniform Limited Partnership Act in its present form or as amended from time to time.

ACQUISITION PROFILE: Such investment criteria, characteristics and parameters for an investment in real estate as agreed to by the Partners and set forth in detail on Exhibit A attached hereto, which shall include, without limitation, market conditions, asset size, franchise brand, asset value and desired investment returns, all of which shall be considered by the members of the Investment Committee in connection with their deliberation as to whether to recommend for consideration a Proposed Transaction to the Partners.

ADDITIONAL CAPITAL CONTRIBUTIONS: The additional Capital Contributions required to be made by the Partners pursuant to Section 4.3 including the Capital Contribution made by a Nondefaulting Partner for a Defaulting Partner pursuant to Section 10.2.

ADJUSTED BASIS: The basis for determining gain or loss for federal income tax purposes from the sale or other disposition of property, as defined in Section 1011 of the Code.

ADMINISTRATION FEE: A cumulative quarterly administration fee payable to the General Partner equal to 8.75 basis points (.0875%) of the aggregate cost of the Properties at a fiscal quarter end during the term of this Agreement.

AFFILIATE: and all derivations thereof, shall have the meaning set forth in Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and the rules thereunder and shall include, without limitation, for the avoidance of doubt, (a) the officers, directors or trustees of the Company, any Subsidiary, or any Partner, (b) any Person directly or indirectly owning, controlling or holding the power to vote 5% or more of the outstanding voting securities of the Company, any Subsidiary, or any Partner, and (c) any Person 5% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with power to vote by the Company, any Subsidiary or any Partner.

AGREEMENT: This Limited Partnership Agreement in its present form or as amended, supplemented or restated from time to time.

APPROVED ACQUISITION: Any proposed Acquisition of a Property which has been approved by the Investment Committee and by the Partners.

ASSIGNEE: A Person to whom a Partnership Interest is Transferred and who is not admitted as a Partner.

BUSINESS DAY: Any day other than a Saturday, a Sunday or a day on which national banks in New York City, New York are not open for business or are authorized by law to close.

CAPITAL ACCOUNT: The capital account of a Partner maintained in accordance with Section 4.4.

CAPITAL CONTRIBUTION: Any money or property from time to time contributed by a Partner to the Company, including Additional Capital Contributions.

CAPITAL PROCEEDS: The cash proceeds received by the Company from a Capital Transaction (excluding the proceeds of business interruption insurance) which are not used by the Company to pay for the costs and expenses incurred in connection with the Capital Transaction, including, in the case of casualty or condemnation, the costs and expenses of collecting any insurance proceeds or the condemnation award, as the case may be. Capital Proceeds shall include all payments of principal of, and interest on, any promissory note or other obligation received by the Company in connection with a Capital Transaction and shall be increased by any reduction of reserves previously established out of Capital Proceeds.

CAPITAL TRANSACTION: A transaction in which the Company (i) borrows money,(ii) sells, exchanges or otherwise disposes of all or any part of its or a Subsidiary's property, including a sale or other disposition pursuant to a condemnation, or (iii) receives the proceeds of property damage insurance, or any other transaction that, in accordance with GAAP, is considered capital in nature.

CARRYING VALUE: Carrying Value means, with respect to any asset, the Adjusted Basis of the asset, except as follows:

(i) the initial Carrying Value of an asset contributed by a Partner to the Company after the Effective Date shall be the gross fair market value of the asset, as agreed to by the Partners at the time the asset is contributed;

(iii) the Carrying Value of an asset of the Company distributed to a Partner shall be adjusted to equal the gross fair market value of the asset on the date of distribution as reasonably determined by the Partners; and

(iv) the Carrying Values of the Company's and the Subsidiaries' assets shall be increased (or decreased) to reflect any adjustments to the Adjusted Basis of those assets pursuant to Sections 734(b) or 743(b) of the Code, but only to the extent that those adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-l(b)(2)(iv)(m) and Section 5.2(g); but the Carrying Values shall not be adjusted pursuant to this clause (iv) to the extent the Partners reasonably determine that an adjustment pursuant to clause (ii) above is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this clause (iv).

If the Carrying Value of an asset is determined or adjusted pursuant to clauses
(i), (ii) or (iv), such Carrying Value shall thereafter be adjusted by the Depreciation taken into account with respect to the asset for purposes of computing Profit and Loss.

CERTIFICATE: The Certificate of Limited Partnership of the Company filed with the Secretary of State of the State of Delaware, as amended from time to time in accordance with the Act.

CLASS A COMMON SHARES: The authorized shares of Priority Class A Common Shares of HT, par value $.01 per share.

CODE: The Internal Revenue Code of 1986, as in effect and hereafter amended.

COMPANY: The limited partnership formed pursuant to this Agreement, and any successor limited partnership which continues the business of the Company, and is a reformation or reconstitution of the Company.

COMPANY LOAN: Any obligation for borrowed money, and any bonds, debentures, notes or other evidences of indebtedness that constitute an obligation and indebtedness of the Company.

DEFAULTING PARTNER: A Partner or Partners with respect to which an Event of Default has occurred and is continuing.

DEPRECIATION: For each Fiscal Year, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such Fiscal Year, except that if the Carrying Value of an asset differs from its Adjusted Basis on the Effective Date or at the beginning of a subsequent Fiscal Year, Depreciation shall be determined in a manner permitted by the Regulations promulgated under Section 704(c). To the extent consistent with such Regulations, Depreciation shall be an amount which bears the same ratio to the beginning Carrying Value as the federal income tax depreciation, amortization or other cost recovery deduction for the Fiscal Year (or part thereof) bears to such beginning Adjusted Basis.

DISCRETIONARY CAPITAL shall mean an amount up to $10 million that was contributed by CHP to HLP in consideration for HLP partnership units (pursuant to the terms of the Securities Purchase Agreement) and which is used pursuant to the Securities Purchase Agreement by HLP for discretionary purposes unrelated to transactions contemplated by this Agreement.

DISTRIBUTION: A transfer of property (including cash) by the Company to a Partner or an Assignee on account of a Unit pursuant to Section 5.1 or
Section 15.3.

ECONOMIC RIGHTS: With respect to an Assignee, the Assignee's rights to receive allocations of Profits and Losses and Distributions.

EMERGENCY COSTS: Costs and expenses required to (a) correct a condition that if not corrected would endanger imminently the preservation or safety of a Property or the Properties or the safety of tenants, guests or other persons lawfully on or using a Property, (b) avoid the imminent suspension of any necessary service in or to a Property, or (c) prevent any of the Partners or any Subsidiary from being subjected imminently to criminal or substantial civil penalties or damages.

EVENT OF DEFAULT: As defined in Section 10.1.

FISCAL QUARTER: Each calendar quarter in each Fiscal Year.

FISCAL YEAR: The calendar year.

GAAP: United States generally accepted accounting principles consistently applied from accounting period to accounting period and within each such accounting period.

GENERAL PARTNER: HLP, or any successor general partner appointed pursuant to Section 6.1.

GENERAL PARTNER PREFERRED DISTRIBUTION: A cumulative per annum (but not compounded) return on the Unreturned Capital Contributions attributable to each General Partner Unit equal to thirteen percent (13%) for the period during the term of this Agreement

GENERAL PARTNER UNITS: A Partnership Interest of the General Partner representing the Partnership Interests of the General Partner and includes all benefits to which the General Partner is entitled, as provided in this Agreement, together with all obligations of the General Partner to comply with the terms and provisions of this Agreement.

HT: shall mean Hersha Hospitality Trust, a Maryland real estate investment trust and General Partner of HLP.

INITIAL CAPITAL CONTRIBUTIONS: The Capital Contributions made by the Partners pursuant to Section 4.2.

INSTITUTIONAL LENDER: A commercial or savings bank, savings and loan association, public or privately-held fund engaged in real estate or corporate lending, pension fund, insurance company, endowment fund or trust, real estate investment trust, government agency, or quasi-governmental agency, such as a board, bureau, authority or department of any federal, state or local government, any corporation established by or for the benefit of any federal, state or local governmental agency or authority, any asset manager or investment advisor acting on behalf of any such entity, or any entity composed of one or more of the foregoing.

LIMITED PARTNER OR LIMITED PARTNER: As defined in the Preamble.

LOSS: As defined in Section 5.2.

LIMITED PARTNER PREFERRED DISTRIBUTION: A cumulative per annum (but not compounded) return on the Unreturned Capital Contributions attributable to each Limited Partner Unit equal to ten and one-half percent (10.5%) for the period during the term of this Agreement.

LIMITED PARTNER UNITS: A Partnership Interest of the Limited Partner representing the Partnership Interests of the Limited Partner and includes all benefits to which the Limited Partner may be entitled, as provided in this Agreement, together with all obligations of such Limited Partner to comply with the terms and provisions of this Agreement, which benefits and obligations shall include, without limitation, those certain benefits set forth in Article 13 hereof.

MATURITY: With respect to any Company Loan, the maturity date of such Company Loan as set forth in the documents evidencing such Company Loan, including for this purpose the maturity date or accelerated maturity date, if applicable, that results by virtue of an acceleration of the maturity date of a Company Loan pursuant to the terms of the documents evidencing such indebtedness.

MORTGAGE: Any mortgage, deed of trust, or similar security document.

NECESSARY EXPENDITURES: (a) all Emergency Costs, and (b) all other expenditures whether or not of a recurring nature that are necessary for the Company, or any Subsidiary to

preserve, operate, maintain, improve or protect the Property consistent with any approved Subsidiary Budget, including payment of any amounts due under any Property Management Agreement, insurance payments, real estate tax payments, utility costs, repair and maintenance costs, costs of compliance with federal, state and local laws, codes, rules or regulations, and any other operating expenses or capital expenses set forth in each Subsidiary Budget or otherwise approved by the Partners and including payment of the principal balance of a Company Loan upon its Maturity, but excluding payment of the principal balance of a Company Loan prior to its Maturity, unless such payment has been approved in writing by the Limited Partner in accordance with Section 6.4.

NET CASH FLOW: For any specified period, an amount equal to the sum of (i) all cash revenues received by the Company during such period from any source (including distributions from Subsidiaries and proceeds of business interruption insurance, but excluding funds received as Capital Contributions or Capital Proceeds), and (ii) amounts set aside as reserves during earlier periods where, and to the extent, such reserves are determined by the General Partner to be no longer reasonably necessary in the efficient conduct of the Company's or any Subsidiary's business or otherwise required by the Property Management Agreements reduced by the sum of (w) cash expenditures by the Company during such period for real estate taxes, management fees and other costs and expenses in connection with the normal conduct of the Company's business (excluding the Administration Fee), (x) all payments by the Company during such period of principal of and interest on loans and other obligations of the Company for borrowed money, including loans made by a Partner to the Company, (y) all cash expenditures by the Company during such period for the acquisition of property, for construction period interest and taxes and for loan fees, whether or not capitalized, and for capital improvements and/or replacements, and (z) such reserves as established for working capital, maintenance, repairs, replacements, capital improvements, contingent or unforeseen liabilities or obligations and to meet anticipated expenses during such period as are reasonably necessary in the efficient conduct of the Company's business, or are required by the Property Management Agreements, but only to the extent the payments and expenditures described in clauses (w), (x) and (y) are not made from funds received as Capital Contributions or Capital Proceeds or from cash reserves of the Company which were established during, and deducted in determining Net Cash Flow for, any earlier period and the reserves described in clause (z) are not established from funds received as Capital Contributions or Capital Proceeds.

NET CASH FLOW PROJECTION: An annual report prepared by the General Partner and approved by the Limited Partner, based on existing Subsidiary Budgets, and anticipated cash flows approved by the Partners for any upcoming fiscal year, which shall set forth a net cash flow projection.

NONDEFAULTING PARTNER: Any Partner other than a Defaulting Partner.

NONRECOURSE DEDUCTIONS: As defined in Regulations Section 1.704-2(b)(1).

ORIGINAL ISSUE PRICE: The amount of $100.00 per Partnership Unit.

PARTNERS: The Limited Partner and the General Partner.

PARTNERSHIP INTEREST: With respect to a Partner, the Partner's entire ownership interest in the Company, including all of the Partner's rights and obligations hereunder including, without limitation, its Economic Rights, voting rights and the obligation to comply with the terms and provisions of this Agreement. A Partnership Interest may be expressed as a number of Partnership Units and all references to Partnership Interests shall include the Partnership Units evidencing such Partnership Interest.

PARTNERSHIP UNIT: A fractional, undivided share of the Partnership Interests of the Company. The number of Partnership Units outstanding and the Percentage Interests in the Company represented by such Partnership Units are set forth on Schedule 4.1(b), as such Schedule may be amended from time to time. The ownership of Partnership Units shall be evidenced by a form of non-negotiable certificate that the Partners may approve from time to time.

PERCENTAGE INTEREST: The percentage interest from time to time of each Partner in the Company, determined by dividing the number of Partnership Units owned by the Partner in question by the total number of Partnership Units outstanding, as such percentage interest is adjusted from time to time pursuant to any provision of this Agreement that provides for such adjustment.

PERMITTED TRANSFEREE: Any person controlling or controlled by the Partner, which, for purposes of this definition, means the ownership of voting securities of the Partner or Subsidiary entity in question in an amount in excess of 50% of all such voting securities which are issued and outstanding.

PERSON: An individual, corporation, trust, association, unincorporated association, estate, partnership, joint venture, limited partnership, limited liability company or other legal entity, including a governmental entity.

PREFERRED DISTRIBUTION: With respect to any period, the sum of the General Partner Preferred Distribution for such period and the Limited Partner Preferred Distribution for such period.

PROFIT: shall have the meaning set forth in Section 5.2.

PROPERTY OR PROPERTIES: shall mean those certain real estate assets acquired from time to time by the Subsidiaries and/or the Company as set forth on Exhibit B, as amended.

PROPERTY ACQUISITION CONTRIBUTIONS: shall have the meaning set forth in Section 4.3(c).

PROPERTY MANAGEMENT AGREEMENT: A management agreement by and between the Property Manager, and the Company in a form approved by the Partners pursuant to this Agreement.

PROPERTY MANAGER: Hersha Hospitality Management L.P., a Pennsylvania limited partnership ("HHMLP"), or any other Property Manager selected by the Partners pursuant to this Agreement.

PROPOSED ACQUISITION: Any and all real estate acquisition and development opportunities which the General Partner and HHMLP may learn of from time to time during the one year period commencing on the Effective Date that are within the business purpose of the Company and/or any Subsidiary, as set forth in Section 3.1(a).

REGULATIONS: The permanent and temporary regulations, and all amendments, modifications and supplements thereof, from time to time promulgated by the Secretary of the Treasury under the Code.

SECRETARY OF STATE: The Secretary of State of the State of Delaware.

SECURITIES PURCHASE AGREEMENT: That certain Securities Purchase Agreement by and among CHP, HT and HLP, dated April 21, 2003.

SUBSIDIARY: A bankruptcy remote single purpose entity that is wholly owned by the Company which may take the form of a limited partnership, limited liability company or other form of entity as determined by the Partners.

SUBSIDIARY BUDGET: As defined in Section 6.11 hereof.

TRANSFER AND TRANSFERRED: A sale, assignment, transfer or other disposition (voluntarily or by operation of law) of, or the granting or creating of a lien, encumbrance or security interest in, a Partnership Interest.

UNRETURNED CAPITAL CONTRIBUTIONS: shall mean the Capital Contributions of a Partner, less, in the case a holder of Limited Partner Units, previous distributions of Capital Proceeds made to it pursuant to Sections 12.3(b)(i) and 15.3(c)(i) or otherwise and in the case of a holder of General Partner Units, previous distributions made of Capital Proceeds to it pursuant to Sections 12.3(b)(ii) and 15.3(c)(ii) or otherwise.

ARTICLE 3

BUSINESS, PURPOSES AND POWERS

(a) The business and purpose of each Subsidiary shall:

(i) subject to the provisions of Section 3.4 below, be to acquire, own, hold, develop, construct, lease, operate, manage, maintain, mortgage, improve, repair, encumber, finance, refinance, sell, redevelop, rehabilitate, improve and otherwise deal with and dispose of, directly or indirectly the Properties; and

(ii) be to conduct all activities reasonably necessary or desirable to accomplish the foregoing purposes and to do anything necessary or incidental to any of the foregoing, which in each case, is not a breach of this Agreement;

(b) Subject to the provisions of Section 3.4, the Company shall form a wholly owned Subsidiary to be the record owner of each Property (or interests therein) for purposes of conducting the Company's business. The provisions contained in each such Subsidiary's organic and constituent documents and instruments shall be pursuant to terms agreed to by the Partners. Unless otherwise agreed to by the General Partner and the Limited Partner, a Subsidiary may only be formed in connection with an Approved Acquisition.

(d) Neither the Company nor a Subsidiary may engage in any other business or activity without the approval of the Partners.

(a) to hold, operate, manage and exercise rights with respect to all property owned by the Company, including the ownership interest in the Subsidiaries;

(b) to sell, transfer, assign, convey, lease, encumber or otherwise dispose of or deal with all or any part of the property of the Company;

(c) to incur expenses and to enter into and carry out contracts, agreements and guaranties necessary to accomplish the business and purposes of the Company;

(d) to raise and provide such funds as may be necessary to further the business and purposes of the Company and to borrow money, incur liabilities and issue promissory notes and other evidences of indebtedness, and to secure the same by security interest or other lien on all or any part of the property of the Company;

(e) to employ or retain, on behalf of the Company, such Persons as the Partners deem advisable in the operation and management of the business of the Company, including such accountants, attorneys and consultants as the General Partner deems appropriate, on such reasonable terms and at such reasonable compensation as the Partners shall determine;

(f) to collect, receive and deposit all sums due or to become due to the Company;

(g) to hire and appoint agents and employees of the Company, to define their duties and to establish their compensation;

(h) to pay any and all taxes, charges and assessments that may be levied, assessed or imposed upon any property of the Company;

(i) to demand, sue for, collect, recover and receive all goods, claims, debts, moneys, interest and demands whatsoever now due or that may hereafter become due or belong to the Company, including the right to institute any action, suit, or other legal proceedings for the recovery of any property, or any part or parts thereof, to the possession of which the Company may be entitled, and to make, execute and deliver receipts, releases and other discharges therefore under seal or otherwise;

(j) to make, execute, endorse, accept, collect and deliver any and all bills of exchange, checks, drafts and notes of the Company;

(k) to defend, settle, adjust, compound, submit to arbitration and compromise all actions, suits, accounts, reckonings, claims and demands whatsoever that now are or hereafter shall be pending between the Company and any Person (other than disputes between or among Partners), at law or in equity, in such manner and in all respects as the Partners shall deem fit;

(l) to secure and maintain insurance against liability and property damage with respect to the activities of the Company;

(m) to cause the Subsidiaries to take any of the actions described in Section 3.2(a) through Section 3.2(l), inclusive; and

(n) to do and perform all acts and things necessary, appropriate, proper, advisable, incidental to, or convenient for, the furtherance and accomplishment of the business and purposes of the Company and the Subsidiaries set forth in Section 3.1.

shall prepare a report indicating whether based upon its review, the Proposed Acquisition falls within the parameters of the Acquisition Profile. In the event such Proposed Acquisition does fall within such parameters, the Investment Committee shall make a recommendation to the Partners that, subject to approval by all of the Partners, the Company should consider consummating the Proposed Acquisition. Upon such Partner approval and consummation of the Proposed Acquisition, the General Partner and the Property Manager shall use their reasonable best efforts to operate such property for the account of the Subsidiary within the parameters of the Subsidiary Budget, pursuant to Section 6.11 hereof.

(b) The Investment Committee shall be comprised of six (6) members, three (3) of whom shall be appointed by the Limited Partner and three
(3) of whom shall be appointed by the General Partner. Each of the Limited Partner and the General Partner may designate in writing one or more alternate members to act in the absence of any one of its representatives. Each Partner may, by written notice to the others, remove any member or alternate member of the Investment Committee appointed by such Partner and appoint a substitute therefor; provided, however, that any new member or alternate member appointed to the Investment Committee by any Partner must either be a partner, member, officer, director or employee of such Partner or of an Affiliate of such Partner or be approved by the Investment Committee members appointed by the other Partner, such approval not to be unreasonably withheld. The members of the Investment Committee and the alternate members appointed by the Limited Partner and the General Partner shall be as set forth on Schedule 3.4 hereof, which Schedule is subject to change from time to time.

(d) Notice of any meeting of the Investment Committee shall be given no fewer than two (2) Business Days and no more than twenty (20) Business Days prior to the date of the meeting. Notice of any meeting of the Investment Committee shall specify the date, time and place of the proposed meeting and the agenda for the meeting (unless such notice is waived in writing). Notice shall be delivered in the manner set forth in Section 16.3 hereof. The attendance of a member of the Investment Committee at a meeting of the Investment Committee shall constitute a waiver of notice of such meeting, except where a member of the Investment Committee attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not properly called or convened.

(e) No member of the Investment Committee shall be entitled to receive any salary or other remuneration or expense reimbursement from the Company or any Subsidiary for his services as a member of the Investment Committee.

(f) Any one or more members of the Investment Committee may participate in a meeting of the Investment Committee by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at a meeting.

ARTICLE 4

PARTNERS, CAPITAL CONTRIBUTIONS AND FINANCING

(a) Partners. The initial Partners of the Company shall be the General Partner and the Limited Partner.

(b) Percentage Interests. The initial Percentage Interests of the Partners shall be as set forth on Schedule 4.1(b).

(a) PARTNERS' OBLIGATIONS TO MAKE ADDITIONAL CAPITAL CONTRIBUTIONS. Notwithstanding anything to the contrary contained herein, the Limited Partner shall have no obligation under this Section 4.3 on and after the earlier of (x) such time as the Limited Partner shall have made aggregate Capital Contributions, which when added to the product obtained by multiplying the Discretionary Capital, if any, by two, equals or exceeds $40.0 million, or
(y) the first anniversary of the Effective Date. Notwithstanding anything to the contrary contained herein, the General Partner shall have no obligation under this Section 4.3 on and after the earlier of (x) such time as the General Partner shall have made aggregate Capital Contributions equal to or in excess of $20.0 million, (y) the first anniversary of the Effective Date, or (z) with respect to HLP, such time as HLP ceases to be the General Partner, provided that HLP shall not then be in breach of this Agreement. From time to time after the full amount of the Initial Capital Contributions required by Section 4.2 has been paid to the Company, the Partners shall be required to make Additional Capital Contributions to fund (A) Necessary Expenditures (including payment of the principal balance of a Company Loan upon its Maturity, but excluding payment of the principal balance of a Company Loan prior to its Maturity, and (B) Property Acquisition Contributions (as herein defined) to the Company, as they are requested pursuant to Section 4.3(b) hereof. The Partners shall contribute such required Additional Capital Contributions (pursuant to a capital call by the General Partner pursuant to this Section 4.3) to the capital of the Company, in cash or current funds, pro rata, in proportion to their Percentage Interests. All such Additional Capital Contributions shall be made by the General Partner and Limited Partner pro-rata, in proportion to their respective Percentage Interests.

(b) PROCEDURE FOR ADDITIONAL CAPITAL CONTRIBUTIONS . If at any time or from time to time Additional Capital Contributions are required (as determined pursuant to Section 4.3(a) or (c)) the General Partner shall deliver to each Partner a written notice requesting such Additional Capital Contributions (a "Capital Call Notice"). The Capital Call Notice shall specify the date (the "Due Date") on or before which such funds are required by the Company, which shall be at least (i) two (2) Business Days after receipt of the Capital Call Notice, for Necessary Expenditures and (ii) fifteen (15) Business Days after receipt of the Capital Call Notice for Property Acquisition Contributions, unless a shorter time is reasonably designated by the General Partner, but in no event less than ten (10) days after receipt of the Capital Call Notice. The Capital Call Notice shall specify whether the funds are required with respect to Necessary Expenditures or Property Acquisition Contributions. Each Partner shall, on or before the Due Date, pay to the Company in cash or current funds such Partner's proportionate share of the amount specified in the Capital Call Notice in accordance with its Percentage Interest against issuance of Partnership Units on the basis of one Partnership Unit for each $100.00 (Original Issue Price) of capital contributed by a Partner. For purposes of Section 10.1(a), a Partner shall be in default if the Partner does not make the payment required by the Capital Call Notice by the Due Date, provided, that HLP shall not be deemed to be in default if such failure was the direct and proximate result of CHP's failure to consummate the purchase of securities under the Securities Purchase Agreement.

(c) PROPERTY ACQUISITION CONTRIBUTIONS: In the event funds are required (collectively, "Property Acquisition Contributions") (i) to negotiate for and/or close an Approved Acquisition (including third-party closing cost) or to fund any deposits required to be made pursuant to any letter of intent or any purchase and sale agreement in connection with an Approved Acquisition, (ii) to pay all third-party costs associated with any negotiations, legal advice, due diligence, analysis or other evaluations of Properties incurred in connection with an Approved Acquisition, (iii) to pay all costs, expenses and other funds required by the Company (whether operating or capital in nature) in connection with startup operations of any Properties or in connection with the formation or startup of any Subsidiary in connection with an Approved Acquisition, (iv) to pay all costs and expenses in connection with the redevelopment of any Property as approved by the Partners in connection with an Approved Acquisition, or (v) to fund any reasonable working capital needs of the Company or any Subsidiary, then and in any such case, the General Partner shall deliver to each Partner, a Capital Call Notice, setting forth the amount and purpose of the requested Property Acquisition Contributions, in accordance with Sections 4.3(b) hereof.

(d) PARTNER'S OBLIGATIONS SEVERAL AND NOT JOINT. The obligations of the Partners to make Additional Capital Contributions pursuant to this
Section 4.3 are several and not joint.

(a) The Company shall establish and maintain a Capital Account for each Partner in accordance with the provisions of Section 704(b) of the Code and the Regulations thereunder.

(b) Each Partner's Capital Account shall be maintained in accordance with the following provisions:

(i) Each Partner's Capital Account shall be credited with the amounts of such Partner's Capital Contributions, such Partner's distributive share of Profits and any items in the nature of income or gain which are specially allocated to the Partner pursuant to Article 5, and the amount of any liabilities of the Company assumed by such Partner or which are secured by any property distributed by the Company to such Partner;

(ii) Each Partner's Capital Account shall be charged with the amounts of cash and the Carrying Value of any property distributed by the Company to such Partner pursuant to any provision of this Agreement, such Partner's distributive share of Losses and any items in the nature of expenses or losses which are specially allocated to the Partner pursuant to Article 5;

(iii) If all or a portion of a Partner's Partnership Interest is Transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the Transferred Units; and

(iv) In determining the amount of any liability for purposes of this Section 4.4(b) Section 752(c) of the Code and any other applicable provisions of the Code and Regulations shall be taken into account.

This Section 4.4(b) and other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Regulations. If the General Partner, with the advice of the Company's independent certified public accountants or legal counsel, reasonably determines that it is prudent to modify the manner in which the Capital Accounts, or any charges or credits thereto (including charges or credits relating to liabilities which are secured by contributions or distributed property or which are assumed by the Company or by Partners), are computed in order to comply with such Regulations, the General Partner may make such modification, but only if it is not likely to have a material effect on the amounts to be distributed to any Partner pursuant to Section 5.1 or pursuant to Section 15.3 upon the dissolution of the Company. The General Partner, with the approval of the Limited Partner, also shall make any adjustments that may be necessary or appropriate to maintain equality between the Capital Accounts of the Partners and the amount of capital reflected on the Company's balance sheet, as computed for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q).

ARTICLE 5

ALLOCATIONS AND DISTRIBUTIONS

(a) NET CASH FLOW.

(i) The General Partner shall distribute Net Cash Flow among the Partners, quarterly within fifteen (15) days after the end of each Fiscal Quarter, in accordance with the following order of priority:

(A) first, Net Cash Flow shall be distributed to the holders of Limited Partner Units, until the Limited Partner Preferred Distributions that are payable to the holders of the Limited Partner Units have been paid in full;

(B) second, subject to Section 5.1 (a)(ii), Net Cash Flow shall be distributed to the General Partner until the Administration Fee that is payable to the General Partner has been paid in full;

(C) third, subject to Section 5.1 (a)(ii), Net Cash Flow shall be distributed to the holders of General Partner Units, until the General Partner Preferred Distributions that are payable to the holder of the General Partner Units have been paid in full;

(D) thereafter, any remaining Net Cash Flow shall be distributed to the Partners in proportion to their Percentage Interests.

(ii) The Administration Fee and the General Partner Preferred Distribution shall be distributed to the General Partner if the Net Cash Flow Projection applicable for such Fiscal Year and other actual financial data for such Fiscal Year existing at the time of the intended distribution provides that the Company will have sufficient Net Cash Flow to pay to the holders of the Limited Partner Units the Limited Partner Preferred Distributions in full for such Fiscal Year. If the Administration Fee and the General Partner Preferred Distribution is not paid in the current Fiscal Quarter pursuant to the previous sentence, the Administration Fee and the General Partner Preferred Distribution will pursuant to its terms accrue and become payable only when, at such time of intended payment, all cumulative accrued and undistributed Limited Partner Preferred Distributions have been paid in full. If the Administration Fee or the General

Partner Preferred Distribution is paid during a Fiscal Year when, at the end of such Fiscal Year, the Limited Partner Preferred Distributions have not been paid in full, the General Partner shall pay to the holders of the Limited Partner Units, to the extent the General Partner has received the Administration Fee and/or the General Partner Preferred Distribution, respectively, within fifteen (15) days after the end of a Fiscal Year, an amount sufficient to satisfy in full the unpaid Limited Partner Preferred Distributions payable to the holders of the Limited Partner Units. To the extent the General Partner is required to pay any monies to the holders of the Limited Partner Units pursuant to the previous sentence of this Section 5.1(a)(ii), such payment shall be treated for purposes of Section 4.4 and this Article 5 as though the General Partner contributed such amount to the Company, and such amount was immediately thereafter distributed to the Limited Partner pursuant to Section 5.1(a)(1)(A).

(a) without regard to any adjustment to basis pursuant to Section 743 of the Code (except as provided in Section 5.2(g));

(b) by including the net gain (after expenses) or net loss (after expenses) realized or incurred by the Company in a Capital Transaction determined on the basis of the Carrying Value of the Property which is the subject of the sale or other disposition;

(c) by taking into account items of deduction attributable to any Property of the Company based upon the Carrying Value of the Property;

(d) by including as an item of gross income any tax-exempt income received by the Company;

(e) by treating as a deductible expense any expenditure of the Company described in Section 705(a)(2)(B) of the Code;

(f) in the event the Carrying Value of a Property is adjusted pursuant to clauses (ii) or (iii) of the definition thereof, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such Property for purposes of computing Profit or Loss; and

(g) to the extent an adjustment to the Adjusted Basis of any asset of the Company pursuant to Sections 734(b) or 743(b) of the Code is required by Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in complete liquidation of a Partner's Partnership Interest, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Adjusted Basis of the asset) or loss (if the adjustment decreases the Adjusted Basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Profit or Loss.

(a) PROFITS. Subject to Section 5.3(c), after giving effect to the special allocations set forth in Section 5.8, all Profit of the Company for each Fiscal Year or part thereof shall be allocated to the Partners in the following order of priority (for purposes of applying this Section 5.3, a Partner's Capital Account balance shall be deemed to be increased by such Partner's share of (i) the allocation for such Fiscal Year pursuant to Sections 5.8(g) and 5.8(h) and (ii) any Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain remaining after such allocation as determined under the Regulations under Code Section 704(b)):

(i) First, to the Partners, in the same ratio and reverse order as Losses were allocated to such Partners pursuant to the provisions of Section 5.3(b) below for all prior fiscal years;

(ii) Second, to the Limited Partners, pro rata until the aggregate Profit allocated pursuant to this Section 5.3(a)(ii) for such Fiscal Year and all prior Fiscal Years is equal to the aggregate amount (if any) of Net Cash Flow distributed during such Fiscal Year and all prior Fiscal Years on account of their Preferred Distributions as determined pursuant to Section 5.1(a)(i)(A);

(iii) Third, to the General Partner until the aggregate Profit allocated pursuant to this Section 5.3(a)(iii) for such Fiscal Year and all prior Fiscal Years, is equal to the sum of the net aggregate amounts (if any) of Net Cash Flow distributed during such Fiscal Year and all prior Fiscal Years on account of its receipt of the Administration Fee in its capacity as General Partner and its Preferred Distribution as determined pursuant to Section 5.1(a)(i)(B) and (C) (taking into account any amounts recontributed by the General Partner pursuant to the provisions of Section 5.1(a)(ii);

(iv) Thereafter, any remaining Profits shall be allocated among the Partners in proportion to their Percentage Interests.

(b) LOSSES. Subject to Section 5.3(c), after giving effect to the special allocations set forth in Section 5.8, all Loss of the Company for each Fiscal Year or part thereof shall be allocated to the Partners in the following order of priority (for purposes of applying this Section 5.3, a Partner's Capital Account balance shall be deemed to be increased by such Partner's share of (i) the allocation for such Fiscal Year pursuant to Sections 5.8(g) and 5.8(h) and (ii) any Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain remaining after such allocation as determined under the Regulations under Code Section 704(b)):

(iii) Thereafter, to the General Partner.

(a) If any portion of the Profit from a Capital Transaction allocated among the Partners pursuant to Section 5.5(a) is characterized as ordinary income under the recapture provisions of the Code, each Partner's distributive share of taxable gain from the sale of the property that gave rise to such Profit (to the extent possible) shall include a proportionate share of the recapture income equal to that Partner's share of prior cumulative depreciation deductions with respect to the property that give rise to the recapture income. In no event, however, shall any Partner be allocated ordinary income hereunder in excess of the amount of gain allocated to the Partner under this Agreement. Any ordinary income that is not allocated to a Partner due to the gain limitation described in the previous sentence shall be allocated among those Partners whose shares of total gain on the sale, exchange or other disposition of the property exceed their respective shares of depreciation from those Company assets being disposed of, in proportion to their relative shares of the total allocable gain.

(a) GENERAL RULE. Notwithstanding the provisions of Section 5.3, if the allocation of a Loss to the Limited Partner for any Fiscal Year pursuant to Section 5.3 would cause or increase a negative balance in such Partner's Adjusted Capital Account (as defined in Section 5.8(f)) on the last day of the Fiscal Year which exceeds the sum of such Partner's share of Minimum Gain on Nonrecourse Liability (as defined in Section 5.8(g)) and such Partner's share of Minimum Gain on Partner Nonrecourse Debt (as defined in Section 5.8(h)) as of the last day of the Fiscal Year, then the portion of the Loss that would have such effect shall instead be specially allocated to the General Partner. For purposes of this Section, a Partner's share of Minimum Gain on Nonrecourse Liability and Minimum Gain on Partner Nonrecourse Debt shall be determined pursuant to Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) and a Partner's share of excess nonrecourse liabilities (as described in Regulations Section 1.752-3(a)(3)) shall be based upon the Partner's Percentage Interest.

(b) QUALIFIED INCOME OFFSET. If, at the end of any Fiscal Year, the Limited Partner has a negative balance in such Partner's Adjusted Capital Account which exceeds the sum of such Partner's share of Minimum Gain on Nonrecourse Liability and the Partner's share of Minimum Gain on Partner Nonrecourse Debt at the end of the Fiscal Year, then income and gain for the Fiscal Year (and, if necessary, subsequent Fiscal Years) shall be allocated as quickly as possible to such Partner to the extent necessary to reduce the negative balance of such Partner's Adjusted Capital Account to an amount equal to the sum of such Partner's share of Minimum Gain on Nonrecourse Liability and the Partner's share of Minimum Gain on Partner Nonrecourse Debt as of the end of the Fiscal Year; provided that an allocation pursuant to this Section 5.8(b) shall be made only if and to the extent that such Partner would have such a negative balance in the Partner's Adjusted Capital Account in excess of the sum of the Partner's share of Minimum Gain on Nonrecourse Liability and the Partner's share of Minimum Gain on Partner Nonrecourse Debt after all other allocations provided for in this Article 5 have been tentatively made as if this
Section 5.8(b) were not a part of this Agreement. The allocations referred to in this paragraph shall be interpreted and applied to satisfy the requirements of Regulations Section 1.704-1(b)(2)(ii)(d)(3).

(c) MINIMUM GAIN CHARGEBACK - NONRECOURSE LIABILITY. If there is a net decrease in the Minimum Gain on Nonrecourse Liability (as defined in
Section 5.8(g)) during any Fiscal Year, the Partners shall be allocated items of income and gain for the Fiscal Year, before any other allocation of Company items described in Code Section 704(b) is made for the Fiscal Year (and, if necessary subsequent Fiscal Years), in the amounts and in the proportions required by Regulations Sections 1.704-2(f) and 1.704-2(j)(2)(i). The allocations referred to in this paragraph shall be interpreted and applied to satisfy the requirements of Regulations Section 1.704-2(f).

(d) MINIMUM GAIN CHARGEBACK - PARTNER NONRECOURSE DEBT. If there is a decrease in the Minimum Gain on Partner Nonrecourse Debt during a Fiscal Year, then any Partner who has a share of the Minimum Gain on Partner Nonrecourse Debt at the beginning of the Fiscal Year shall be allocated items of income and gain for the Fiscal Year, before any other

allocation of Company items described in Code Section 704(b) is made for the Fiscal Year (and, if necessary, subsequent Fiscal Years), in the amounts and in the proportions required by Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii). The allocations referred to in this paragraph shall be interpreted and applied to satisfy the requirements of Regulations Section 1.704-2(i)(4).

(e) PARTNER NONRECOURSE DEBT DEDUCTIONS. Partner Nonrecourse Deductions with respect to Partner Nonrecourse Debt shall be specially allocated among the Partner or Partners who bear the economic risk of loss with respect to such Partner Nonrecourse Debt in the amounts and in the proportions required by Regulations Section 1.704-2(i)(1). The allocations referred to in this subsection shall be interpreted and applied to satisfy the requirements of Regulations Section 1.704-2(i).

(f) ADJUSTED CAPITAL ACCOUNT. The term "Adjusted Capital Account" shall mean the amount of a Partner's Capital Account (determined before the special allocation to be made pursuant to this subsection, but after making all other adjustments to Capital Account for the Fiscal Year with respect to contributions, allocations and distributions), whether positive or negative, reduced by reasonably expected adjustments described in Regulations Section 1.704-1(b)(2)(ii)(d)(4) and by reasonably expected allocations of loss and deduction described in Regulations Section 1.704-1(b)(2)(ii)(d)(5) and reasonably expected distributions described in Regulations Section 1.704-1(b)(2)(ii)(d)(6), and increased by the amount of the Partner's "risk of loss" (as defined in Regulations Section 1.752-2(b)) with respect to the recourse liabilities of the Company.

(g) MINIMUM GAIN ON NONRECOURSE LIABILITY. The term "Minimum Gain on Nonrecourse Liability" shall mean the aggregate amount of gain, if any, that would be realized by the Company if, in a taxable transaction, it disposed of all Company property subject to Nonrecourse Liabilities of the Company (as defined in Regulations Section 1.704-2(b)(3)) in full satisfaction thereof (and for no other consideration). The Partners intend that Minimum Gain on Nonrecourse Liability shall be determined in accordance with the provisions of Regulations Section 1.704-2(d)(1).

(h) MINIMUM GAIN ON PARTNER NONRECOURSE DEBT. The term "Minimum Gain on Partner Nonrecourse Debt" shall mean the aggregate amount of gain, if any, that would be realized by the Company if, in a taxable transaction, it disposed of all Company property encumbered by Mortgages securing Partner Nonrecourse Debt of the Company (i.e., a nonrecourse debt for which one or more of the Partners bears the economic risk of loss, and defined in Regulations
Section 1.704-2(b)(4)), in full satisfaction thereof (and for no other consideration). The Partners intend that Minimum Gain on Partner Nonrecourse Debt shall be determined in accordance with the provisions of Regulations
Section 1.704-2(i)(3).

(i) LOSS ALLOCATION AMOUNT. The term "Loss Allocation Amount" shall mean (i) in the case of a Partner who has a positive balance in its, his or her Adjusted Capital Account, an amount equal to the sum of (x) the positive balance in the Partner's Adjusted Capital Account, (y) the Partner's share of Minimum Gain on Nonrecourse Liability, and (z) the Partner's share of Minimum Gain on Partner Nonrecourse Debt, or (ii) in the case of a Partner who has a negative balance in its, his or her Adjusted Capital Account which does not exceed the sum of the

Partner's share of Minimum Gain on Nonrecourse Liability and the Partner's share of Minimum Gain on Partner Nonrecourse Debt, an amount equal to the excess of
(x) the sum of the Partner's share of Minimum Gain on Nonrecourse Liability and the Partner's share of Minimum Gain on Partner Nonrecourse Debt, over (y) the balance of the Partner's Adjusted Capital Account (treated as a positive number).

(j) INCOME ALLOCATION AMOUNT. The term "Income Allocation Amount" shall mean, in the case of a Partner who has a negative balance in its, his or her Adjusted Capital Account which exceeds the sum of the Partner's share of Minimum Gain on Nonrecourse Liability and the Partner's share of Minimum Gain on Partner Nonrecourse Debt, an amount equal to such excess.

(k) GROSS INCOME ALLOCATION. Each Partner who has a deficit Capital Account at the end of any Fiscal Year which is in excess of the sum of the Partner's share of Minimum Gain on Nonrecourse Liability and the Partner's share of Minimum Gain on Partner Nonrecourse Debt shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 5.8(k) shall be made only if and to the extent that such Partner would have a deficit Capital Account in excess of such sum after all other allocations provided for in this Article 5 have been made as if Section 5.8(b) and this Section 5.8(k) were not a part of this Agreement.

(m) SECTION 754 ADJUSTMENTS. In any case where an adjustment to the Adjusted Basis of any Company asset pursuant to Sections 734(b) or 743(b) of the Code is required (pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations 1.704-1(b)(2)(iv)(m)(4)), to be taken into account in determining Capital Accounts because of a distribution to a Partner in complete liquidation of the Partner's interest in the Company, the amount of such adjustment to Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such gain or loss shall be specially allocated among the Partners in accordance with their interests in the Company in the event that (i) Regulations
Section 1.704-1(b)(2)(iv)(m)(2) applies, or (ii) the Partners to whom such distribution was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

(n) CURATIVE ALLOCATIONS. The term "Regulatory Allocations" shall mean the allocations set forth in Section 5.8(a) through Section 5.8(e) and
Section 5.8(k) through Section 5.8(m). Offsetting special allocations of Company income, gain, loss or deduction shall be made so that, after such offsetting allocations are made, each Partner's Capital Account is, to the extent possible, equal to the Capital Account such Partner would have had if the Regulatory Allocations were not included in this Agreement. For this purpose, future Regulatory Allocations under Section 5.8(c) and Section 5.8(d) that are likely to offset current Regulatory Allocations under Section 5.8(e) and Section 5.8(l) shall be taken into account.

ARTICLE 6

RIGHTS AND DUTIES OF PARTNERS

otherwise set forth in this Agreement, any approval or consent of the Partners shall require the unanimous consent of the General Partner and the Limited Partner(s).

(a) subject to Section 8.4 and Article 12, selling, leasing or otherwise disposing of, or granting a Mortgage, pledge, encumbrance, lien or security interest in or on, all or any substantial part of any of the Properties and/or assets of the Company, including the granting of options and rights of first refusal;

(b) creating, incurring, assuming, extending, modifying or otherwise becoming liable with respect to any Company Loan (including guarantees of the indebtedness or other obligations of any Person or of any Affiliate of the Company), in any transaction or series of transactions, that result or will result in such obligations or indebtedness being outstanding at any time or causing or permitting any Subsidiary to take any such action;

(c) authorizing or entering into any agreements, commitment or other transaction, or any series of related agreements, commitments or other transactions, requiring payment(s) by the Company or any Subsidiary exceeding $25,000, unless otherwise provided in the applicable Subsidiary Budget;

(d) consummating a Proposed Acquisition or acquiring any real property, whether improved or unimproved or any interest therein, or causing or permitting any Subsidiary to take any such action except pursuant to an approved Subsidiary Budget;

(e) employing or retaining, on behalf of the Company, Persons to operate and manage the business of the Company, including accountants, attorneys and consultants;

(f) amending this Agreement, amending any organic or constituent document or instrument of any Subsidiary or amending in any material respect, or waiving any material rights in, any agreement the entering into of which was a Major Decision;

(g) amending, changing, modifying or supplementing the Acquisition Profile;

(h) subject to clause (c), above, amending, changing, modifying or supplementing any Subsidiary Budget;

(i) assigning any property of the Company or any Subsidiary in trust for creditors;

(j) confessing a judgment against the Company or any Subsidiary or its or their assets, or any portion thereof, except as otherwise provided in the documents evidencing or securing a Company Loan incurred on or before the Effective Date or approved by the Limited Partner;

(k) lending money to, or guaranteeing the debts or other obligations of, a Partner or any other Person, or causing or permitting the Company or any Subsidiary to take any such action;

(l) entering into or amending, a contract between the Company or any Subsidiary, on the one hand, and a Partner, HHMLP, or any Affiliate of a Partner, HHMLP or the Company on the other hand, or paying fees or other compensation to a Partner, HHMLP or an Affiliate of a Partner, HHMLP, or the Company;

(m) entering into any management agreement for any of the Properties;

(n) causing the Company or any Subsidiary to amend, terminate, request or grant, a waiver under, any of the documents relating to a Company Loan;

(o) changing the name of the Company or any Subsidiary;

(p) except as otherwise provided in Article 15, dissolving, liquidating and winding-up the affairs of the Company or any Subsidiary;

(q) merging or consolidating the Company or any Subsidiary with or into any other partnership, limited liability company, corporation or other entity;

(r) commencing, settling or dismissing litigation by or against the Company or any Subsidiary (other than proceedings against a Partner to enforce the Partner's obligations under this Agreement); defending, settling, adjusting, compounding, submitting to arbitration or compromising any actions, suits, accounts, reckonings, claims or demands whatsoever that now are or hereafter shall be pending between the Company and/or any Subsidiary and any Person (other than disputes between or among Partners), at law or in equity;

(s) except as required by law, causing any document to be recorded on behalf of the Company or any Subsidiary in any public record which would adversely affect title to any asset or Property of the Company or any Subsidiary;

(t) paying the principal of any Company Loan at any time prior to its Maturity or refinancing any Company Loan at any time prior to its Maturity; provided, however, that payments of regularly scheduled debt service (including principal amortization) required under the terms of any Company Loan shall not constitute a Major Decision;

(u) making tax elections on behalf of the Company or any Subsidiary pursuant to the Code;

(v) approving any federal or state income tax return for the Company or any Subsidiary or authorizing the filing thereof;

(w) causing the Company or a Subsidiary to engage in any business or activity other than those referred to in Section 3.1;

(x) causing the Company or any Subsidiary to take any of the actions described in Section 10(d); and

(y) entering into any agreement, contract, understanding or other arrangement providing for any of the foregoing transactions or matters.

If there shall at any time be a violation or an attempted violation of any of the provisions of this Section 6.4 and any rights hereby granted, then any Partner shall, in addition to all rights and remedies at law or in equity, be entitled to a decree or order restraining such violation; it being hereby acknowledged and agreed that damages at law will not be an adequate remedy for a breach or violation of the provisions set forth in this Section 6.4 and, with respect to such remedy, no Partner shall be required to post bond in connection with same.

(a) at the time of the execution or delivery of the Document, the Company was in existence and this Agreement was in full force and effect;

(b) the Document was duly approved by the General Partner or the Partners in accordance with this Agreement and is binding upon the Company; and

(c) the General Partner was duly authorized and empowered to execute and deliver the Document for and on behalf of the Company.

(b) Approvals and Implementation of Budget. No Subsidiary Budget may hereafter be changed without the consent of the Limited Partner, except as provided in Section 6.4(c) or to take into account Emergency Costs. The General Partner shall implement, or cause to be implemented, each Subsidiary Budget and shall be authorized, subject to the provisions of Section 6.4, without the need for further approval by the Limited Partner, to make the expenditures and incur the obligations provided for in such Subsidiary Budget. The General Partner shall, in the performance of its duties hereunder, comply with each Subsidiary Budget

and shall not (except to the extent required as a result of violations of law or changes of law) deviate therefrom, incur additional expenses or materially change the manner of operation of the Company or any Subsidiary without the approval of the Limited Partner, except as provided in Section 6.4(c) or to incur Emergency Costs. The General Partner shall use its reasonable best efforts to cause the Properties to be operated and managed for the account of the Subsidiary within the parameters of each Subsidiary Budget. If at any time the General Partner shall, in the performance of its duties hereunder, determine that any Subsidiary Budget is no longer appropriate because of any reason (including, without limitation, the need to incur additional expenses) the General Partner shall promptly submit to the Limited Partner for its consideration a revised Subsidiary Budget (or adjusted forecasts by way of supplement to such Subsidiary Budget) for such Subsidiary. When approved by the Limited Partner, the General Partner shall implement the revised Subsidiary Budget and shall be authorized, without the need for further approval by the Limited Partners, to make the expenditures and incur the obligations provided for in the applicable revised Subsidiary Budget.

ARTICLE 7

BOOKS OF ACCOUNT AND REPORTS; ACCESS TO RECORDS

consolidated monthly financial statements for such calendar month, including a balance sheet, a statement of income and expense and a cash flow statement, (ii) concurrently with the delivery to the holder of a Mortgage encumbering any Property, a copy of all financial statements and other reports delivered by the Company to such holder, and (iii) within ninety (90) days after the end of each Fiscal Year, audited financial statements certified by an independent public accountant, including a balance sheet, a statement of income and expense and a statement of source and application of funds, and the information necessary to enable the Partner to complete such Partner's federal and state income tax returns for such Fiscal Year.

ARTICLE 8

TRANSFERS OF PARTNERSHIP INTERESTS AND ECONOMIC RIGHTS

(a) if the Transfer is prohibited by, or would cause a default under, any Mortgage encumbering the Property, under any loan agreement or guaranty to which the Company or any Subsidiary is a party;

(b) in the case of a Transfer to a Person who is not a Partner or a Permitted Transferee, unless the Company receives an opinion of counsel satisfactory to the other Partners that such Transfer is exempt from the registration requirements of any applicable federal or state securities laws;

(c) in the case of a Transfer to a Person who is not a Partner, unless the Company receives from the Person to whom the Partnership Interest or the Economic Rights are

Transferred, such Person's taxpayer or employer identification number and any other information reasonably requested by the General Partner; and

(d) in the case of a Transfer to a Person who is not a Partner or a Permitted Transferee, unless (i) the Partner or the Assignee desiring to make the Transfer provides to the other Partners a First Offer (as defined in Section 8.3(d)) or obtains a Third Party Offer (as defined in Section 8.3(d)) for the purchase of all (but not less than all) of such Partner's or Assignee's Partnership Interest or Economic Rights, as the case may be, and offers to sell the Partnership Interest or the Economic Rights that are the subject of the First Offer or Third Party Offer to the other Partners pursuant to Section 8.3, and (ii) the other Partners do not exercise the option to purchase such Partnership Interest or the Economic Rights within the time and in the manner required by Section 8.3.

Except as may be agreed to by all Partners, no Transfer shall be permitted which would operate to affect the status of the Company as a limited partnership for state law or federal income tax purposes, or cause a termination of the Company under Section 708 the Code, or applicable successor law, for Federal or state income tax purposes. No Partner shall consent to a Transfer of Partnership Interests in such Partner to the extent that such Transfer would cause a termination of such Partner under Section 708 of the Code. Before any such Transfer is accomplished, the Partner desiring to Transfer its Partnership Interest shall be required, upon request of the Partner not Affiliated with the Partner desiring to Transfer ("NonAffiliated Partner"), to present to the NonAffiliated Partner an opinion of reputable tax counsel, in form and substance acceptable to the NonAffiliated Partner, that the contemplated Transfer will not result in a termination of the Company for federal income tax purposes.

(a) A Transfer of a Partnership Interest by a Partner permitted by
Section 8.2(d) shall not be made without first giving to the other Partners a notice (the "Offering Notice") in which the Partner or the Assignee (hereinafter referred to as the "Offeror") irrevocably offers to sell to the Partner(s) to whom the Offering Notice is given (the "Offeree"), Offeror's entire Partnership Interest or Economic Rights (hereinafter referred to as the "Offered Interest") on the terms and conditions set forth in this Section. The Offering Notice shall be accompanied by a copy of the First Offer (as defined herein) or a true, correct and complete copy of the Third Party Offer (as defined herein). In the case of a Third Party Offer, the giving of an Offering Notice shall constitute a representation and warranty by the Offeror to the Offeree that the Third Party Offer is to the best of the Offeror's knowledge, bona fide in all respects.

(b) For a period of thirty (30) days after receipt of the Offering Notice the Offeree shall have the option to purchase the Offered Interest for the same purchase price and on the same terms set forth in the First Offer or Third Party Offer. The Offeree may exercise its option to purchase the Offered Interest only by giving notice to the Offeror within the thirty (30)-day period.

(c) If, within the thirty (30)-day period referred to in Section 8.3(b), the Offeree does not give notice to the Offeror of the exercise of its option to purchase the entire Offered Interest, the Offeror shall be free to Transfer the Offered Interest to any Person in the

case of a First Offer or to the Person who made the Third Party Offer, in the case of a Third Party Offer, but the Transfer must be consummated within one hundred twenty (120) days after the expiration of the thirty (30)-day period referred to in Section 8.3(b) strictly in accordance with the terms of the First Offer or Third Party Offer (provided, however, that in the case of a First Offer, the Transfer may be for a higher price and/or on less favorable terms to the buyer than the price or the terms specified in the First Offer). If the Transfer of the Offered Interest is not consummated within one hundred twenty
(120) days after the expiration of the thirty (30)-day period referred to in
Section 8.3(b), the Offeror may not thereafter Transfer all or any part of its Partnership Interest to the same Person who made the Third Party Offer or to any other Person without first complying with the provisions of this Section. If a Partner's Partnership Interest is Transferred to a Person who is not a Permitted Transferee, the transferee shall be an Assignee but shall not become a Partner unless admitted as such pursuant to the provisions of Section 9.2.

(d) For purposes of this Section 8.3, the term "First Offer," means a written offer to sell a Partner's entire Partnership Interest for a specified price payable in cash. For the purposes of this Section 8.3, the term "Third Party Offer" shall mean a written offer to purchase a Partner's entire Partnership Interest, as the case may be, open for acceptance for at least thirty (30) days, for a specified price from a financially responsible Person, identified therein by name and address, who is financially capable of complying with the terms of the Third Party Offer and who is unrelated, directly or indirectly, to the Partner or the Assignee, or any Affiliate thereof, and which does not contain terms or conditions which the Offeree, for reasons other than its financial condition, are not reasonably capable of performing, such as payment in a specific form of property (such as corporate stock or a unique or specific item or class of property) not readily available to the Offeree or for which no recognized or adequate public market exists. The Person who makes the Third Party Offer shall be deemed to be "unrelated" only if it is not an Affiliate of the Partner or the Assignee and there is no arrangement of any kind whereby the Partner or the Assignee, directly or indirectly, will be financially interested in the ownership of the Property, or any interest therein, after the sale of the Partnership Interests. If the Person making the Third Party Offer is a corporation, limited liability company partnership, or other entity, all shareholders, members or partners owning more than ten percent (10%) of its stock, membership interests partnership interests or other equity interests shall be identified.

ARTICLE 9

ADMISSION OF ASSIGNEES

ARTICLE 10

DEFAULT AND REMEDIES

(a) a default by a Partner

either (i) within the meaning of Section 4.3(b), in paying the Partner's share of an Additional Capital Contribution to the Company on the Due Date or (ii) in the case of the General Partner, within the meaning of
Section 5.1(a)(ii), in returning to the holders of the Limited Partner Units any excess amounts distributed to the General Partner as part of the Administration Fee or General Partner Preferred Distribution within the fifteen (15) day period provided therein, which in any event described in the foregoing clause (i) or (ii) continues for more than ten (10) days after the Nondefaulting Partner gives a written notice to the Defaulting Partner, specifying the default.

(b) a default by a Partner in performing or observing any of the provisions of this Agreement (other than those referred to in subsection (d) below, which events will not be remediable) which is not remedied by the Partner
(i) within fifteen (15) days after the

Nondefaulting Partner gives a written notice to the Defaulting Partner, specifying the default, or (ii) in the case of a default which cannot in good faith be cured within fifteen (15) days, within such additional period, if any, as may be reasonably required by the Defaulting Partner to cure the default in good faith provided that the Defaulting Partner commences the curing of the same within the fifteen (15)-day period (it being intended that, in connection with any default which is not susceptible of being cured in good faith within fifteen
(15) days, the time within which the Defaulting Partner is required to cure the default shall be extended for such additional period as may be reasonably necessary to cure the default in good faith but in no event shall such additional period exceed 45 days);

(c) Transfer by a Partner of the Partner's Partnership Interest in a manner not permitted by Article 8;

(d) the taking of any of the following actions by a Partner (with respect to such Partner) pursuant to or within the meaning of Title 11, Federal Bankruptcy Code (11 U.S.C.A.) or any similar federal or state law for the relief of debtors ("Bankruptcy Law"):

(i) commencing a voluntary case;

(ii) consenting to the entry of an order for relief against the Partner in an involuntary case;

(iii) consenting to the appointment of a receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law (a "Custodian") of the Partner or for all or substantially all of the Partner's property;

(iv) making a general assignment for the benefit of the Partner's creditors; or

(v) the entry by a court of competent jurisdiction of an order or decree under any Bankruptcy Law that:

(A) is for relief against a Partner in an involuntary case, which order or decree remains unstayed and in effect for 90 days,

(B) appoints a Custodian of the Partner for all or substantially all of its property, which order or decree remains unstayed and in effect for 90 days,

(C) orders the liquidation of the Partner, which order or decree remains unstayed and in effect for 90 days,

(e) HT's failure to maintain its treatment as a Real Estate Investment Trust pursuant to the Code;

(f) any uncured breach by HT under that certain Registration Rights Agreement by and between HT and the Limited Partner dated as of April 21, 2003;

(g) any uncured breach by a party other than the Limited Partner under the Securities Purchase Agreement;

(h) any uncured breach by a party other than the Limited Partner under that Second Amendment to the Agreement of Limited Partnership of HLP by and between HT, the Limited Partner, and others dated as of April 21, 2003 (the "Second Amendment")

(i) any uncured breach by HT under that certain Excepted Holders Agreement by and between HT and the Limited Partner dated as of April 21, 2003;

(j) any uncured breach by HT under that certain Standstill Agreement by and between HT and the Limited Partner dated as of April 21, 2003;

(k) the failure of HT or HLP, to pay distributions or dividends (as the case may be) on "Series A Preferred Units" (pursuant to, and as such term is defined in, the Second Amendment) and/ or the underlying Series A Preferred Stock issued pursuant to the Securities Purchase Agreement.

If an Event of Default occurs, the Nondefaulting Partner shall have the remedies set forth in Section 10.2.

(a) PERCENTAGE INTEREST ADJUSTMENT. If an Event of Default defined in Section 10.1(a)(i) occurs, any Nondefaulting Partner shall have the option, but without imposing on it the obligation, to contribute that portion of the Additional Capital Contribution which the Defaulting Partner was obligated, but failed, to contribute (and if more than one Nondefaulting Partner exercises such option, or any other right or option under this Article 10, such option or right shall be exercised by each Nondefaulting Partner, pro rata, in accordance with their respective Percentage Interests, or in such other manner as they may determine, and the term "Nondefaulting Partner" as used in this Article 10 shall mean the aggregate of such Nondefaulting Partners who exercise such right or option). The option shall be exercised by giving written notice to the Defaulting Partner within sixty (60) days after the occurrence of the Event of Default. If any portion of the Defaulting Partner's share of such Additional Capital Contribution is not so contributed by the Nondefaulting Partner, the Nondefaulting Partner shall have the authority to admit one or more new Persons as limited partners (subject to the provisions of Section 8.2(a) through Section 8.2(c), who shall purchase a Partnership Interest determined in accordance with Sections 10.2(a)(i) and 10.2(a)(iii) below by making a Capital Contribution to the Company in immediately available funds. If the Nondefaulting Partner(s) and/or the new Partner contribute the Defaulting Partner's share of such Capital Contribution (as well as the Nondefaulting Partner's own share), the Percentage Interest of the Defaulting Partner and the Nondefaulting Partner shall be adjusted as follows:

(i) In the case of an Event of Default as described in
Section 10.1(a)(i) (a default by a Partner in paying the Partner's proportionate share of an Additional Capital Contribution), the Percentage Interest of the Defaulting Partner shall be reduced to a percentage equal to ninety-five percent (95%) of a fraction, the numerator of which is the sum of the Defaulting Partner's Unreturned Capital Contributions as of the date on

which the Event of Default occurs and the denominator of which is the sum of the aggregate of all Unreturned Capital Contributions of all Partners as of such date;

(ii) The Percentage Interest of each of the Nondefaulting Partners who contribute all or a portion of the Defaulting Partner's share, or of a new partner who contributes all or a portion of such share, shall be increased or established, as the case may be, by multiplying the reduction in the Defaulting Partner's Percentage Interest by a fraction, the numerator of which is the amount of the Defaulting Partner's share which the Nondefaulting Partner or the new Partner contributed and the denominator of which is the amount of such share contributed by all of the Nondefaulting Partner(s) and the new partner;

(iii) A Partner who is a Defaulting Partner shall continue to be obligated to make Additional Capital Contributions pursuant to Section 4.3.

(b) COMPELLED LIQUIDATION. If any Event of Default occurs, the Nondefaulting Partner shall have the option, but not the obligation, at any time during the sixty (60) day period after the Event of Default occurs, to compel the General Partner to cause the Subsidiaries to sell all the Properties then owned by the Subsidiaries in the manner set forth in Article 12, without the need of satisfying the conditions set forth in Section 12.8 hereof, it being expressly agreed to that such conditions shall not apply in the case of a sale upon an Event of Default.

(c) PURCHASE OPTION. If any Event of Default occurs (other than those set forth in Section 10.1(f), (g), (h), (i), or (j)), the Nondefaulting Partner shall have the absolute right and option to purchase all (but not less than all) of the Defaulting Partner's Partnership Interest for a price equal to 85% of the sum of the Defaulting Partner's Unreturned Capital Contributions as of the last day of the calendar month immediately preceding the exercise of such option. The option may be exercised by the Nondefaulting Partner at any time during the sixty (60) day period after the date on which the Event of Default occurs (unless the default is cured before the exercise of the option) by written notice to the Defaulting Partner. The Defaulting Partner's right to cure the default shall terminate on the date the Nondefaulting Partner gives notice of exercise of the option. The closing of the purchase and sale shall be held within 30 days after the date on which the option is exercised at the Company's principal office, time being of the essence. The terms of payment shall be as follows: An amount equal to 10% of the purchase price shall be paid by the Nondefaulting Partner to the Defaulting Partner at the closing and the balance of the purchase price shall be evidenced by a promissory note issued by the Nondefaulting Partner to the Defaulting Partners payable on the third anniversary of the date of closing, with interest, payable annually, on the unpaid principal balance at the applicable Federal rate (as defined in Section 1274(d) of the Code) in effect on the date of the notice of exercise of the option. At the closing, the Defaulting Partner shall execute and deliver such instruments of assignment of the Defaulting Partner's Partnership Interest as the Nondefaulting Partner shall reasonably request.

ARTICLE 11

BUY-SELL

(b) In the event of a disagreement as to fair market value, fair market value shall be determined by appraisal in the following manner: (i) all appraisers shall be members of the Appraisal Institute or any organization successor thereto; (ii) the Buy/Sell Initiating Partner shall promptly appoint an appraiser and give notice of the appointment to the Recipient Partner; (iii) within fifteen (15) days after receipt of the Buy/Sell Initiating Partner's notice, the Recipient Partner shall appoint a second appraiser, and give notice of the appointment to the Buy/Sell Initiating Partner; (iv) each appraiser shall make an independent written appraisal, and (v) if the Recipient Partner fails to appoint a second appraiser within (15) days after receipt of the Buy/Sell Initiating Partner's notice of the appointment of the first appraiser, the first appraiser shall proceed to make his/her appraisal of each Partners' Partnership Interests and the fair market value of each Partners' Partnership Interests shall be the amount determined by the first appraiser. If the two (2) appraisers so appointed agree on the fair market value of each Partners' Partnership Interests, the fair market value of each Partner's Partnership Interests shall be the amount determined by them. If the two (2) appraisers so appointed do not agree on the

fair market value and the difference between the two appraisals is not more than ten percent (10%) of the lower of the two (2) appraisals, the fair market value of each Partner's Partnership Interests shall be an amount equal to the quotient obtained by dividing the sum of the fair market values determined by each appraiser, by two (2). If the two (2) appraisers so appointed do not agree on the fair market value of each Partner's Partnership Interests, and the difference between the two appraisals is more than ten percent (10%) of the lower of the two appraisals, the two appraisers shall jointly appoint a third appraiser. If the appraisers so appointed shall be unable, within forty-five
(45) days after the appointment of the second appraiser, either to agree on the fair market value of each Partner's Partnership Interests (or to disagree on such value with a difference of ten (10%) percent or less), or to agree on the appointment of a third appraiser, they shall give written notice of such failure to agree to the Buy/Sell Initiating Partner and the Recipient Partner, and, if such Partners fail to agree upon the selection of a third appraiser within fifteen (15) days after the appraisers appointed by the Partners give such notice, then within twenty (20) days thereafter either Partner upon written notice to the other Partner may request such appointment by the then President of the Appraisal Institute (or any organization successor thereto), or in his/her failure to act, may apply for such appointment to the United States District Court for the Southern District of New York. If a third appraiser is appointed, he/she shall make his/her determination within thirty (30) days after his/her appointment and the fair market value of each Partner's Partnership Interests shall be the fair market value of each Partner's Partnership Interests determined by whichever of the first two appraisers is (in the opinion of the third appraiser) closest in amount to the fair market value of each Partner's Partnership Interests as determined by the third appraiser. The third appraiser shall not make an independent appraisal of each Partner's Partnership Interests, but the third appraiser's function shall be solely to determine which of the appraisals made by the first two appraisers most closely represents such fair market value. Each appraiser appointed pursuant to this Section shall be a disinterested person of recognized competence who has had a minimum of ten (10) years experience in appraising commercial real estate in the states in which the Company's properties are located. Each appraiser shall determine the fair market value of each Partner's Partnership Interests, on the basis of all relevant factors affecting fair market value. The party appointing each appraiser shall be obligated, promptly after receipt of the valuation report prepared by the appraiser appointed by such party, to deliver a copy of such valuation report to the other party in the manner provided elsewhere in this Agreement for the giving of notices. If a third appraiser is appointed, the third appraiser shall be directed, at the time of his or her appointment, to deliver copies of his or her valuation report, promptly after its completion, to all parties in the manner provided elsewhere in this Agreement for the giving of notices.

The cost and expense of the appraisers and the appraisal process hereunder shall be borne equally by the Buy / Sell Initiating Partner and the Recipient Partner, provided, however, that if the fair market value determined pursuant to this Section 11.1(b) does not exceed the Designated Price originally offered by the Buy / Sell Initiating Partner under Section 11.1(a) hereof by more than 10% of such Designated Price, all costs and expenses of the appraisers and the appraisal process hereunder shall be borne entirely by the Recipient Partner.

(a) Within forty-five (45) days after receipt of written notice of the Offer (the "Response Period"), the Recipient Partner shall reply to the Buy/Sell Initiating Partner by giving

written notice as to whether such Recipient Partner desires to buy or sell in accordance with the Offer. The decision of the Recipient Partner shall bind all Permitted Transferees of such Recipient Partner. In the event the Recipient Partner elects to purchase the Partnership Interest of the Buy/Sell Initiating Partner, the election of the Recipient Partner to do so shall be accompanied by evidence of a cash deposit into the escrow account of counsel to the Recipient Partner in an amount equal to ten percent (10%) of the purchase price to be paid to the Buy/Sell Initiating Partner and the deposit of the Buy/Sell Initiating Partner shall be released.

(b) If a responsive notice is not given by a Recipient Partner to an Offer before expiration of the Response Period, then such non-responding Recipient Partner shall be deemed to have elected to sell its Partnership Interest (and the Partnership Interest of its Permitted Transferees) to the Buy/Sell Initiating Partner at such price and upon such terms as set forth in the Offer.

(a) canceling the buy-sell contract in which event (A) all of the terms and provisions of this Agreement, including this Section 11.1 shall remain in full force and effect, and (B) the Nondefaulting Partner shall be entitled to retain the deposit made by the defaulting Partner;

(b) purchasing the entire Partnership Interest of the other Partner in accordance with the terms of the Offer, in the case where the other Partner defaulted on its obligation to buy, or selling to the other Partner in accordance with the terms of the Offer, in the case where the other Partner defaulted on its obligation to sell; or

(c) seeking specific performance of the other Partner's obligation, without waiver of damages as a result thereof.

ARTICLE 12

SALE OF PROPERTY

(a) a proposed offer (the "Proposed Offer") containing (i) the minimum purchase price (the "Minimum Price") for the Property (grossed up to include the unpaid

principal balance of all Mortgages encumbering the Property, and the unpaid principal balance of all other indebtedness of the Company and the applicable Subsidiary for borrowed money attributable to such Property) which the Compelled Sale Initiating Partner would be willing to cause the Company and applicable Subsidiary to accept in connection with a sale of the Property to an unrelated third party for cash (within the meaning of Section 12.6), either free and clear of, or subject to, Mortgages and easements, covenants, conditions and other matters affecting title and all leases with tenants and (ii) any and all other terms and conditions of such proposed Transfer (the "Terms"); or

(b) a Third Party Offer (as defined in Section 12.5) of a Purchaser (as defined in Section 12.5) providing for the purchase of the Property for cash (within the meaning of Section 12.6), either free and clear of, or subject to, Mortgages and easements, covenants, conditions and other matters affecting title and all leases with tenants.

The delivery of a Third Party Offer by the Compelled Sale Initiating Partner shall constitute a representation and warranty to the best of the Compelled Sale Initiating Partner's knowledge to the Compelled Sale Responding Partner that the Third Party Offer is bona fide in all respects.

(a) If the Compelled Sale Responding Partner does not exercise the option to purchase the Property within forty-five (45) days after receipt of the Proposed Offer or the Third Party Offer, as the case may be, or if the Compelled Sale Responding Partner timely exercises the option but the Purchaser thereafter defaults in consummating the purchase of the Property, the Compelled Sale Initiating Partner shall have the right at any time within the nine (9) month period beginning on the date of expiration of the option (or the date of the Purchaser's default, if applicable), without the necessity of obtaining the consent or approval of the Compelled Sale Responding Partner (or any other Partner) or compliance with the 3 year condition set forth in section 12.8, to cause the applicable Subsidiary to sell the Property for a purchase price payable in cash (within the meaning of Section 12.6) equal to or greater than the Minimum Price or the purchase price of the Property payable under the Third Party Offer, as the case may be (or, if the Compelled Sale Responding Partner exercises the option but the Purchaser thereafter defaults in purchasing the Property, for a purchase price payable in cash equal to or greater than ninety percent (90%) of the Minimum Price or ninety percent (90%) of the purchase price of the Property payable under the Third Party Offer, as the case may be). If the Compelled Sale Initiating Partner fails, within the nine (9)-month period, to cause the Company to consummate a

sale of the Property which complies with this Section, the provisions of this
Section shall apply with respect to any future desire on the part of the Compelled Sale Initiating Partner to cause the Company to sell the Property. Any sale of the Property in connection with, or as a result of, a Proposed Offer shall be in accordance with the Terms or terms that are less favorable to the buyer than the Terms.

(b) Distributions of Capital Proceeds shall be made to the Partners as follows:

(i) to the holders of Limited Partner Units in an amount equal to their Unreturned Capital Contributions;

(ii) then to the holders of General Partner Units in an amount equal to their Unreturned Capital Contributions;

(iii) then to the holders of Limited Partner Units, until the unpaid Limited Partner Preferred Distributions that are payable to the holders of the Limited Partner Units have been paid in full;

(iv) then to the holders of General Partner Units, until the unpaid Administration Fees and General Partner Preferred Distributions that are payable to the holders of the General Partner Units and the General Partner have been paid in full; and

(v) thereafter, the balance, if any, to the Partners in proportion to their Percentage Interests.

(c) Notwithstanding Section 12.3(b), to the extent that taxable income from a Capital Transaction is allocated to a Partner that has HT as one of its partners , such Partner shall receive a Distribution of Capital Proceeds equal to (i) 40% of the income from the Capital Transaction allocated through the Partner to HT that is characterized as ordinary income and (ii) 40% of the income from the Capital Transaction allocated through the Partner to HT that is characterized as capital gain; provided however, such amount shall be proportionately reduced to the extent a distribution to CHP is not simultaneously made in an amount at least equal to 40% of the taxable income from a Capital Transaction allocated through CHP to CNL Hospitality Properties, Inc., a Maryland corporation. Amounts otherwise distributable to the Partners pursuant to Sections 5.1, 12.3(b) and 15.3 shall be reduced by all distributions to such Partners pursuant to this Section 12.3(c).

if it is in default under this Agreement. If, after the Compelled Sale Responding Partner elects to purchase a Property pursuant to Section 12.2, the Compelled Sale Responding Partner defaults in making the purchase, the Compelled Sale Responding Partner shall not be permitted to deliver a Proposed Offer or a Third Party Offer to the Compelled Sale Initiating Partner for a period of 12 months following the date of the default.

ARTICLE 13

SPECIAL RIGHTS OF LIMITED PARTNER UNITS

(a) If delivery to or ownership of OP Partnership Units by a holder of Limited Partner Units (regardless of whether or not such holder of Limited Partner Units has, in fact, exercised its Exchange Rights, and taking into account deemed ownership determined after applying the provisions of
Section 318 of the Code as modified by the provisions of Section 856(d)(5) of the Code), would result in:

(i) such holder of Limited Partner Units or any other person owning or being deemed to own, directly or indirectly (determined after applying the provisions of Section 318 of the Code, as modified, by the provisions of Section 856(d)(5) of the Code), units representing an interest in 25% or more of the capital, profits or net assets of HLP, and

(ii) (A) cause HT to own or be deemed to own, directly or indirectly (determined after applying the provisions of Section 318 of the Code, as modified, by the provisions of Section 856(d)(5) of the Code), 10% or more of the ownership interests in a tenant of HT, HLP, or any other entity in which either HT or HLP has an equity interest, excluding, for this purpose, an entity which qualifies as a taxable REIT subsidiary of HT (within the meaning of Section 856(l) of the Code) ( a "TRS"), or

(B) (1) cause persons owning, or being deemed to own, directly or indirectly (determined after applying the provisions of Section 318 of the Code, as modified, by the provisions of Section 856(d)(5) of the Code), 35% or more of the voting stock or value of the shares of HT to be deemed to own, directly or indirectly (determined after applying the provisions of Section 318 of the Code, as modified, by the provisions of Section 856(d)(5) of the Code), 35% or more of (x) the voting stock or total number of shares of a corporate independent contractor providing services to a tenant of HT, HLP, or any other entity in which either HT or

HLP has an equity interest or (y) the net assets or profits of a non-corporate independent contractor providing services to a tenant of HT, HLP, or any other entity in which either HT or HLP has an equity interest, each within the meaning of Section 856(d)(3) of the Code (an "Independent Contractor"), or

(2) cause an Independent Contractor to own or be deemed to own, directly or indirectly (determined after applying the provisions of Section 318 of the Code, as modified, by the provisions of Section 856(d)(5) of the Code), 35% or more of the voting stock or value of the shares of HT,

then the Exchange Right shall be exercisable, at the sole discretion of such holder of Limited Partner Units, into a right to receive or acquire, as applicable, in lieu of that number of OP Partnership Units to the extent necessary to prevent the situation described in (i) and (ii) above, either,

(x) Class A Common Shares, as described in Section 13.1(a), or

(y) a note issued by the Company (and secured by a priority lien on all of the Company's assets, to the extent not prohibited by any agreement to which the Company is a party or by which the Properties are bound, and if not permitted, then a lien on all of the Company's assets, subordinate only to such liens as then exist on the Company's assets that do not permit a priority lien) in redemption of such holder's tendered Limited Partner Units with a principal amount equal to the amount such holder of Limited Partner units would receive in the event the Company were to sell all its assets and, after paying all of its debts and liabilities as required pursuant to the terms hereof (the "Redemption Amount"), distributed the net proceeds of such sale to the Partners pursuant to the provisions of Section 12.3(b) hereof, payable in accordance with Section 13.3 hereof, and shall accrue interest at a rate of 10.5% per annum, or

(z) all of the General Partner's Partnership Interest, for a note payable to the General Partner by the Limited Partner with a principal amount equal to the amount the General Partner would receive with respect to such transferred interest in the event the Company were to sell all of its assets and, after paying all of its debts and liabilities as required pursuant to the terms thereof and distributed the net proceeds of such sale to the Partners pursuant to the provisions of Section 12.3(b) hereof, payable in accordance with Section 13.3 hereof, and shall accrue interest at a rate of 10.5% per annum (the consideration described in (y) and (z) above, hereinafter referred to as the "Redemption Consideration"). The Exchange Rights will terminate upon exercise of the Limited Partner of its rights under this paragraph.

(b) Notwithstanding the provisions of Section 13.0(a) above, if delivery to or ownership of Class A Common Shares by such holder of Limited Partner Units (whether or not such holder of Limited Partner Units has, in fact, exercised its Exchange Rights, and taking into

account deemed ownership determined after applying the provisions of Section 318 of the Code as modified by the provisions of Section 856(d)(5) of the Code), would result in such holder of Limited Partner Units or any other person owning or being deemed to own, directly or indirectly (determined after applying the provisions of Section 318 of the Code as modified by the provisions of Section 856(d)(5) of the Code) shares of HT in excess of:

(i) the "Excepted Holder Limit" (as set forth in that certain Excepted Holder Agreement by and between CNL Hospitality Partners, L.P. and HT, dated as of April 21, 2003); or

(ii) the "Ownership Limit" (as set forth in the Declaration of Trust of HT, as amended, and calculated in accordance therewith, except as otherwise provided in the Declaration of Trust of HT, as amended, but without regard to the Excepted Holder Agreement), which ownership would cause (A) HT to satisfy the provisions of paragraph (a)(ii)(A) above of this Section 13.0, or (B) one or more persons to satisfy the provisions of paragraph (a)(ii)(B) above of this Section 13.0,

then the Exchange Right shall, subject to the provisions of the next sentence, be exercisable, at the sole discretion of such holder of Limited Partner Units, in lieu of that number of Class A Common Shares necessary to prevent the situation described in (i) and (ii) above solely into the right to receive the Redemption Consideration. If the Limited Partner exercises its Exchange Rights pursuant to Sections 13.1(a) or 13.1(b) hereof and the amount of Limited Partner Units that cannot be exchanged for Class A Shares and/or OP Units pursuant to Sections 13.0(a) and 13.0(b) hereof, as applicable, represents a Partnership Interest of less than 5%, then with respect to such Partnership Units, the Limited Partner may only elect that Redemption Consideration set forth in
Section 13.0 (a)(y) and not that Redemption Consideration set forth in 13.0(a)(z).

(c) Redemption Consideration described herein shall be delivered in the manner set forth in Sections 13.2, 13.3 and 13.4 hereof.

(i) Subject to and in compliance with the provisions of this Section, the holder of Limited Partner Units may, at the option of such holder, exchange at any time all but not less than all (except as set forth in Section 13.0 or unless the General Partner consents to "less than all") of such holder's Limited Partner Units into fully paid and nonassessable shares of Class A Common Shares. The number of shares of Class A Common Shares to which a holder of Limited Partner Units shall be entitled to receive upon exchange shall be the number obtained by dividing the (x) Exchange Amount (calculated in accordance with Section 13.1(c) below), by (y) the Share Exchange Price (as defined in
Section 13.1(a)(ii) below).

(ii) The price at which Limited Partner Units will be exchanged for Class A Common Shares shall be equal to $6.7555 (as adjusted as hereinafter provided, the "Share Exchange Price"). All references to the Share Exchange Price herein shall mean the Share Exchange Price as so adjusted.

(i) Subject to and in compliance with the provisions of this Section, the holder of Limited Partner Units may, at the option of such holder, exchange at any time all but not less than all (unless the General Partner consents to "less than all") of such holder's Limited Partner Units into OP Partnership Units. The number of OP Partnership Units which a holder of Limited Partner Units shall be entitled to receive upon exchange shall be the number obtained by dividing the (x) Exchange Amount (calculated in accordance with
Section 13.1(c) below), by (y) the OP Partnership Unit Exchange Price (as defined in Section 13.1(b)(ii) below).

(ii) The price at which OP Partnership Units will be exchanged for Limited Partner Units shall be equal to $6.7555 (as adjusted as hereinafter provided, the "OP Partnership Unit Exchange Price"). All references to the OP Partnership Unit Exchange Price herein shall mean the OP Partnership Unit Exchange Price as so adjusted.

(c) The Exchange Amount for Limited Partner Units to be exchanged pursuant to this Article 13 shall be equal to all Capital Contributions made with respect to such Limited Partner Units, less the Allocable Return of Capital (as defined hereinafter) with respect to such Limited Partner Units. For the purposes of this Article 13, the "Allocable Return of Capital" shall mean the sum of all prior distributions of Capital Proceeds pursuant to Section 12.3(b)(i) hereof with respect to such Limited Partner Units and all liquidating distributions pursuant to Section 15.3(c) hereof with respect to such Limited Partner Units, in an aggregate amount not to exceed the Property Acquisition Contributions made with respect to such Limited Partner Units relating to Properties that have been sold prior to the date of such exchange.

(d) The Exchange Rights in this Section 13.1 shall be exercised by the holder of Limited Partner Units by giving written notice that such holder elects to exchange all of its Limited Partner Units into Class A Common Shares or OP Partnership Units, and by delivery of an executed form of assignment in form and substance reasonably satisfactory to the General Partner, for such Limited Partner Units to be so exchanged to HT at its principal office (or such other office or agency of HT as HT may designate by notice in writing to the holder or holders of the Limited Partner Units) at any time during its usual business hours on the date set forth in such notice, together with a statement of the name or names (with addresses), subject to compliance with applicable laws, Article VII of that certain Declaration of Trust of HT, as amended, and HLP's Amended and Restated Agreement of Limited Partnership, as the case may be, to the extent such designation shall involve a transfer, in which the certificate or certificates for shares of Class A Common Shares or OP Partnership Units shall be issued. Promptly after the receipt by HT of the written notice referred to in this Section 13.1(d) and surrender of the certificate or certificates for the Limited Partner Units to be converted, HT shall cause to be issued and delivered, to the holder, within five (5) Business Days, registered in such name or names as such holder may direct, subject to compliance with applicable laws and Article VII of that certain Declaration of Trust of HT, as amended, and HLP's Amended and Restated Agreement of Limited Partnership, as the case may be, to the extent such designation shall involve a transfer, a certificate or certificates for the number of whole shares or units of Class A Common Shares or OP Partnership Units, issuable upon the exchange of such Limited Partner Units. To the extent permitted by law, such exchange shall be deemed to have been effected as of the close of business on the date on which such written notice shall have been received by HT

and at such time the rights of the holder of such Limited Partner Units shall cease, and the person or persons in whose name or names any certificate or certificates for Class A Common Shares or OP Partnership Units shall be issuable upon such exchange shall be deemed to have become the holder or holders of record of the shares or units represented thereby.

(b) If HT or HLP, as the case shall be, shall, at any time or from time to time after April 21, 2003, effect a subdivision of the outstanding Class A Common Shares or OP Partnership Units without the Company effecting a corresponding subdivision of the Limited Partner Units, the Share Exchange Price or OP Partnership Unit Exchange Price, as applicable, in effect immediately before that subdivision shall be proportionately decreased. Conversely, if HT or HLP, as the case shall be, shall, at any time or from time to time after April 21, 2003, combine the outstanding Class A Common Shares or OP Partnership Units into a smaller number of shares or units, without the Company effecting a corresponding combination of the Limited Partner Units, the Share Exchange Price or OP Partnership Unit Exchange Price, as applicable, in effect immediately before the combination shall be proportionately increased. Any adjustment under this Section 13.1(e) shall become effective at the close of business on the date the subdivision or combination becomes effective.

(c) If, at any time or from time to time after April 21, 2003, the Class A Common Shares or OP Partnership Units issuable upon the exchange of the Limited Partner Units are changed into the same or a different number of shares or units of any class or classes of shares or units, as the case may be, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares or units or share dividend or distribution or a reorganization, merger, consolidation or sale of assets provided for elsewhere in this Article 13), each holder of Limited Partner Units shall have the right thereafter to exchange such units into the kind and amount of shares or units and other securities and property receivable upon such recapitalization, reclassification or other change by holders of the maximum number of Class A Common Shares or OP Partnership Units into which such Limited Partner Units could have been exchanged immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof.

(d) If, at any time or from time to time after April 21, 2003 there is a capital reorganization, merger, consolidation or sale of all or substantially all of the assets of HT or HLP, affecting the Class A Common Shares or OP Partnership Units (other than a recapitalization, subdivision, combination, reclassification, exchange or substitution of shares or units provided for elsewhere in this Article 13), as a part of such capital reorganization, provision shall be made so that the holders of the Limited Partner Units shall thereafter be entitled to receive upon exchange of the Limited Partner Units the number of shares of stock, units or other securities or property to which a holder of the number of Class A Common Shares or OP Partnership Units deliverable upon exchange would have been entitled on such transaction, subject to further adjustment as provided herein or with respect to such other shares, units or other securities by the terms thereof. In any such case, appropriate adjustment shall be made in the application of the provisions of this Article 13 with respect to the rights of the holders of Limited Partner Units after such transaction such that the provisions of this Section 13.1(g) (including adjustment of the Share Exchange Price or OP Partnership Unit Exchange Price, as the case may be, then in effect and the number of shares or units issuable upon exchange of the

Limited Partner Units) shall be applicable after that event and be as nearly equivalent as practicable.

(e) (i) If, at any time or from time to time after April 21, 2003, HT issues or sells, or is "deemed" by the express provisions of this Section 13.1(h)(i) to have issued or sold, Additional HT Common Shares (as defined in
Section 13.1(h)(iv) below), other than (A) as a dividend or other distribution on any class of shares, (B) pursuant to a subdivision or combination of HT Common Shares as provided in Section 13.1(f) above, (C) pursuant to any employee benefit plan approved by HT's Board of Trustees which plan shall issue, in the aggregate, no more than 650,000 HT Common Shares (D) pursuant to a plan providing for the issuance of additional HT Common Shares upon reinvestment of dividends and additional optional amounts under such plan where the dividends are reinvested at an amount per share of HT Common Share issued thereunder that is equal to or greater than 95% of the fair market value of such HT Common Share or (E) upon exchange of partnership interests in HLP pursuant to and in accordance with Section 8.05 of the HLP Amended and Restated Agreement of Limited Partnership, for an Effective Price (as defined in Section 13.1(h)(iv) below) less than eighty-five percent (85%) of the then effective Share Exchange Price, then and in each such case, the then existing Share Exchange Price shall be reduced, as of the opening of business on the date of such issue or sale, to a price determined by multiplying the Share Exchange Price by a fraction (i) the numerator of which shall be (A) the number of HT Common Shares deemed outstanding (as defined in the next sentence) immediately prior to such issue or sale, plus (B) the number of HT Common Shares which the aggregate consideration received (as defined in Section 13.1(h)(ii)) by HT for the total number of Additional HT Common Shares so issued would purchase at such Share Exchange Price, and (ii) the denominator of which shall be the number of HT Common Shares deemed outstanding (as defined below) immediately prior to such issue or sale plus the total number of Additional HT Common Shares actually issued. As used herein, the number of HT Common Shares "deemed" to be outstanding as of a given date shall be the sum of (A) the number of HT Common Shares actually outstanding, (B) the number of HT Common Shares into which the then outstanding Limited Partner Units could be exchanged on the day immediately preceding the given date, and (C) the number of HT Common Shares which could be obtained through the exercise or conversion of all other rights, options and convertible securities outstanding on the day immediately preceding the given date as set forth in Section 13.1(h)(ii) below.

(ii) For the purpose of making any adjustment required under this Article 13, the consideration received by HT for any issue or sale of securities shall (A) to the extent it consists of cash, be computed at the net amount of cash received by HT after deduction of any underwriting or similar discount commission, compensation or concessions paid or allowed by HT in connection with such issue or sale but without deduction of any expenses payable by HT, (B) to the extent it consists of property other than cash, be computed at the fair value of that property as determined in good faith by HT's Board of Trustees, and (C) if Additional HT Common Shares, Convertible Securities (as defined in Section 13.1(h)(iii)) or rights or options to purchase either Additional HT Common Shares or Convertible Securities are issued or sold together with other stock or securities or other assets of HT for a consideration which covers both, be computed as the portion of the consideration so received that may be reasonably

determined in good faith by HT's Board of Trustees to be allocable to such Additional HT Common Shares, Convertible Securities or rights or options.

(iii) For the purpose of the adjustment required under this
Section 13.1(h), if HT issues or sells (i) stock or other securities convertible into Additional HT Common Shares (such convertible stock or securities being herein referred to as "Convertible Securities") or (ii) rights or options for the purchase of Additional HT Common Shares or Convertible Securities, and if the Effective Price of such Additional HT Common Shares is less than eighty-five percent (85%) of the then effective Share Exchange Price, then in each such case, HT shall be deemed to have issued at the time of the issuance of such rights or options or Convertible Securities the maximum number of Additional HT Common Shares issuable upon exercise or conversion thereof and to have received as consideration for the issuance of such shares an amount equal to the total amount of the consideration, if any, received by HT for the issuance of such rights or options or Convertible Securities, plus, in the case of such rights or options, the minimum amounts of consideration, if any, payable to HT upon the exercise of such rights or options, plus, in the case of Convertible Securities, the minimum amount of consideration, if any, payable to HT (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) upon the conversion thereof;

provided that if in the case of Convertible Securities the minimum amount of such consideration cannot be ascertained, but is a function of antidilution or similar protective clauses, HT shall be deemed to have received the minimum amounts of consideration without reference to such clauses;

provided further that if the minimum amount of consideration payable to HT upon the exercise or conversion of rights, options or Convertible Securities is reduced over time or on the occurrence or non-occurrence of specified events other than by reason of antidilution adjustments, the Effective Price shall be recalculated using the figure to which such minimum amount of consideration is reduced; and

provided further that if the minimum amount of consideration payable to HT upon the exercise or conversion of such rights, options or Convertible Securities is subsequently increased, the Effective Price shall be again recalculated using the increased minimum amount of consideration payable to HT upon the exercise or conversion of such rights, options or Convertible Securities. No further adjustment of the Share Exchange Price, as adjusted upon the issuance of such rights, options or Convertible Securities, shall be made as a result of the actual issuance of Additional HT Common Shares on the exercise of any such rights or options or the conversion of any such Convertible Securities. If any such rights or options or the conversion privilege represented by any such Convertible Securities shall expire without having been exercised, the Share Exchange Price as adjusted upon the issuance of such rights, options or Convertible Securities shall be readjusted to the Share Exchange Price which would have been in effect had an adjustment been made on the basis that the only Additional HT Common Shares so issued were the Additional HT Common Shares, if any, actually issued or sold on the exercise of such rights or options or rights of conversion of such Convertible Securities, and such Additional HT Common Shares, if any, were issued or sold for the consideration actually received by HT upon such exercise, plus the consideration, if any, actually received by HT for the granting of all such rights or options,

whether or not exercised, plus the consideration received for issuing or selling the Convertible Securities actually converted, plus the consideration, if any, actually received by HT (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) on the conversion of such Convertible Securities.

(iv) "HT Common Shares" shall mean and include Class A Common Shares, as constituted on the date of filing of the Certificate, provided, however, that such term, when used to describe the securities receivable upon exchange of the Limited Partner Units, shall include only shares designated as HT Common Shares on the date of filing of the Certificate of Limited Partnership, any shares resulting from any combination or subdivision thereof referred to in Section 13.1(f), or in case of any reorganization or reclassification of the outstanding shares thereof, the stock, securities or assets provided for in Section 13.1(g)). "Additional HT Common Shares" shall mean all HT Common Shares issued by HT or deemed to be issued pursuant to this Section 13.1(h)(iv), whether or not subsequently reacquired or retired by HT. The "Effective Price" of Additional HT Common Shares shall mean the quotient determined by dividing the aggregate consideration received, or deemed to have been received by HT for such issuance or sale or deemed issuance or sale under this Section 13.1(h)(iv), for such Additional HT Common Shares by the total number of Additional HT Common Shares issued or sold, or deemed to have been issued or sold by HT under this Section 13.1(h)(iv).

(v) If HT proposes to issue or sell Additional Shares of HT Common Shares for an Effective Price that is less than eighty-five percent (85%) of the Share Exchange Price and such issuance or sale will result in a reduction of the Share Exchange Price pursuant to this Section 13.1 (an "AMEX Dilutive Issuance"), then the AMEX Dilutive Issuance and the resulting potential issuance of Additional HT Common Shares upon exchange of the Limited Partner Units at an Share Exchange Price below the initial Share Exchange Price, must be approved by the shareholders of HT to the extent required by the rules of the American Stock Exchange. If such holders do not approve the AMEX Dilutive Issuance, and the resulting potential issuance of Additional HT Common Shares upon conversion of the Limited Partner Units at an Share Exchange Price below the initial Share Exchange Price, as required to be approved by the preceding sentence, then HT shall not consummate the AMEX Dilutive Issuance in any manner that would cause a reduction of the Share Exchange Price pursuant to this Section 13.1.

(f) In each case of an adjustment or readjustment of the Share Exchange Price for the number of Class A Common Shares, OP Partnership Units or other securities issuable upon exchange of the Limited Partner Units, if the Limited Partner Units are then exchangeable pursuant to this Article 13, HT, at its expense, shall compute such adjustment or readjustment in accordance with the provisions hereof and prepare a certificate showing such adjustment or readjustment, and shall mail such certificate, by first class mail, postage prepaid, to each registered holder of Limited Partner Units at such holder's address as shown in the Company's books and records. The certificate shall set forth such adjustment or readjustment, showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (i) the consideration received or deemed to be received by HT for any Additional Class A Common Shares issued or sold or deemed to have been issued or sold, (ii) the Share Exchange Price in

effect at the time, (iii) the number of Additional Class A Common Shares issued or sold or deemed to have been issued or sold and (iv) the type and amount, if any, of other property which at the time would be received upon exchange of the Limited Partner Units.

(g) Notwithstanding anything herein to the contrary, no adjustment of the Share Exchange Price shall be made pursuant to this Article 13 in an amount less than $.01 per Limited Partner Unit, and any such lesser adjustment shall be carried forward and shall be made at the time and together with the next subsequent adjustment which together with any adjustments so carried forward shall amount to $.01 per Limited Partner Unit or more.

(h) Upon (i) any taking by HT of a record of the holders of any class of securities of HT for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or (ii) any Acquisition (as defined in Section 15.1(a)(i)(A)) or other capital reorganization of HT, any reclassification or recapitalization of the capital stock of HT, any merger or consolidation of HT with or into any other entity, or any Asset Transfer (as defined in Section 15.1(a)(i)(B)), or any voluntary or involuntary dissolution, liquidation or winding up of HT, HT shall mail to each holder of Limited Partner Units at least ten (10) days prior to the record date specified therein a notice specifying (A) the date on which any such record is to be taken for the purpose of such dividend or distribution and a description of such dividend or distribution, (B) the date on which any such Acquisition, reorganization, reclassification, transfer, consolidation, merger, Asset Transfer, dissolution, liquidation or winding up is expected to become effective, and (C) the date, if any, that is to be fixed as to when the holders of record of Class A Common Shares (or other securities) shall be entitled to exchange their Class A Common Shares (or other securities) for securities or other property deliverable upon such Acquisition, reorganization, reclassification, transfer, consolidation, merger, Asset Transfer, dissolution, liquidation or winding up.

(i) No fractional Class A Common Shares shall be issued upon the exchange of Limited Partner Units. All Class A Common Shares (including fractions thereof) issuable upon the exchange of the Limited Partner Units by a holder thereof shall be aggregated for purposes of determining whether the exchange would result in the issuance of any fractional shares. If, after the aforementioned aggregation, the exchange would result in the issuance of any fractional shares, HT shall, in lieu of issuing any fractional shares, pay cash equal to the product of such fraction multiplied by the Class A Common Shares' fair market value per share on the date of exchange (as reported by the American Stock Exchange, on which the Class A Common Shares are then listed for trading, or if none, the most recently reported "over the counter" trade price).

(j) HT shall at all times reserve and keep available out of its authorized but unissued Class A Common Shares, solely for the purpose of effecting the exchange of the Limited Partner Units, such number of its Class A Common Shares as shall from time to time be sufficient to effect the exchange of all Limited Partner Units. If at any time the number of authorized but unissued Class A Common Shares shall not be sufficient to effect the exchange of all Limited Partner Units, HT shall, prior to exceeding such number of authorized but unissued shares, take such action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued Class A Common Shares to such number of shares as shall be sufficient for such purpose.

(k) Any notice required by the provisions of this Article 13 shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient; if not, then on the next Business Day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All notices shall be addressed to each holder of record at the address of such holder appearing on the books of the Company.

(l) HT shall pay any and all stamp, transfer and other similar taxes payable or determined to be payable in connection with the issuance of the Class A Common Shares issuable upon the exchange of the Limited Partner Units.

the Section 13 Initiating Partner shall cause the appraiser to commence his/her appraisal of the fair market value of the Company. The appraiser appointed pursuant to this Section shall be a disinterested person of recognized competence who has had a minimum of ten (10) years experience in appraising commercial real estate in the states in which the Property(ies) are located. The appraiser shall determine the fair market value of the Company on the basis of all relevant factors affecting fair market value. The cost and expense of the appraiser and the appraisal process shall be borne by the Company.

(a) Promptly after the determination of the fair market value of the Company in accordance with Section 13.2 above, the Company or the Section 13 Initiating Partner, as the case may be, shall either (x) pay in full the principal of the note, together with accrued interest thereon, or (y) cause the applicable Subsidiary(ies) to sell Property(ies) in connection with a "Suitable Offer" for a purchase price payable in cash (within the meaning of Section 13.3(c)) equal to or greater than the principal amount of the note together with an amount reasonably anticipated to be the accrued interest thereon at the anticipated closing of the sale of the Property(ies) hereunder, the unpaid principal balance of all Mortgages encumbering the Property(ies) and the unpaid principal balance of all other indebtedness of the Company and the applicable Subsidiary(ies) for borrowed money attributable to such Property(ies) and apply the proceeds from such sale, to repay the principal of the note, together with accrued interest thereon, on the date(s) such Property(ies) are sold and to repay such amount in full on the date the last Property(ies) are sold. Until such time as the note is paid in full, the Section 13 Initiating Partner and the Company shall deliver, on a timely basis, to the other Partner, all information, materials, data, timetables, etc. relating to the sale of the Property(ies) and the Company; it being the intent of the parties hereto that the Target Partner be kept fully informed of the operation of the Company and the sale referred to herein.

(b) For purposes of this Section 13.3, the term "Suitable Offer" shall mean a written offer to purchase the Property(ies) referred to in this Section 13.3 for a specified price from a financially responsible Person, identified therein by name and address, who reasonably appears capable of complying with the terms of the Suitable Offer, and which does not contain terms or conditions which the Company or the relevant Subsidiary(ies), is/are not reasonably capable of performing.

(c) For purposes of this Section 13.3, the purchase price for the Property(ies) referred to in this Section 13.3 shall be deemed to be payable in cash if the purchase price is payable in part by assuming, or taking title to the Property(ies) subject to, all or any of the existing Mortgages and the balance is payable in cash, provided that the amount of cash is sufficient to satisfy the principal amount of the note referred to in this Section 13.3 together with an amount reasonably anticipated to be the accrued interest thereon at the anticipated closing of the sale of the Property(ies) hereunder.

In addition, as a condition to any Partner becoming a Section 13 Initiating Partner, such Partner shall arrange for the specific release of the Target Partner and/or any Affiliates of

the Target Partner from the primary liability (as opposed to continuing liabilities, such as environmental liabilities, which cannot be released) to any Institutional Lenders having outstanding loans to the Company (including the cancellation and return of all guarantees, letters of credit, and other security or assurances posted or made by the Target Partner or any Affiliates of the Target Partner).

ARTICLE 14

CONFIDENTIALITY

disclosed Confidential Information that any other Partner designates. The cost (including, without limitation, attorneys' fees and expenses) of obtaining a protective order covering Confidential Information designated by such other Partner will be borne by the Company.

ARTICLE 15

DISSOLUTION OF COMPANY

(a) The Company shall be dissolved and its affairs wound up upon the occurrence of any of the following events:

(2) the consent in writing by the Partners, acting unanimously, that the Company shall be dissolved.

(b) The Company shall not be dissolved by the resignation, withdrawal, bankruptcy or dissolution of a Partner and the Company's business shall continue pursuant to Section 17-801 of the Act. In the event of the withdrawal of the General Partner, within 90 days after such withdrawal, the Limited Partner shall appoint, effective as of the date of the withdrawal, a replacement general partner or general partners for the Company by the affirmative vote of the Limited Partners owning at least fifty-one percent (51%) of the total Percentage Interests of all Limited Partners.

other obligation entered into by or on behalf of the Company. The full rights, powers and authorities of the General Partner shall continue so long as appropriate and necessary to complete the process of winding up the business and affairs of the Company.

(a) first, to pay any debts or liabilities of the Company and the Subsidiaries and then to pay, if applicable, the costs and expenses of winding up and terminating the Company and the Subsidiaries;

(b) next, to establish any reserves which the General Partner reasonably determines to be necessary to provide for any contingent or unforeseen liabilities or obligations of the Company and the Subsidiaries (as the General Partner reasonably determines to be advisable);

If the Limited Partner has a deficit balance in its Capital Account (after giving effect to all contributions, distributions and allocations for all taxable years, including the year during which such liquidation occurs), such Partner shall have no obligation to make any contribution to the capital of the Company with respect to such deficit, and such deficit shall not be considered a debt owed to the Company or to any other Person for any purpose whatsoever.

the distribution of the Capital Proceeds from the Terminating Capital Transaction among the Partners and upon final liquidation of the Company, the Capital Account of the Limited Partner is negative, such Partner shall not be obligated to restore to any extent the negative balance in its Capital Account.

ARTICLE 16

MISCELLANEOUS PROVISIONS

(a) If to the Limited Partner, to:

CNL Hospitality Properties, Inc.

CNL Center at City Commons
450 South Orange Avenue
Orlando, Florida 32801-3336 Facsimile: 407-650-1085

Attn: Brian Strickland

with a copy (which shall not constitute notice hereunder) to:

Greenberg Traurig, LLP
The MetLife Building
200 Park Avenue
New York, New York 10166
Facsimile: 212-801-6400
Attn: Judith Fryer, Esq.

Alan S. Gaynor, Esq.

(b) If to the General Partner, to:

Hersha Hospitality Limited Partnership 148 Sheraton Drive
Box A
New Cumberland, Pennsylvania 17070 Facsimile: 717-974-7383
Attn: Hasu P. Shah

with a copy (which shall not constitute notice) to:

Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219
Facsimile: 804-788-8218
Attn: Cameron N. Cosby, Esq.

Randall S. Parks, Esq.

Any of the above addresses may be changed at any time by notice given as provided above; provided, however, that any such notice of change of address shall be effective only upon receipt. All notices, requests or instructions given in accordance herewith shall be deemed received on the date of delivery, if hand delivered, on the date of receipt, if telecopied, three Business Days after the date of mailing, if mailed by registered or certified mail, return receipt requested, and one Business Day after the date of sending, if sent by Federal Express or other recognized overnight courier.

FURTHER ACKNOWLEDGES THAT EACH HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER.

[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY;
SIGNATURES APPEAR ON THE FOLLOWING PAGE.]

IN WITNESS WHEREOF, the undersigned parties have signed this Limited Partnership Agreement of the Company as of the day and year first above written.

GENERAL PARTNER:

HERSHA HOSPITALITY LIMITED PARTNERSHIP,
a limited partnership organized under the laws of the
Commonwealth of Virginia

By: Hersha Hospitality Trust,
its general partner

By:  /s/ Ashish R. Parikh
     Name:  Ashish R. Parikh
     Title: Chief Financial Officer

LIMITED PARTNER:

CNL HOSPITALITY PARTNERS, L.P.,
a Delaware limited partnership

By: CNL Hospitality GP Corp.,
its general partner

By:  /s/ Tammie A. Quinlan
     Name:  Tammie A. Quinlan
     Title: Senior Vice President

HT/CNL METRO HOTELS, L.P.

By: Hersha Hospitality Limited Partnership,
its general partner

By: Hersha Hospitality Trust,
its general partner

By:  /s/ Ashish R. Parikh
     Name:  Ashish R. Parikh
     Title: Chief Financial Officer

Hersha Hospitality Trust joins in this Agreement for the sole purpose of acknowledging its obligations with respect to the Exchange Rights of the Limited Partner pursuant to Article 13.

HERSHA HOSPITALITY TRUST

By: /s/ Ashish R. Parikh
    Name:  Ashish R. Parikh
    Title:    Chief Financial Officer

Hersha Hospitality Management, L.P. joins in this Agreement for the sole purpose of acknowledging its obligations with respect to Sections 3.1, 3.4 and 6.8 hereof.

HERSHA HOSPITALITY MANAGEMENT, L.P.

By: Hersha Hospitality Management, Co.,
its general partner

By: /s/ David L. Desfor
    Name:  David L. Desfor
    Title:    Controller

EXHIBIT A

ACQUISITION PROFILE

To be agreed upon by the parties

EXHIBIT B

PROPERTIES

None, as of the Effective Date

Tom Arasi
Brian Strickland
Charles Muller
Hasu P. Shah
Kiran P. Patel
Neil H. Shah

PARTNER          PERCENTAGE INTEREST   PARTNERSHIP UNITS  CAPITAL CONTRIBUTION
---------------  --------------------  -----------------  ---------------------

General Partner         33.333%                1          $              100.00
Limited Partner         66.667%                2          $              200.00