8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 8, 2005

HERSHA HOSPITALITY TRUST

(Exact name of registrant as specified in its charter)

Maryland	001-14765	251811499
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

510 Walnut Street, 9^th Floor

Philadelphia, Pennsylvania 19106

(Address and zip code of

principal executive offices)

Registrant’s telephone number, including area code: (215) 238-1046

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE

In June 2005, Hersha Hospitality Limited Partnership ("HHLP"), the operating partnership subsidiary of Hersha Hospitality Trust, a Maryland real estate investment trust ("Hersha"), signed a definitive agreement to enter into a joint venture with Waterford Hospitality Group LLC (“Waterford”) and Mystic Hotel Investors, LLC (“MHI” and together with Waterford, the “Waterford Parties”), under the name Mystic Partners, LLC ("Mystic Partners"). The purpose of the joint venture was to acquire and own in a series of closings a nine hotel portfolio of Marriott- and Hilton-branded hotels owned by the Waterford Parties and located in Connecticut and Rhode Island with an aggregate value of approximately $250.0 million.

On February 8, 2005, Hersha and the Waterford Parties closed on the final acquisition by Mystic Partners. In connection with this closing, the parties amended certain of the transaction documents as more fully described herein. Hersha is filing this Current Report on Form 8-K to disclose (i) the entry into and amendment of certain material definitive agreements, (ii) the acquisition by Mystic Partners of the Hartford Marriott in Hartford, Connecticut (the “Hartford Marriott”), the ninth of nine hotels intended to be acquired by Mystic Partners and (iii) the adjustment of its equity ownership in the Hilton Hartford in Hartford, Connecticut.

Hersha has filed the following Current Reports on Form 8-K related to its joint venture transaction with the Waterford Parties and all should be deemed amended and superceded by this Current Report on Form 8-K:

Form	Filing Date	Description of Disclosure
8-K	June 21, 2005	Entry into the joint venture agreements.
8-K/A #1	July 25, 2005	Historical and pro forma financial information.
8-K/A #2	August 3, 2005	Pro forma financial information to reflect the terms of the joint venture.
8-K	August 15, 2005	Closing on the acquisition of six hotels.
8-K/A #1	September 21, 2005	Closing on the acquisition of the seventh hotel.
8-K/A #2	October 12, 2005	Closing on the acquisition of the eighth hotel.

Item 1.01. Entry into a Material Definitive Agreement.

Membership Interests Contribution Agreement

On February 8, 2006, Hersha entered into a Sixth Amendment to the Membership Interests Contribution Agreement (the “Sixth Amendment”), by and among HHLP, MHI, Waterford and First American Title Insurance Company, as escrow agent, pursuant to which the parties agreed to adjust each party’s equity ownership interest in each of the Hartford Hilton and the Hartford Marriott, each a development hotel located in Hartford, Connecticut. As previously disclosed in Hersha’s Current Report on Form 8-K filed June 21, 2005, Hersha and Waterford initially agreed to own 50.0% of Mystic Partners' equity ownership interests in each of the Hartford Hilton and the Hartford Marriott. Pursuant to the Sixth Amendment, Hersha and Waterford have agreed to adjust their respective ownership interests in the Hartford Hilton and the Hartford Marriott as follows:

	Hersha	Waterford
Hartford Hilton	10%	90%
Hartford Marriott	15%	85%

The preceding summary of the Contribution Amendment is qualified in its entirety by reference to the Sixth Amendment, a copy of which is attached hereto as Exhibit 10.5, and incorporated by reference herein.

Limited Liability Company Operating Agreement of Mystic Partners, LLC

On February 8, 2006, HHLP entered into the Second Amendment to Limited Liability Company Operating Agreement of Mystic Partners, LLC (the “JV Amendment”) with MHI, pursuant to which the parties adjusted their rights and obligations under the JV Agreement to reflect their adjusted equity ownership interests (as described above) in the Hartford Hilton and the Hartford Marriott. Additionally, the JV Amendment provides HHLP the option to purchase up to a 50.0% equity ownership interest in Mystic Partners' equity interest in the Hartford Hilton and the Hartford Marriott, respectively, at a price determined in accordance with JV Amendment. The preceding summary of the JV Amendment is qualified in its entirety by reference to the JV Amendment, a copy of which is attached hereto as Exhibit 10.6, and incorporated by reference herein.

Limited Liability Company Operating Agreement of Mystic Partners Leaseco, LLC

On February 8, 2006, HHLP entered into the First Amendment to Limited Liability Company Operating Agreement of Mystic Partners Leaseco, LLC (the “Leaseco Amendment”) with MHI, pursuant to which the parties adjusted their equity ownership interests (to the same extent as described above) in the entities that lease and operate the Hartford Hilton and the Hartford Marriott and to provide HHLP the option to purchase up to 50.0% of MHI’s interest in the entities that lease and operate the Hartford Hilton and the Hartford Marriott, respectively. The preceding summary of the Leaseco Amendment is qualified in its entirety by reference to the Leaseco Amendment, a copy of which is attached hereto as Exhibit 10.7, and incorporated by reference herein.

Conditional Payment Guaranty Agreements

On February 8, 2006, HHLP entered into a Conditional Payment Guaranty (the “Marriott Guaranty”) made by HHLP and MHI to and for the benefit of Merrill Lynch Capital (“MLC”), pursuant to which HHLP and MHI jointly and severally guarantee the performance of the terms of a loan from MLC to Adriaen’s Landing Hotel LLC, ("Adriaen's") the owner of the Hartford Marriott in the amount of $50.0 million, if at any time during the term of the note and during such time as the net worth of Mystic Partners falls below $50.0 million. The preceding summary of the Marriott Guaranty is qualified in its entirety by reference to the Marriott Guaranty, a copy of which is attached hereto as Exhibit 10.8, and incorporated by reference herein.

On February 8, 2006, HHLP entered into a Conditional Payment Guaranty (the “Hilton Guaranty”) made by HHLP and MHI to and for the benefit of MLC, pursuant to which HHLP and MHI jointly and severally guarantee the performance of the terms of a loan from MLC to 315 Trumbull Street Associates, LLC, ("Trumbull Street") the owner of the Hartford Hilton, in the amount of $27.0 million, if at any time during the term of the note and during such time as the net worth of Mystic Partners falls below $50.0 million. The preceding summary of the Hilton Guaranty is qualified in its entirety by reference to the Hilton Guaranty, a copy of which is attached hereto as Exhibit 10.9, and incorporated by reference herein.

Supplemental Limited Joinder

On February 8, 2006, HHLP and MHI entered into a Supplemental Limited Joinder (the “Joinder”) pursuant to which HHLP and MHI agree to guaranty full and complete payment to MLC for any losses incurred by MLC in the event of certain happenings related to MLC’s loan to Adriaen’s and MLC's loan to Trumbull Street including but not limited to instances of the following acts committed by Adriaen’s or Trumbull Street:  fraud, missapplication and missappropriation of funds, failure to provide insurance, and breaches of environmental representations and warranties made in the loan agreement. In addition, the Joinder provides that HHLP and MHI will guaranty full and complete payment to MLC for any losses incurred by the failure of Adriaen’s to obtain a certificate of occupancy for the Hartford Marriott on or before June 30, 2006, for any reason whatsoever. The preceding summary of the Joinder is qualified in its entirety by reference to the Joinder, a copy of which is attached hereto as Exhibit 10.10, and incorporated by reference herein.

Item 2.01. Completion of Acquisition or Disposition of Assets.

In June 2005, HHLP signed a definitive agreement, as amended, to enter into a joint venture with Waterford and MHI, pursuant to which the parties agreed to establish the Mystic Partners joint venture. The Waterford Parties agreed to contribute to Mystic Partners a portfolio of its membership interests (the "Membership Interests") in nine entities, each of which was either wholly-owned or majority-owned by the Waterford Parties (the "Owners"), which in turn own nine Marriott- or Hilton-branded hotels in Connecticut and Rhode Island that in June 2005 had an aggregate value of approximately $250.0 million. Hersha agreed to contribute to Mystic Partners approximately $52.0 million in cash, subject to adjustment (the "Cash Payment"), in exchange for a 66.7% preferred equity interest in the seven stabilized hotel properties in the portfolio and a 50% preferred equity interest in the two newly-developed hotel properties in the portfolio, subject to minority interest participations in certain hotels. The material provisions of the material agreements related to this transaction are described in a Current Report on Form 8-K filed by Hersha on June 21, 2005, as amended by Forms 8-K/A filed on June 25, 2005 and August 3, 2005

On February 8, 2006, Mystic Partners closed on the acquisition of the 409 room Hartford Marriott in Hartford, Connecticut, the final hotel in the Waterford portfolio to be acquired by Mystic Partners. The acquisition included the hotel, improvements, certain personal property and a pre-paid airspace sublease relating to airspace comprising a portion of the Hartford Convention Center. Hersha contributed approximately $6.7 million to Mystic Partners, and the Waterford Parties contributed its Membership Interests in the Owner of the Hartford Marriott. In connection with this closing, Mystic Partners issued membership interests to HHLP equivalent to a 15.0% interest in Mystic Partners’ interest in Adriaen’s and issued membership interests to the Waterford Parties. A minority partner owned approximately 4.0% of the interests in Adriaen's; although, Hersha purchased 15.0% of the minority partner’s interest as part of the closing. HHLP has an option to purchase up to a 50.0% preferred equity interest in Mystic Partners' interest in the Hartford Marriott and the minority parties interest in the Hartford Marriott until December 31, 2007.

In connection with the closing, Adriaen's incurred approximately $45.0 million of aggregate debt secured by the Hartford Marriott. This debt matures in 2010 and accrues interest at one-month LIBOR plus 2.9%. Each of MHI and HHLP entered into the Marriott Guaranty described in Item 1.01 herein. In addition, MHI, Mystic Partners and HHLP entered into an Indemnity Agreement, dated February 8, 2006, pursuant to which MHI agrees to indemnify (i) Mystic Partners for costs incurred by Mystic Partners related to expenses for developing the Hartford Marriott and (ii) HHLP for costs incurred by HHLP in the event that the Hartford Marriott does not obtain a certificate of occupancy on or before June 30, 2006.

As of the date hereof, Hersha’s has invested approximately $40.0 million in Mystic Partners, which has acquired the following nine properties:

Hotel	Location	Date Acquired	Rooms
Mystic Marriott Hotel & Spa	Groton, CT	August 9, 2005	285
Danbury Residence Inn	Danbury, CT	August 9, 2005	78
Southington Residence Inn	Southington, CT	August 9, 2005	94
Norwich Courtyard by Marriott and Rosemont Suites	Norwich, CT	August 9, 2005	144
Warwick Courtyard by Marriott	Warwick, RI	August 9, 2005	92
Waterford SpringHill Suites	Waterford, CT	August 9, 2005	80
Residence Inn by Marriott and Whitehall Mansion	Stonington, CT	September 15, 2005	133
Hartford Hilton	Hartford, CT	October 6, 2005	392
Hartford Marriott	Hartford, CT	February 8, 2006	409

Hersha and Waterford maintain the following ownership interests in the properties acquired by  Mystic Partners:

Hotel	Owner	Hersha Interest in Owner	Waterford Parties Interest in Owner	Minority Interest in Owner
Mystic Marriott Hotel & Spa	Exit 88 Hotel LLC	66.7%	33.3%	n/a
Danbury Residence Inn	Danbury Suites LLC	66.7%	33.3%	n/a
Southington Residence Inn	Southington Suites LLC	44.7%	22.3%	33.0%
Norwich Courtyard by Marriott and Rosemont Suites	Norwich Hotel, LLC	66.7%	33.3%	n/a
Warwick Courtyard by Marriott	Warwick Lodgings, LLC	66.7%	33.3%	n/a
Waterford SpringHill Suites	Waterford Suites, LLC	66.7%	33.3%	n/a
Residence Inn by Marriott and Whitehall Mansion	Whitehall Mansion Partners LLC	66.7%	33.3%	n/a
Hartford Hilton	315 Trumbull Street Associates, LLC	8.8%	79.2%	12.0%
Hartford Marriott	Adriaen’s Landing Hotel, LLC	15.0%	81.3%	3.7%

Mystic Partners Limited Liability Company Agreement

Hersha and the Waterford Parties formed Mystic Partners as a Delaware limited liability company. Waterford is the managing member of the company. Pursuant to Mystic Partner's limited liability company agreement, as amended (the "JV LLC Agreement"), in exchange for its contribution of the Membership Interests, the Waterford Parties have received cash and membership interests in Mystic Partners representing 33.3% interest in the first seven properties (the “Stabilized Properties”), subject to a minority interest participation in Southington. In exchange for its cash contributions, HHLP has received membership interests in Mystic Partners representing 66.7% interests in the Stabilized Properties, subject to a minority interest participation in Southington. Any additional capital contributions to Mystic Partners shall be made 66.7% by Hersha and 33.3% by the Waterford Parties in respect of the Stabilized Properties, subject to minority interest participation in Southington.

For the acquisition of the Hartford Hilton, in exchange for its contribution of the Membership Interests, the Waterford Parties received cash and membership interests in Mystic Partners representing 50.0 % of Mystic Partners' interest in the Hartford Hilton, which is subject to a minority interest participation. In exchange for its cash contributions, HHLP received membership interests in Mystic Partners representing 50.0% of Mystic Partners' interest in the Hartford Hilton, subject to a minority interest participation.

On February 8, 2006, the Waterford Parties purchased approximately $5.4 million of HHLP’s 50.0% interest in Mystic Partners’ interest in the Hartford Hilton. Thereafter, HHLP owns membership interests in Mystic Partners representing 10.0% of Mystic Partners’ interest in the Hartford Hilton, subject to a minority interest participation. HHLP has an option to purchase up to a 50.0% of Mystic Partners' preferred equity interest in the Hartford Hilton until December 31, 2007. Any additional capital contributions to Mystic Partners in respect of Trumbull Street, shall be made 10.0 % by Hersha and 90.0 % by the Waterford Parties.

For the acquisition of the Hartford Marriott, in exchange for its contribution of the Membership Interests, the Waterford Parties have received cash and membership interests in Mystic Partners representing approximately 85.0% of Mystic Partners' interest in the Hartford Marriott, which is subject to a minority interest participation. In exchange for its cash contributions, HHLP has received membership interests in Mystic Partners representing 15.0% of Mystic Partners' interest in the Hartford Marriott, subject to a minority interest participation in Adriaen. Any additional capital contributions to Mystic Partners in respect of Adriaen, shall be made 15.0 % by Hersha and 85.0 % by the Waterford Parties.

The JV LLC Agreement, as amended, provides that net cash flow from Mystic Partners will be distributed as follows:

· first, to HHLP to provide an 8.5% annual non-compounded return on its unreturned capital contributions from 100% of the net cash flow from the Stabilized Properties and 10% of the net cash flow from the Hartford Hilton and 15% of the net cash flow from the Hartford Marriott;

· second, to the Waterford Parties to provide an 8.5% annual non-compounded return on its unreturned capital contributions from 100% of the net cash flow from the Stabilized Properties and 90% of the net cash flow from the Hartford Hilton and 85% of the net cash flow from the Hartford Marriott; and  

· thereafter, to HHLP, 56.7% with respect to net cash flow from Stabilized Properties and 10.5% with respect to net cash flow from the Hartford Marriott and 7.0% with respect to net cash flow from the Hartford Hilton, and to the Waterford Parties, 43.3% with respect to net cash flow from Stabilized Properties and 89.5% with respect to net cash flow from the Hartford Marriott and 93.0% with respect to net cash flow from the Hartford Hilton.

The JV LLC Agreement, as amended, provides that proceeds from any capital transactions shall be distributed as follows:

· first, to HHLP in return of its capital contributions in respect to the property generating the capital proceeds;  

· second, to the Waterford Parties, in return of its capital contributions in respect of the property generating the capital proceeds;  

· third, to HHLP to provide an 8.5% return on its capital contributions in respect of such property;  

· fourth, to the Waterford Parties to provide an 8.5% return on its capital contributions in respect of such property; and  

· thereafter, to Hersha, 56.7% with respect to net cash flow from Stabilized Properties and 10.5% with respect to net cash flow from the Hartford Marriott and 7.0% with respect to net cash flow from the Hartford Hilton, and to the Waterford Parties, 43.3% with respect to net cash flow from Stabilized Properties and 89.5% with respect to net cash flow from the Hartford Marriott and 93.0% with respect to net cash flow from the Hartford Hilton.

The JV LLC Agreement provides that if either member develops, purchases, owns or manages a hotel property within a five-mile radius of any of the joint venture properties, it shall give the other member the right to participate in such property on terms similar to the parties' related participations in Mystic Partners. The JV LLC Agreement also provides that HHLP will have a right of first offer to purchase any of the properties owned by the Waterford Parties to be sold to a third party.

Lessee Companies

As part of the transaction, Hersha's primary taxable REIT subsidiary entered into a limited liability company agreement, as amended ("Leaseco LLC Agreement") with the Waterford Parties to form a leasing holding company ("Leaseco") on terms and conditions similar to and in ownership proportions corresponding to those under the JV LLC Agreement. Pursuant to the Leaseco LLC Agreement, Leaseco has established subsidiary companies ("Lessees") that have issued ownership interests to their members corresponding to the membership interests in the Owners. The respective Lessees have entered into leases, franchise agreements and the Management Agreements (discussed below) for each property.

Asset Management Agreement

Each Owner (other than Southington and Trumbull Street) has entered into an Asset Management Agreement with 44 New England Management Company, a subsidiary of Hersha (the "Asset Manager") to provide asset management services for each property. The Asset Manager receives a monthly fee of 1% of operating revenues of the seven Stabilized Properties. For the Hartford Marriott, the Asset Manager receives a monthly fee of 0.25% of operating revenues of the property. In the case of the Southington Residence Inn, the Asset Management Agreement is between the Asset Manager and Waterford Hotel Group, Inc., as manager. On February 8, 2006, the Asset Management Agreement for the Hartford Hilton was terminated, and the Asset Manager does not receive an asset management fee for the Hartford Hilton.

Hotel Management Agreement

Each property owned by Mystic Partners managed by Waterford Hotel Group, Inc., an affiliate of Waterford. Under a Management Agreement entered into between the property manager and each lessee, the property manager will receive a base fee of 3% or 4% of gross revenues of the property, depending on the property, and an incentive fee of 10% of net operating income less debt service after each of HHLP and the Waterford Parties receive a 12.0% annual non-compounded return on its unreturned capital contributions (as a result of the net cash flow distributions described above).

The preceding summaries of the JV LLC Agreement, Leaseco LLC Agreement and Management Agreement are qualified in their entirety by reference to the terms of the actual documents. Copies of the Contribution Agreement, the form of JV LLC Agreement, the form of Leaseco LLC Agreement and the form of Management Agreement were filed as Exhibits 10.1 through 10.4, respectively, to our Current Report on Form 8-K/A on June 21, 2005.

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

We have previously filed the following financial statements of relating to the Mystic Partners joint venture as Exhibit 99.1 to our Current Report on Form 8-K/A filed on July 25, 2005:

· Waterford Hospitality Group, LLC and Subsidiaries audited consolidated financial statements as of December 31, 2004 and 2003 and for each of the three years in the period ended December 31, 2004;  

· Waterford Hospitality Group, LLC and Subsidiaries unaudited consolidated financial statements as of and for the three month periods ending March 31, 2005 and 2004; and  

· Mystic Partners, LLC and Subsidiaries unaudited pro forma financial information as of and for the years ending December 31, 2004, 2003 and 2002 and as of and for the three month periods ending March 31, 2005 and 2004, which were presented to give effect to the exclusion of certain entities and businesses of Waterford Hospitality Group from the assets being contributed to Mystic Partners.

To the extent required by this item, additional financial statements will be filed as part of an amendment to this Current Report on Form 8-K.

(b) Pro Forma Financial Information

We have previously filed the following pro forma financial information relating to the Mystic Partners joint venture as Exhibit 99.2 to our Current Report on Form 8-K/A filed on July 25, 2005 as amended by our Current Report on Form 8-K/A filed on August 3, 2005:

· unaudited pro forma consolidated statement of operations for the year ended December 31, 2004;  

· unaudited pro forma consolidated balance sheet as of March 31, 2005; and  

· unaudited pro forma consolidated statement of operations for the three months ended March 31, 2005.

To the extent required by this item, additional financial statements will be filed as part of an amendment to this Current Report on Form 8-K.

(c) Exhibits

10.1 Membership Interests Contribution Agreement, dated June 15, 2005, by and among Waterford Hospitality Group, LLC, Mystic Hotel Investors, LLC and Hersha Hospitality Group Limited Partnership (incorporated by reference to the Current Report on Form 8-K filed June 21, 2005).

10.2 Form of Limited Liability Company Agreement of Mystic Partners, LLC (incorporated by reference to the Current Report on Form 8-K filed June 21, 2005).

10.3 Form of Management Agreement between Lessee and Waterford Hotel Group, Inc. (incorporated by reference to the Current Report on Form 8-K filed June 21, 2005).

10.4 Form of Limited Liability Company Agreement of Leaseco, LLC (incorporated by reference to the Current Report on Form 8-K filed June 21, 2005).

10.5 Sixth Amendment to Membership Interests Contribution Agreement, dated February 8, 2006, by and among Hersha Hospitality Limited Partnership, Mystic Hotel Investors, LLC; Waterford Hospitality Group, LLC and First American Title Insurance Company.

10.6 Second Amendment to Limited Liability Company Operating Agreement of Mystic Partners, LLC, dated February 8, 2006.

10.7 First Amendment to Limited Liability Company Operating Agreement of Mystic Partners Leaseco, LLC, dated February 8, 2006.

10.8 Conditional Payment Guaranty, dated February 8, 2006, made by Hersha Hospitality Limited Partnership and Mystic Hotel Investors, LLC to and for the benefit or Merrill Lynch Capital.

10.9 Conditional Payment Guaranty, dated February 8, 2006, made by Hersha Hospitality Limited Partnership and Mystic Hotel Investors, LLC to and for the benefit or Merrill Lynch Capital.

10.10 Supplemental Limited Joinder, dated February 8, 2006, made by Hersha Hospitality Limited Partnership and Mystic Hotel Investors LLC.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	HERSHA HOSPITALITY TRUST
	By:	/s/ Ashish R. Parikh
			Ashish R. Parikh
			Chief Finaincial Officer
Date: February 13, 2006

EX-10.5

Exhibit 10.5

SIXTH AMENDMENT TO

MEMBERSHIP INTERESTS CONTRIBUTION AGREEMENT

This Sixth Amendment to Membership Interests Contribution Agreement dated as of February 8, 2006 (this “Sixth Amendment”), by and among Mystic Hotel Investors, LLC, a Delaware limited liability company (“Mystic”), Waterford Hospitality Group, LLC, a Delaware limited liability company (“Waterford” and together with Mystic, the “Contributor”), Hersha Hospitality Limited Partnership, a Virginia limited partnership (“Investor”), and First American Title Insurance Company, as Escrow Agent.

WITNESSETH:

WHEREAS, Contributor and Investor have entered into a Membership Interests Contribution Agreement dated as of June 15, 2005 (“Original Contribution Agreement”), pursuant to which, and subject to the terms and conditions thereof, Contributor shall contribute to the Company the Membership Interests and Investor shall make the Cash Payment;

WHEREAS, the parties to the Original Contribution Agreement have entered into a First Amendment to Membership Interests Contribution Agreement dated as of July 8, 2005 (the “First Amendment”), a Second Amendment to Membership Interests Contribution Agreement dated as of July 25, 2005 (the “Second Amendment”), a Third Amendment to Membership Interests Contribution Agreement dated as of August 8, 2005 (the “Third Amendment”), a Fourth Amendment to Membership Interests Contribution Agreement dated as of September 15, 2005 (the “Fourth Amendment”), and a Fifth Amendment to Membership Interests Contribution Agreement dated as of November 1, 2005 (the “Fifth Amendment”, together with the Original Contribution Agreement, as amended by the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment and the Fifth Amendment, the “Contribution Agreement”);

WHEREAS, the parties to the Contribution Agreement desire to restructure the capital sharing ratios and other related equity and cost sharing mechanisms with respect to the Development Assets (the “Equity Restructuring”) contained in the Contribution Agreement, the LLC Agreement and the Lessee LLC Agreement and as a result thereof to (1) effect appropriate prorations and adjustments at the Closing with respect to the Development Asset commonly known as the Hartford Marriott to reflect the Equity Restructuring and (2) modify, supplement and terminate certain documents related to the operation of the Development Assets, including, without limitation, termination of the Asset Management Agreement for the Development Asset commonly known as the Hartford Hilton;

WHEREAS, the parties to the Contribution Agreement desire to effectuate a transfer of the obligation to employ all Employees from the Lessee Company Affiliates to the Manager with respect to each Property (the “Employee Transfer”) and to amend certain provisions of the Management Agreements and Lease Agreements as a result thereof; and

WHEREAS, the parties to the Contribution Agreement wish to amend the Contribution Agreement as set forth herein.

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

Capitalized terms used but not defined herein shall have the respective meanings set forth in the Contribution Agreement.

1 Amendments

1.1           Outside Closing Date with Respect to Deferred Properties. Notwithstanding anything to the contrary contained in Section 14.2, the “Deferred Property Outside Closing Date” with respect to the Hartford Marriott shall mean February 15, 2006. For the purposes of Section 17.1 of the Contribution Agreement, the “Outside Closing Date” with respect to the Hartford Marriott shall mean the Deferred Property Outside Closing Date.

1.2 Amendments Related to Equity Restructuring.

1.2.1        All references to fifty percent (50%) contained in Sections 3.1, 3.3, 3.4, 3.5, 12.3 and 17.1 of the Contribution Agreement are hereby modified to refer to (A) with respect to the Development Asset commonly known as the Hartford Hilton, ten percent (10%) for Investor and ninety percent (90%) for Contributor and (B) with respect to the Development Asset commonly known as the Hartford Marriott, fifteen percent (15%) for Investor and eighty-five percent (85%) for Contributor.

1.2.2        All references to 57.96% and 42.04% contained in Sections 3.3 and 17.1 are hereby modified to refer to 39.2% and 60.8%, respectively.

1.2.3        A new Section 6.6.4 is hereby added after Section 6.6.3 of the Contribution Agreement as follows:

Adjustments and prorations with respect to the Hartford Marriott

shall be made in accordance with this Article in order to retroactively effect the Equity Restructuring such that the credits and debits set forth on the Closing Statement for the Development Asset commonly known as the Hartford Marriott sets forth payments of costs and Cash Payments (including those previously made with respect to the Development Asset commonly known as the Hartford Hilton) in accordance with the revised percentage of the Contribution Value attributable to the Development Assets to be reflected in Investor’s initial Capital Account in the Company and the revised percentage of costs for which Investor is responsible as set forth in this Sixth Amendment.

1.2.4        The following new sections are hereby added after Section 8.30 of the Contribution Agreement as follows:

“Section 8.31. Tax Fixing Agreement.

2

(a)The Tax Assessment Fixing Agreement, dated August 25, 2000, between the City of Hartford and Waterford Development, LLC and recorded in Volume 4847 at Page 105 of the Hartford Land Records, as subsequently assigned pursuant to that certain Assignment and Assumption Agreement, dated September 11, 2003, by and between Waterford Development, LLC, as assignor, and Adriaen’s Landing Hotel, LLC (“ALH”), as assignee, and recorded in Volume 4858 at Page 197 of the Hartford Land Records (the “Tax Fixing Agreement”) is in full force and effect, and no default or breach has occurred thereunder.

(b)Contributor has provided to Investor a true, complete and correct copy of the Tax Fixing Agreement as in effect as of the date hereof.

8.32.        Material Contracts. Schedule 8.32 sets forth a complete list of all material contracts, obligations, undertakings, agreements, guaranties, leases, mortgages, licenses or other agreements or commitments to which ALH is a party or is bound or is otherwise related to the Hartford Marriott (each, a “Material Contract”). Contributor has provided Investor with true and complete copies of all Material Contracts, and (i) there are no disputes pursuant to any Material Contracts that have not been previously disclosed to Investor, (ii) all such Material Contracts are in full force and effect and (iii) ALH is in compliance with its material obligations under all such Material Contracts. Investor acknowledges receipt of copies of all Material Contracts from Contributor.

8.33         Disclosure.

(a)Neither this Agreement nor any Schedule or Exhibit nor any certificate or other document, report or other materials and information furnished to Investor by Contributor or its Affiliates or representatives in connection with the Equity Restructuring and the Closing with respect to the Hartford Marriott contains any untrue statement of a material fact or fails to state a material fact necessary in order to make the statements contained therein or herein, in light of the circumstances under which they were made, not misleading.

(b)Contributor has provided Investor with all material documents, reports or other materials and information relating to the Hartford Marriott or to which ALH is party or is otherwise bound.

1.2.5        A new Section 14.1.8 is hereby added after Section 14.1.7 as follows:

With respect to the Hartford Marriott and ALH, the Existing Debt in the amount of eight million dollars ($8,000,000) pursuant to a loan to ALH from the City of Hartford shall have been fully and finally defeased at the expense of the Contributor.

1.2.6        A new Section 14.1.9 is hereby added after Section 14.1.8 as follows:

3

There shall not have occurred any condition, circumstance, change, event or effect that is known to or reasonably should have been known to Contributor, which is or is reasonably likely to be materially adverse to (a) the assets, properties, financial condition or results of operations of ALH or the Hartford Marriott or (b) the ability of Contributor to consummate this Agreement or any of the transactions contemplated hereby, except for any such condition, circumstance, change, event or effect to the extent resulting from or arising out of (y) changes or developments in financial, or securities markets or the economy in general or as a result of the outbreak of war or hostilities against the United States or (z) the announcement, negotiation, execution, delivery, or consummation of the transactions contemplated by, or compliance with, this Agreement.

1.2.7        A new Section 14.2.5 is hereby added after Section 14.2.4 as follows:

As a condition to Contributor’s obligations with regard to the Equity Structuring in respect of the Hartford Hilton, the Closing with respect to the Hartford Marriott shall have occurred on or prior to the date on which the Closing of the Equity Restructuring in respect of the Hartford Hilton occurs.

1.2.8        A new Section 15.8 is hereby added after Section 15.7 of the Contribution Agreement as follows:

During the term of this Agreement and subsequent to the Closing with respect to the Development Asset commonly known as the Hartford Marriott, Contributor and Investor hereby agree to cooperate in good faith to (i) negotiate, execute and deliver amendments, modifications, supplements, terminations and other changes to any and all documents executed and delivered at previous portions of the Closing under this Agreement that may be implicated by the Equity Restructuring and the Employee Transfer, including, without limitation, amendments to the Management Agreements, the Leases, the LLC Agreement and the Lessee LLC Agreement and a termination of the Asset Management Agreement with respect to the Development Asset commonly known as the Hartford Hilton and (ii) obtain any consents and authorizations to the foregoing as determined to be necessary by Contributor and Investor in their reasonable discretion.

1.3Amendments Related to Employee Transfer.

1.3.1        Section 6.1.11 of the Contribution Agreement is hereby deleted in its entirety and replaced with the following as a new Section 6.1.11:

All salaries and benefits of employees whose employment is assumed by the Company or the Manager pursuant to Section 8.15 hereof shall be prorated.

1.3.2        The first sentence of Section 8.15 of the Contribution Agreement is hereby deleted in its entirety and replaced with the following:

4

At the Closing, the Manager shall hire all persons then employed by the Contributor or any Owner Entity in connection with the management, operation or maintenance of the Properties (collectively, the “Employees”).

2   Reference to and Effect on the Contribution Agreement.

2.1Upon the due execution and delivery of this Sixth Amendment by the parties hereto, on and after the date hereof each reference in the Contribution Agreement to “this Agreement”, “hereunder”, “hereof” and “herein” and the like shall mean and be a reference to the Contribution Agreement, as amended hereby.

2.2Except as specifically amended above, the Contribution Agreement shall remain in full force and effect and is hereby ratified and confirmed.

2.3The execution, delivery, and effectiveness of this Sixth Amendment shall be limited precisely as written and, except as expressly provided herein, shall not be deemed to (i) be a consent to any waiver or modification of any other term or condition of the Contribution Agreement or any of the instruments or documents referred to therein or (ii) create, or be evidence of, alone or taken with any consent to, waiver or modification of, or other amendment of the provisions of the Contribution Agreement or any of the instruments or documents referred to therein, a course of conduct.

2.4The representations and warranties made in the Contribution Agreement with respect to the Hartford Marriott as amended hereby are true and correct as of the date hereof.

3             Governing Law. THIS SIXTH AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW.

4  Counterparts. This Sixth Amendment may be executed in counterparts, each of which when so executed and delivered shall be deemed an original and all of which together shall constitute one and the same instrument.

[SIGNATURE PAGE FOLLOWS]

5

IN WITNESS WHEREOF, a duly authorized officer of each of Contributor, Investor and Escrow Agent have executed this Sixth Amendment as of the day and year first above written.

CONTRIBUTOR:
WATERFORD HOSPITALITY GROUP, LLC
By:	Slavik Suites, Inc., its member
	By:
		Name: Del Lauria
		Title: Vice President
	By:	LMW Investments, Inc., its member
	By:
		Name: Len Wolman
		Title: President
By:	MYSTIC HOTEL INVESTORS, LLC
	By:
		Name:
		Title: Authorized Representative
INVESTOR:
HERSHA HOSPITALITY LIMITED PARTNERSHIP
By:	Hersha Hospitability Trust, its general partner
	By:
		Name:
		Title:

6

ESCROW AGENT:
FIRST AMERICAN TITLE INSURANCE COMPANY
By:
	Name:
	Title:

7

SCHEDULE 8.32

Material Contracts

DESCRIPTION	VENDOR/ PARTY
Helms Briscoe	Helms Briscoe
Music	Muzak
Laundry Service	Atlantic City Linen
	MZ Cleaners & Tailors
Extermination/Pest	Terminix
Kitchen Equipment	Suiza Foods
	Tri-State Malted Waffles
	Coca Cola - 265060
	Coca Cola - 265061
Internet	IBahn
Telephone System Services	SBC
	IMR Capital
	NTP
	Paetex
	Xeta
	Shared Technologies
Refuse Removal	Waste Management
Pool Maintenance	ECOLAB
ATM Service	ATM Systems
Gift Cards	Givex
Audio/Visual	PSAV
Advertising Agreement	Herring Media
Television/ Videos	OnCommand
Point of Sale Systems	Micros

LEASES / LICENSES

UPS Store	Shipping Services II, LLC
Starbucks License	Starbucks
Parking Agreement	LAZ
Car Rental	Hertz
Parking (for hotel employees)	CL&P Charter Oak Square
Energy Services Agreement	CUP Agreement with CCEDA

8

Marriott Hotel License (Franchise Agreement)Marriott International, Inc.

DEVELOPMENT / PROJECT RELATED AGREEMENTS

Hotel Site Lease	CCEDA
AirSpace Lease	CCEDA / OPM
Development Agreement	CCEDA / OPM
Declaration of Covenants	CCEDA / OPM
Perini Contract	Perini Building Corp
Tax Assessment Fixing Agreement and Assignment and Assumption of Tax Assessment Fixing Agreement	City of Hartford/Waterford Development, LLC
**City of Hartford/HUD Loan Documents	HUD/City of Hartford
Hotel Management Agreement	Waterford Hotel Group, Inc.

Sales & Use Tax Relief Program Implementing AgreementConnecticut Development Authority

Name License AgreementOPM

** List of City of Hartford Loan Documents is attached as Exhibit A. Please note that the City of Hartford/HUD funded loan will be defeased on or before the Hartford Marriott closing.

9

Exhibit A

List of City of Hartford Loan Documents

1.Substitute Promissory Note dated September 26, 2003 in the principal amount of $8,000,000 from ALH in favor of the City;

2.Loan Agreement dated September 26, 2003 between ALH and the City;

3.Environmental Indemnity Agreement dated September 26, 2003 by ALH and Mystic in favor of the City;

4.Collateral Assignment and Security Agreement in Respect of Contracts, Licenses and Permits dated September 26, 2003 from ALH to the City;

5.UCC-1 Financing Statement filed against ALH in favor of the City;

6.Guaranty dated September 26, 2003 from Mystic to the City;

7.Collateral Assignment and Subordination of Management Agreement dated September 26, 2003 between ALH and the City;

8.Open-End Construction Leasehold Mortgage Deed dated September 26, 2003 from ALH to the City.

9.Standstill and Subordination Agreement dated September 26, 2003 by and among the City, ALH, People’s Bank and BankNorth, N.A..

10.         Collateral Assignment of Leases and Rents dated September 26, 2003 by ALH in favor of the City.

10

EX-10.6

Exhibit 10.6

SECOND AMENDMENT TO

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

OF MYSTIC PARTNERS, LLC

This Second Amendment to Limited Liability Company Operating Agreement (this "Amendment") of MYSTIC PARTNERS, LLC (the "Company"), is dated as of February __, 2006 and entered into by and among the following:

Name	Current Address
Mystic Hotel Investors, LLC	Post Office Box 715
(a Delaware limited liability company)	914 Hartford Turnpike
	Waterford, CT 06385
Hersha Hospitality Limited Partnership	5 10 Walnut Street, 9th Floor
(a Virginia limited partnership)	Philadelphia, PA 19106

hereinafter collectively, the "Members".

WITNE  ;SSETH:

WHEREAS, the Company was formed pursuant to a Certificate of Formation filed with the Delaware Secretary of State on June 15, 2005 and by execution of a Limited Liability Company Operating Agreement on August 9, 2005, as amended by the First Amendment to Limited Liability Company Operating Agreement, dated September 30, 2005 (the "LLC Agreement"); capitalized terms used herein but not otherwise defined shall have the meanings set forth for such terms in the LLC Agreement; and

WHEREAS, the Members desire to restructure the capital sharing ratios and related equity and cost sharing mechanisms with respect to the Development Assets (the "Equity Restructuring") contained in the LLC Agreement to reflect the Equity Restructuring;

WHEREAS, pursuant to Section 3.2.2 of the LLC Agreement, the Members have agreed to amend certain provisions of the LLC Agreement upon the occurrence of any contribution of a Deferred Property; and

WHEREAS, the Members hereby desire to amend the LLC Agreement as set forth herein as follows:

1. Exhibits A, 1.1 and 1.2 of the LLC Agreement are hereby deleted in their entirety and replaced with Exhibits A, 1.1 and 1.2 attached hereto and made a part hereof. All references to Exhibits A, 1.1 and 1.2 in the LLC Agreement shall be deemed to refer to the replacements of same attached hereto.

2. The Definition of Capital Sharing Ratio is hereby amended such that Investor Class B Member shall have a 15% interest with respect to the Hartford Marriott and a 10% interest with respect to the Hartford Hilton and such that Mystic Member shall have a 85% interest with respect to the Hartford Marriott and a 90% interest with respect to the Hartford Hilton.

3. The definition of Contribution Agreement is hereby amended such that after the words "August 8, 2005,", the following text shall appear:

(A) Fourth Amendment to Membership Interests Contribution Agreement dated as of September 15, 2005, a Fifth Amendment to Membership Interests Contribution Agreement dated as of November 1, 2005, and a Sixth Amendment to Membership Interests Contribution Agreement dated as of February___, 2006, and as further amended, modified or supplemented from time to time.

4. The definition of Residual Sharing Ratios is hereby amended such that Investor Class A Member shall have 0% with respect to Hartford Hilton and 0% with respect to the Hartford Marriott, Investor Class B Member shall have 7% with respect to the Hartford Hilton and 10.5% with respect to the Hartford Marriott and Mystic Member shall have 93% with respect to the Hartford Hilton and 89.5% with respect to the Hartford Marriott.

5. Section 3.2.2 is hereby amended such that subclause (A) is hereby deleted and replaced in its entirety with the following text:

(A) Mystic Member shall transfer all of its interests in the applicable Deferred Property to the Company (which shall be the percentage of the outstanding interests in the Deferred Property as shown on Exhibit A), free and clear of any and all Encumbrances and with a net fair market value to be credited as a Capital Contribution equal to (i) 90% with respect to the Hartford Hilton, (ii) 85% with respect to the Hartford Marriott and (iii) 33.3% with respect to the remainder of the Deferred Property, in each case, of the adjusted Contribution Value (as defined in the Contribution Agreement) attributable to the Hartford Hilton, the Hartford Marriott and the other applicable Deferred Property, respectively (after giving effect to payments made to Mystic Member in accordance with the Contribution Agreement);

6. Section 4.5.1 is hereby amended such that the words "at the rate of 50% Investor Member participation/50% Mystic Member participation, in the case of a Competitive Venture located within five miles of a Development Asset" is deleted and replaced with the words "at the rate of 10% Investor Member participation/90% Mystic Member participation, in the case of a Competitive Venture located within five miles of the Hartford Hilton and the rate of 15% Investor Member participation/85% Mystic Member participation, in the case of a Competitive Venture located within five miles of the Hartford Marriott".

7. Section 4.5.1 is hereby amended such that the last sentence thereof is deleted and replaced with the following text:

If the proposed Competitive Venture is within five miles of both a Stabilized Asset and a Development Asset or within five miles of both the Hartford Marriott and the Hartford Hilton, the participation percentage shall be determined by the nearest asset.

2

8. Section 4.10 is hereby amended such that the words "0.25% of Operating Revenues, with respect to the Development Assets" are hereby deleted and replaced with the words "0.25% of Operating Revenues, with respect to the Hartford Marriott".

9. The definition of Distributable Funds set forth in Section 5.2.1 is hereby deleted in its entirety and replaced with the following text:

"Distributable Funds" shall mean (a) with respect to Investor Member, the sum of (i) 100% of the Net Cash Flow on hand (after repayment of any outstanding Member Loans) in respect of Stabilized Assets, plus (ii) 10% of the Net Cash Flow on hand (after repayment of any outstanding Member Loans) in respect of the Hartford Hilton, plus (iii) 15% of the Net Cash Flow on hand (after repayment of any outstanding Member Loans) in respect of the Hartford Marriott, plus (iv) Capital Proceeds actually received and (b) with respect to Mystic Member, the sum of (i) 100% of the Net Cash Flow on hand (after repayment of any outstanding Member Loans) in respect of Stabilized Assets, plus (ii) 90% of the Net Cash Flow on hand (after repayment of any outstanding Member Loans) in respect of the Hartford Hilton, plus (iii) 85% of the Net Cash Flow on hand (after repayment of any outstanding Member Loans) in respect of the Hartford Marriott, plus (iv) Capital Proceeds actually received. Attached hereto as Exhibit B for illustrative purposes is a hypothetical calculation of Distributable Funds.

10. The following text is hereby added as a new Section 15:

15.1 Investor Member Option. Mystic Member hereby grants to Investor Member the option (the "Option") to purchase up to 50% (in the aggregate, which 50% maximum percentage interest shall include Investor Member's percentage interest in the Company as evidenced by its Capital Sharing Ratio as of each of the Option Exercise Dates (as defined below)) of Mystic Member's interest in the Development Asset Entity that own each of the Hartford Hilton ("Hartford Hilton Owner") and the Hartford Marriott ("Hartford Marriott Owner"), respectively. Investor Member shall have the right to close on the purchase of additional percentage interests acquired pursuant to the Option only on either December 29, 2006 or December 31, 2007 (collectively, the "Option Purchase Dates") and on no other date. The Option shall expire on the occurrence of the Option Purchase Dates. Investor Member may exercise the Option in any increment of 10%. The amount of the percentage interest desired to be purchased by Investor Member as of the applicable Option Purchase Date in either the Hartford Marriott or the Hartford Hilton shall herein be referred to as the "Additional Percentage Interest".

15.2 Option Price. The price for Investor Member's acquisition of a percentage interest in Hartford Hilton Owner (the "Hilton Option Price") shall equal the sum of (a) the product obtained by multiplying (i) the Contribution Value of the Hartford Hilton as set forth in the Contribution Agreement by (ii) the Additional Percentage Interest plus (b) the product obtained by multiplying (i) all operational funding (i.e. capital calls to fund operational shortfalls) and capital expenditures incurred by Hartford Hilton Owner from the period since the acquisition by the Company of the interests in Hartford Hilton Owner to the applicable Option Purchase Date by (ii) the Additional Percentage Interest plus (c) the product obtained by multiplying (i) 10% by (ii) the sum of (a) plus (b). The price for Investor Member's acquisition of the Additional Percentage Interest in Hartford Marriott Owner (the "Marriott Option Price") shall equal the sum of (x) the product obtained by multiplying (i) the total amount of actual costs incurred in the construction and development of the Hartford Marriott (as of the date hereof, the Members hereby acknowledge and agree that such costs are estimated to be approximately $94,000,000) by (ii) the Additional Percentage Interest plus (y) the product obtained by multiplying (i) all operational funding (i.e. capital calls to fund operational shortfalls) and capital expenditures incurred by Hartford Marriott Owner from the period since the acquisition by the Company of the interests in Hartford Hilton Owner to the applicable Option Purchase Date by (ii) the Additional Percentage Interest plus (z) the product obtained by multiplying (i) 10% by (i) the sum of (x) plus (y).

3

15.3 Exercise of the Option. In the event that Investor Member desires to exercise the Option, Investor Member shall provide written notice of such desire (an "Option Notice") to Mystic Member on or prior to October 1, 2006 at 6:00 p.m., New York time (the "First Option Exercise Date") with respect to the Option Purchase Date occurring on December 29, 2006 and October 1, 2007 at 6:00 p.m., New York time (the "Second Option Exercise Date", together with the First Option Exercise Date, the "Option Exercise Dates") with respect to the Option Purchase Date occurring on December 31, 2007. The Option Notice shall include Investor Member's desired Additional Percentage Interest with respect to the Hartford Hilton and the Hartford Marriott, as applicable. Within ten days after Mystic Member's receipt of the Option Notice, Mystic Member shall notify Investor Member in writing of the Hilton Option Price and the Marriott Option Price, as applicable. In the event that Investor Member and Mystic Member do not agree on the calculation of the Option Price, Investor Member and Mystic Member shall negotiate the Option Price in good faith. Section 6 of the Contribution Agreement shall govern the calculation of all prorations and post closing adjustments necessary in connection with Investor Member's exercise of the Option.

15.4 Closing of the Purchase of the Additional Percentage Interest. The parties shall agree on a mutually acceptable location at which to close on Investor Member's purchase of the Additional Percentage Interests (which may be by mail). On each of the Option Purchase Dates, as applicable, the parties shall do the following:

15.4.1Execute and deliver an amendment to the LLC Agreement evidencing revised Capital Sharing Ratios and Residual Sharing Ratios (which shall be determined in the same manner as prior to the date hereof) of Investor Member and Mystic Member reflecting Investor Member's acquisition of the Additional Percentage Interests for the Hartford Hilton and/or the Hartford Marriott, as the case may be;

15.4.2Investor Member shall pay the Hilton Option Price and/or the Marriott Option Price, as the case may be;

15.4.3The parties shall calculate the prorations and deliver a Settlement Statement in accordance with the procedures set forth in the Contribution Agreement.

11. All references to Waterford Class Member contained in the LLC Agreement shall be modified to be references to Mystic Member.

4

12. As specifically modified hereby, the LLC Agreement shall remain in full force and effect and is hereby ratified and confirmed. All references to the LLC Agreement shall mean and refer to the LLC Agreement as amended and modified hereby.

13. This Amendment may be executed in one or more counterparts, and all such counterparts shall together constitute the same agreement.

13. This Amendment shall be construed and interpreted according to the laws of the State of Delaware. Accordingly, all questions with respect to construction of this Amendment and the rights and liabilities of the parties shall be determined in accordance with the applicable provisions of the laws of the State of Delaware and this Amendment is intended to be performed in accordance with and only to the extent permitted by all applicable laws, ordinances, rules and regulations of such State. In the event that there is a direct conflict between the provisions of Delaware law and the provisions of any other jurisdiction applicable to a particular transaction, the laws of Delaware shall nevertheless apply except and to the extent that such interpretation or application would render the action or proposed action of the Company to be invalid or illegal, in which event, the law of the jurisdiction of the State or country which would be applicable under general rules regarding conflict of laws or rules of comity shall apply.

[SIGNATURE PAGE FOLLOWS]

5

IN WITNESS WHEREOF, the Members have caused this Amendment to be duly executed by their respective and duly authorized representatives as of the date first above written.

MEMBERS:
HERSHA HOSPITALITY LIMITED PARTNERSHIP
BY	/s/ Ashish Parikh
Name:	Ashish R. Parikh
Title:	CFO
MYSTIC HOTEL INVESTORS, LLC
By:
Name:
Title:	Authorized Representative

IN WITNESS WHEREOF, the Members have caused this Amendment to be duly executed by their respective and duly authorized representatives as of the date first above written.

MEMBERS:
HERSHA HOSPITALITY LIMITED PARTNERSHIP
By:
Name:
Title:
MYSTIC HOTEL INVESTORS, LLC
By:	/s/ G Jette
Name:	Glen A. Jette
Title:	Authorized Representative

EXHIBIT 1.1

MEMBERSHIP INTERESTS AND OWNER ENTITIES

MEMBERSHIP INTERESTS AND OWNER ENTITIES

Property	Ownership
1 . Residence Inn Southington 778 West St. Southington, CT 06489	Southington Suites, LLC, composed of: 67% Mystic Hotel Investors, LLC 33% Minority Interests
2. Dunkin Donuts 790 West St. Southington, CT 06489	790 West Street LLC, composed of: 67% Mystic Hotel Investors, LLC 33% Minority Interests
3. Residence Inn by Marriott 22 Segar St. Danbury, CT 06810	Danbury Suites, LLC, composed of: 100% Mystic Hotel Investors, LLC
4. Mystic Marriott Hotel and Spa 625 North Road Groton, CT 06320	Exit 88 Hotel, LLC composed of: 99.9% Mystic Hotel Investors, LLC 0.10% Mystic Hotel Investors Remote Entity Incorporated
5. Courtyard Hotel Warwick 55 Jefferson Park Road Warwick, RI 02888	Warwick Lodgings, LLC, composed of: 100% Mystic Hotel Investors, LLC
6. Courtyard by Marriott and Rosemont Suites 181 West Town St. Norwich, CT 06360	Norwich Hotel, LLC, composed of: 100% Mystic Hotel Investors, LLC
7. Springhill Suites by Marriott 40 1 North Frontage Road Waterford, CT 06385	Waterford Suites, LLC, composed of: 100% Mystic Hotel Investors, LLC
8. Residence Inn by Marriott and Whitehall Mansion 40-42 Whitehall Avenue Mystic, CT 06355	Whitehall Mansion Partners, LLC 100% Mystic Hotel Investors, LLC
9. Hartford Hilton 315 Trumbull Street Hartford, CT 06103	3 1 5 Trumbull Street Associates, LLC, composed of: 88% Mystic Hotel Investors, LLC 12% Minority Interests
10. Hartford Marriott Columbus Blvd. Hartford, CT 06106	Adriaen's Landing Hotel, LLC, composed of: 95.66155% Mystic Hotel Investors, LLC 4.33845% Minority Interests

EXHIBIT 1.2

DESCRIPTION OF PROPERTY

(see attached)

Exhibit A

Members, Capital Contributions,

And Capital Sharing Ratios

Name and Address of Members	Cash Contribution	Gross Fair Market Value of Contributed Property	Less Debt Assumed or Taken Subject to by Company	Net Agreed Value of Contributed Property	Capital Sharing Ratio
Mystic Hotel Investors, LLC	$1,789,385	$120,864,548	$67,542,820	$53,321,728	33.3% with respect to Stabilized Assets
Mystic Hotel Investors, LLC	$567,557	$31,072,620	$18,678,125	$12,394,495	50% with respect to Development Assets
Hersha Hospitality Limited Partnership	$39,149,738	$0	$0	$0	66.7% with respect to Stabilized Assets
Hersha Hospitality Limited Partnership	$6,764,805	$0	$0	$0	50% with respect to Development Assets

EXHIBIT A - CONTINUED

The Contribution Value of the contributed property is allocated among the various Properties as follows:

	Cash Contributed by Investor Member		Cash Contributed by Waterford Member		Gross FMV of Contributed Prop		(Less Debt)		Net Agreed Value of Prop
Courtyard by Marriott &	(working cap)	33,350	(working cap)	16,650	12,660,090		7,269,605		5,390,485
Rosemont Suites, Norwich, CT	(shared costs)	389,960	(shared costs)	194,688
(Norwich Hotel, LLC)		3,595,453
Springfield Suites by Marriott,	(working cap)	33,350	(working cap)	16,650	8,049,269		6,191,340		1,857,929
Waterford, CT (Waterford	(shared costs)	254,446	(shared costs)	127,032
Suites, LLC)		1,239,239
Residence Inn by Marriott,	(working cap)	50,025	(working cap)	24,975	9,099,530		7,198,757		1,900,773
Danbury, CT (Danbury Suites,	(shared costs)	887,837	(shared costs)	443,253
LLC)		1,267,815
Courtyard Hotel, Warwick, RI	(working cap)	33,350	(working cap)	16,650	9,094,108		6,247,403		2,846,705
(Warwick Lodgings, LLC)	(shared costs)	230,971	(shared costs)	115,312
		1,898,752
Residence Inn by Marriott,	(shared costs)	234, 678	(shared costs)	117,163	9,259,089	1	7,298,305	1	1,960,784
Southington, CT (Southington		1,307,844
Suites, LLC)
Mystic Marriott Hotel & Spa,	(working cap)	590,979	(working cap)	295,046	54,658,165		25,330,607		29,327,558
Groton, CT (Exit 88 Hotel,	(shared costs)	401,215	(shared costs)	200,306
LLC)		19,561,481
Dunkin Donuts, 790 West St.,	Combined with Residence Inn by Marriott, Southington, CT
Southington, CT (790 West
Street LLC)
Residence Inn by Marriott and	(working cap)	166,750	(working cap)	83,250	18,044,297		8,006,803		10,037,494
Whitehall Mansion (Whitehall	(shared costs)	277,235	(shared costs)	138,410
Mansion Partners, LLC)		6,695,008
Hartford Hilton (315 Trumbull	(working cap)	264,000	(working cap)	264,000	31,072,620	1	18,678,125	1	12,394,495
Street Associates, LLC)	(shared costs)	303,557	(shared costs)	303,557
		6,197,248
Hartford Marriott (Adriaen's	(working cap)	121,968	(working cap)	691,155	83,369,041	1	42,948,478		40,420,563
Landing Hotel, LLC)	(shared costs)	[6,063,084]	(shared costs)	[64,089]
TOTAL:		$45,914,543		$2,356,942	$151,937,168				$65,716,223

__________________________

¹ Adjusted to take into account Minority Interests.

Exhibit B

Mystic Partners, LLC

Second Amendment to the LLC Agreement - Distributable Funds Exhibit

December 31, 20XX

	NET OPERATING INCOME			LESS: DEBT PRINCIPAL AND INTEREST			NET CASH FLOW			MYSTIC PARTNERS PERCENTAGE INTEREST		MYSTIC PARTNERS NET CASH FLOW			INVESTOR MEMBER DISTRIBUTABLE FUNDS			MYSTIC MEMBER DISTRIBUTABLE FUNDS
Norwich Hotel, LLC	$	1,130,000		$	(536,809	)	$	593,191			100%	$	593,191		$	593,191		$
Waterford Suites, LLC		675,000			(361,775	)		313,225			100%		313,225			313,225			-
Exit 88 Hotel, LLC		4,125,000			(2,981,360	)		1,143,640			100%		1,143,640			1,143,640			-
Southington Suites, LLC and 790 West Street, L		1,150,000			(625,325	)		524,675			67%		351,532			351,532			-
Warwick Lodgings, LLC		810,000			(368,342	)		441,658			100%		441,658			441,658			-
Danbury Suites, LLC		925,000			(459,714	)		465,286			100%		465,286			465,286			-
Whitehall Mansion Partners, LLC		1,450,000			(688,581	)		761,419			100%		761,419			761,419			-
		10,265,000			(6,021,906	)		4,243,094					4,069,951			4,069,951			414,951
315 Trumbull Street Associates, LLC		635,012			(1,544,103	)		(909,091	)		88%		(800,000	)		(80,000	)		(720,000	)
Adriaen's Landing Hotel, LLC		4,712,359			(3,149,859	)		1,562,500			96%		1,500,000			225,000			1 ,275,000
		5,347,371			(4,693,962	)		653,409					700,000			145,000			555,000
Parent company expenses		(400,000	)		-			(400,000	)		100%		(400,000	)		(400,000	)		-
	$	15,212,371		$	(10,715,868	)	$	4,496,503				$	4,369,951			3,814,951			969,951
Less: Preferential return payments																(3,400,000	)		(969,951	)

EX-10.7

Exhibit 10.7

FIRST AMENDMENT TO

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

OF MYSTIC PARTNERS LEASECO, LLC

This First Amendment to Limited Liability Company Operating Agreement (this “Amendment”) of MYSTIC PARTNERS LEASECO, LLC (the “Company”), is dated as of February 8, 2006 and entered into by and among the following:

Name	Current Address
Mystic Hotel Investors, LLC (a Delaware limited liability company)	Post Office Box 715 914 Hartford Turnpike Waterford, CT 06385
Hersha Hospitality Limited Partnership (a Virginia limited partnership)	510 Walnut Street, 9th Floor Philadelphia, PA 19106

hereinafter collectively, the “Members”.

W I T N E S S E T H:

WHEREAS, the Company was formed pursuant to a Certificate of Formation filed with the Delaware Secretary of State on June 24, 2005 and by execution of a Limited Liability Company Operating Agreement on August 9, 2005 (the “LLC Agreement”); capitalized terms used herein but not otherwise defined shall have the meanings set forth for such terms in the LLC Agreement; and

WHEREAS, the Members desire to restructure the capital sharing ratios and related equity and cost sharing mechanisms with respect to the Development Assets (the “Equity Restructuring”) contained in the LLC Agreement to reflect the Equity Restructuring;

WHEREAS, the Members hereby desire to amend the LLC Agreement as set forth herein as follows:

1.            The Definition of Capital Sharing Ratio is hereby amended such that TRS Class B Member shall have a 15% interest with respect to the Hartford Marriott and a 10% interest with respect to the Hartford Hilton and such that Mystic Member shall have an 85% interest with respect to the Hartford Marriott and a 90% interest with respect to the Hartford Hilton.

2.            The definition of Residual Sharing Ratios is hereby amended such that TRS Class A Member shall have 0% with respect to Hartford Hilton and 0% with respect to the Hartford Marriott, TRS Class B Member shall have 7% with respect to the Hartford Hilton and 10.5% with respect to the Hartford Marriott and Mystic Class Member shall have 93% with respect to the Hartford Hilton and 89.5% with respect to the Hartford Marriott.

3.            The reference to Article 14 in Section 4.2.1(D) shall be amended to refer to Article 13.

4.             The definition of Distributable Funds set forth in Section 5.2.1 is hereby deleted in its entirety and replaced with the following text:

“Distributable Funds” shall mean (a) with respect to TRS Member, the sum of (i) 100% of the Net Cash Flow on hand (after repayment of any outstanding Member Loans) in respect of Stabilized Assets, plus (ii) 10% of the Net Cash Flow on hand (after repayment of any outstanding Member Loans) in respect of the Hartford Hilton, plus (iii) 15% of the Net Cash Flow on hand (after repayment of any outstanding Member Loans) in respect of the Hartford Marriott, plus (iv) Capital Proceeds actually received and (b) with respect to Mystic Member, the sum of (i) 100% of the Net Cash Flow on hand (after repayment of any outstanding Member Loans) in respect of Stabilized Assets, plus (ii) 90% of the Net Cash Flow on hand (after repayment of any outstanding Member Loans) in respect of the Hartford Hilton, plus (iii) 85% of the Net Cash Flow on hand (after repayment of any outstanding Member Loans) in respect of the Hartford Marriott, plus (iv) Capital Proceeds actually received. Attached hereto as Exhibit A for illustrative purposes is a hypothetical calculation of Distributable Funds.

5.             The following text is hereby added as a new Article 14:

14.1        TRS Member Option. Mystic Member hereby grants to TRS Member the option (the “Option”) to purchase up to 50% (in the aggregate, which 50% maximum percentage interest shall include TRS Member’s percentage interest in the Company as evidenced by its Capital Sharing Ratio as of each of the Option Exercise Dates (as defined below)) of Mystic Member’s interest in the entities that own each of the Hartford Hilton (“Hartford Hilton Owner”) and the Hartford Marriott (“Hartford Marriott Owner”), respectively. TRS Member shall have the right to close on the purchase of additional percentage interests acquired pursuant to the Option only on either December 29, 2006 or December 31, 2007 (collectively, the “Option Purchase Dates”) and on no other date. The Option shall expire on the occurrence of the Option Purchase Dates. TRS Member may exercise the Option in any increment of 10%. The amount of the percentage interest desired to be purchased by TRS Member as of the applicable Option Purchase Date in either the Hartford Marriott or the Hartford Hilton shall herein be referred to as the “Additional Percentage Interest”.

14.2        Option Price. The price for TRS Member’s acquisition of a percentage interest in Hartford Hilton Owner (the “Hilton Option Price”) shall equal the sum of (a) the product obtained by multiplying (i) the Contribution Value of the Hartford Hilton as set forth in the Contribution Agreement by (ii) the Additional Percentage Interest plus (b) the product obtained by multiplying (i) all operational funding (i.e. capital calls to fund operational shortfalls) and capital expenditures incurred by Hartford Hilton Owner from the period since the acquisition by the Company of the interests in Hartford Hilton Owner to the applicable Option Purchase Dateby (ii) the Additional Percentage Interest plus (c) the product obtained by multiplying (i) 10% by (ii) the sum of (a) plus (b). The price for TRS Member’s acquisition of the Additional Percentage Interest in Hartford Marriott Owner (the “Marriott Option Price”) shall equal the sum of (x) the product obtained by multiplying (i) the total amount of actual costs incurred in the construction and development of the Hartford Marriott (as of the date hereof, the Members hereby acknowledge and agree that such costs are estimated to be approximately $94,000,000) by (ii) the Additional Percentage Interest plus (y) the product obtained by multiplying (i) all operational funding (i.e. capital calls to fund operational shortfalls) and capital expenditures incurred by Hartford Marriott Ownerfrom the period since the acquisition by the Company of the interests in Hartford Hilton Owner to the applicable Option Purchase Dateby (ii) the Additional Percentage Interest plus (z) the product obtained by multiplying (i) 10% by (i) the sum of (x) plus (y).

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     14.3         Exercise of the Option. In the event that TRS Member desires to exercise the Option, TRS Member shall provide written notice of such desire (an “Option Notice”) to Mystic Member on or prior to October 1, 2006 at 6:00 p.m., New York time (the “First Option Exercise Date”) with respect to the Option Purchase Date occurring on December 29, 2006 and October 1, 2007 at 6:00 p.m., New York time (the “Second Option Exercise Date”, together with the First Option Exercise Date, the “Option Exercise Dates”) with respect to the Option Purchase Date occurring on December 31, 2007. The Option Notice shall include TRS Member’s desired Additional Percentage Interest with respect to the Hartford Hilton and the Hartford Marriott, as applicable. Within ten days after Mystic Member’s receipt of the Option Notice, Mystic Member shall notify TRS Member in writing of the Hilton Option Price and the Marriott Option Price, as applicable. In the event that TRS Member and Mystic Member do not agree on the calculation of the Option Price, TRS Member and Mystic Member shall negotiate the Option Price in good faith. Section 6 of the Contribution Agreement between TRS Member and Mystic Member (as amended) shall govern the calculation of all prorations and post closing adjustments necessary in connection with TRS Member’s exercise of the Option.

14.4         Closing of the Purchase of the Additional Percentage Interest. The parties shall agree on a mutually acceptable location at which to close on TRS Member’s purchase of the Additional Percentage Interests (which may be by mail). On each of the Option Purchase Dates, as applicable, the parties shall do the following:

14.4.1    Execute and deliver an amendment to the LLC Agreement evidencing revised Capital Sharing Ratios and Residual Sharing Ratios (which shall be determined in the same manner as prior to the date hereof) of TRS Member and Mystic Member reflecting TRS Member’s acquisition of the Additional Percentage Interests for the Hartford Hilton and/or the Hartford Marriott, as the case may be;

14.4.2    TRS Member shall pay the Hilton Option Price and/or the Marriott Option Price, as the case may be;

14.4.3    The parties shall calculate the prorations and deliver a Settlement Statement in accordance with the procedures set forth in the Contribution Agreement.

12.            As specifically modified hereby, the LLC Agreement shall remain in full force and effect and is hereby ratified and confirmed. All references to the LLC Agreement shall mean and refer to the LLC Agreement as amended and modified hereby.

13.            This Amendment may be executed in one or more counterparts, and all such counterparts shall together constitute the same agreement.

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13.            This Amendment shall be construed and interpreted according to the laws of the State of Delaware. Accordingly, all questions with respect to construction of this Amendment and the rights and liabilities of the parties shall be determined in accordance with the applicable provisions of the laws of the State of Delaware and this Amendment is intended to be performed in accordance with and only to the extent permitted by all applicable laws, ordinances, rules and regulations of such State. In the event that there is a direct conflict between the provisions of Delaware law and the provisions of any other jurisdiction applicable to a particular transaction, the laws of Delaware shall nevertheless apply except and to the extent that such interpretation or application would render the action or proposed action of the Company to be invalid or illegal, in which event, the law of the jurisdiction of the State or country which would be applicable under general rules regarding conflict of laws or rules of comity shall apply.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Members have caused this Amendment to be duly executed by their respective and duly authorized representatives as of the date first above written.

MEMBERS:
HERSHA HOSPITALITY LIMITED PARTNERSHIP
By:
	Name:
	Title:
MYSTIC HOTEL INVESTORS, LLC
By:
	Name:
	Title: Authorized Representative

EXHIBIT A

Distributable Funds Illustration

(see attached)

EX-10.8

Exhibit 10.8

CONDITIONAL PAYMENT GUARANTY

THIS CONDITIONAL PAYMENT GUARANTY ("Guaranty") made as of February 8, 2006, by HERSHA HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited partnership and MYSTIC HOTEL INVESTORS, LLC, a Delaware limited liability company (collectively, "Guarantors"), to and for the benefit of MERRILL LYNCH CAPITAL, a Division of Merrill Lynch Business Financial Services Inc., a Delaware corporation, its successors and assigns ("Lender").

R E C I T A L S

A. On or about the date hereof, Adriaen's Landing Hotel, LLC, a Connecticut limited liability company ("Borrower") and Lender entered into that certain Loan Agreement ("Loan Agreement") whereby Lender agreed to make a first mortgage loan (the "Loan") available to Borrower in the maximum aggregate amount up to Fifty Million and No/100ths Dollars ($50,000,000.00), for, among other things, the refinance of the Hartford Marriott Hotel located in Hartford, Connecticut (the "Project"). Capitalized terms used and not otherwise defined herein shall have the meanings given to them in the Loan Agreement.

B. In connection with the Loan, Borrower has executed and delivered a certain Promissory Note (the "Note") in favor of Lender of even date herewith in the maximum principal amount of the Loan, payment of which is secured by (i) a certain Open-End Mortgage Deed, Assignment of Leases and Rents, Security Agreement and Fixture Filing of even date herewith made by Borrower in favor of Lender (the "Mortgage") against the Project, and (ii) the other Loan Documents.

C. Guarantors are signatories to the Supplemental Limited Joinder attached to and made a part of the Loan Agreement.

D. Guarantors will derive material financial benefit from the Loan evidenced and secured by the Note, the Mortgageand the other Loan Documents.

E. Lender has relied on the statements and agreements contained herein in agreeing to make the Loan. The execution and delivery of this Guaranty by Guarantors is a condition precedent to the making of the Loan by Lender.

AGREEMENTS

NOW, THEREFORE, intending to be legally bound, Guarantors, in consideration of the matters described in the foregoing Recitals, which Recitals are incorporated herein and made a part hereof, and for other good and valuable consideration the receipt and sufficiency of which are acknowledged, hereby covenants and agrees for the benefit of Lender and its successors, indorsees, transferees, participants and assigns as follows:

1. Guarantors absolutely, unconditionally and irrevocably guarantee:

(a) the full and prompt payment of the principal of and interest on the Note when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, and the full and prompt payment of all sums which may now be or may hereafter become due and owing under the Note, the Loan Agreement and the other Loan Documents;

(b) the prompt, full and complete performance of all of Borrower's obligations under each and every covenant contained in the Loan Documents; and

(c) the full and prompt payment of any Enforcement Costs (as hereinafter defined in Section 7 hereof);

All amounts due, debts, liabilities and payment obligations described in subsections (a) and (b) of this Section 1 shall be hereinafter collectively referred to as the "Indebtedness." Notwithstanding any provisions hereof to the contrary, the obligations and liabilities of Guarantors under this Guaranty are contingent upon the occurrence and continuation of a Condition Subsequent and, therefore, this Guaranty will only be effective and enforceable if a Condition Subsequent occurs. For purposes hereof, "Condition Subsequent" means if at any time and any and all periods during which the net worth of Mystic Partners, LLC (calculated based on the undepreciated historical costs of the assets of Mystic Partners, LLC, as set forth on Schedule II to the Loan Agreement) is less than Fifty Million and No/100ths Dollars ($50,000,000.00). Notwithstanding anything contained in this Guaranty to the contrary, if (i) a Condition Subsequent occurs or is in existence at any time on or after the date on which Lender has accelerated the Loan in accordance with the Loan Agreement or (ii) Lender has commenced enforcement of this Guaranty, Lender shall at all times thereafter be entitled to enforce all of its rights and remedies hereunder.

2. In the event of any default by Borrower in the payment of the Indebtedness, after the expiration of any applicable cure or grace period, Guarantors agree, on demand by Lender or any holder of the Note (which demand may be made concurrently with notice to Borrower that Borrower is in default of its obligations), to pay the Indebtedness regardless of any defense, right of set-off or claims which Borrower or Guarantors may have against Lender or the holder of the Note.

All of the remedies set forth herein and/or provided for in any of the other Loan Documents or at law or equity shall be equally available to Lender, and the choice by Lender of one such alternative over another shall not be subject to question or challenge by Guarantors or any other person, nor shall any such choice be asserted as a defense, setoff, or failure to mitigate damages in any action, proceeding, or counteraction by Lender to recover or seeking any other remedy under this Guaranty, nor shall such choice preclude Lender from subsequently electing to exercise a different remedy. The parties have agreed to the alternative remedies provided herein in part because they recognize that the choice of remedies in the event of a default hereunder will necessarily be and should properly be a matter of good faith business judgment, which the passage of time and events may or may not prove to have been the best choice to maximize recovery by Lender at the lowest cost to Borrower and/or Guarantor. It is the intention of the parties that such good faith choice by Lender be given conclusive effect regardless of such subsequent developments.

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3. Guarantors do hereby (a) waive notice of acceptance of this Guaranty by Lender and any and all notices and demands of every kind which may be required to be given by any statute, rule or law, (b) agree to refrain from asserting, until after repayment in full of the Loan, any defense, right of set-off or other claim which Guarantors may have against Borrower, (c) waive any defense, right of set-off or other claim which Guarantors or Borrower may have against Lender or the holder of the Note, (d) waive any and all rights Guarantors may have under any anti-deficiency statute or other similar protections, (e) waive all rights at law or in equity to seek subrogation, contribution, indemnification or any other form of reimbursement or repayment from Borrower or any other person or entity now or hereafter primarily or secondarily liable for any of the Indebtedness until the Indebtedness has been satisfied in full, (f) waive presentment for payment, demand for payment, notice of nonpayment or dishonor, protest and notice of protest, diligence in collection and any and all formalities which otherwise might be legally required to charge Guarantors with liability, and (f) waive any failure by Lender to inform Guarantors of any facts Lender may now or hereafter know about Borrower, the Project, the Loan, or the transactions contemplated by the Loan Agreement, it being understood and agreed that Lender has no duty so to inform and that Guarantors are fully responsible for being and remaining informed by Borrower of all circumstances bearing on the risk of nonperformance of Borrower's obligations. Credit may be granted or continued from time to time by Lender to Borrower without notice to or authorization from Guarantors, regardless of the financial or other condition of Borrower at the time of any such grant or continuation. Lender shall have no obligation to disclose or discuss with Guarantors its assessment of the financial condition of Borrower. Guarantors acknowledge that no representations of any kind whatsoever have been made by Lender. No modification or waiver of any of the provisions of this Guaranty shall be binding upon Lender except as expressly set forth in a writing duly signed and delivered by Lender.

4. Guarantors further agree that Guarantors' liability as guarantors shall not be impaired or affected by any renewals or extensions which may be made from time to time, with or without the knowledge or consent of Guarantors of the time for payment of interest or principal under the Note or by any forbearance or delay in collecting interest or principal under the Note, or by any waiver by Lender under the Loan Agreement, Mortgageor any other Loan Documents, or by Lender's failure or election not to pursue any other remedies it may have against Borrower or Guarantors, or by any change or modification in the Note, Loan Agreement, Mortgage or any other Loan Document, or by the acceptance by Lender of any additional security or any increase, substitution or change therein, or by the release by Lender of any security or any withdrawal thereof or decrease therein, or by the application of payments received from any source to the payment of any obligation other than the Indebtedness even though Lender might lawfully have elected to apply such payments to any part or all of the Indebtedness, it being the intent hereof that, subject to Lender's compliance with the terms of this Guaranty, Guarantors shall remain liable for the payment of the Indebtedness, until the Indebtedness has been paid in full, notwithstanding any act or thing which might otherwise operate as a legal or equitable discharge of a surety. Guarantors further understand and agree that Lender may at any time enter into agreements with Borrower to amend and modify the Note, Loan Agreement, Mortgageor other Loan Documents, and may waive or release any provision or provisions of the Note, Loan Agreement, Mortgageand other Loan Documents or any thereof, and, with reference to such instruments, may make and enter into any such agreement or agreements as Lender and Borrower may deem proper and desirable, without in any manner impairing or affecting this Guaranty or any of Lender's rights hereunder or Guarantors' obligations hereunder.

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5. This is an absolute, present and continuing guaranty of payment and not of collection. Guarantors agree that this Guaranty may be enforced by Lender without the necessity at any time of resorting to or exhausting any other security or collateral given in connection herewith or with the Note, Loan Agreement, Mortgageor any of the other Loan Documents through foreclosure or sale proceedings, as the case may be, under the Mortgageor otherwise, or resorting to any other guaranties, and Guarantors hereby waive any right to require Lender to join Borrower in any action brought hereunder or to commence any action against or obtain any judgment against Borrower or to pursue any other remedy or enforce any other right. Guarantors further agree that nothing contained herein or otherwise shall prevent Lender from pursuing concurrently or successively all rights and remedies available to it at law and/or in equity or under the Note, Loan Agreement, Mortgageor any other Loan Documents, and the exercise of any of its rights or the completion of any of its remedies shall not constitute a discharge of Guarantors' obligations hereunder, it being the purpose and intent of Guarantors that the obligations of Guarantors hereunder shall be absolute, independent and unconditional under any and all circumstances whatsoever. None of Guarantors' obligations under this Guaranty or any remedy for the enforcement thereof shall be impaired, modified, changed or released in any manner whatsoever by any impairment, modification, change, release or limitation of the liability of Borrower under the Note, Loan Agreement, Mortgageor other Loan Documents or by reason of the bankruptcy of Borrower or by reason of any creditor or bankruptcy proceeding instituted by or against Borrower. This Guaranty shall continue to be effective or be reinstated (as the case may be) if at any time payment of all or any part of any sum payable pursuant to the Note, Loan Agreement, Mortgageor any other Loan Document is rescinded or otherwise required to be returned by Lender upon the insolvency, bankruptcy, dissolution, liquidation, or reorganization of Borrower, or upon or as a result of the appointment of a receiver, intervenor, custodian or conservator of or trustee or similar officer for, Borrower or any substantial part of its property, or otherwise, all as though such payment to Lender had not been made, regardless of whether Lender contested the order requiring the return of such payment. In the event of the foreclosure of the Mortgageand of a deficiency, Guarantors hereby promise and agree forthwith to pay the amount of such deficiency notwithstanding the fact that recovery of said deficiency against Borrower would not be allowed by applicable law; however, the foregoing shall not be deemed to require that Lender institute foreclosure proceedings or otherwise resort to or exhaust any other collateral or security prior to or concurrently with enforcing this Guaranty.

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6. In the event Lender or any holder of the Note shall assign the Note in whole or part to any lender or other entity in accordance with the Loan Agreement, Guarantors will accord full recognition thereto and agree that all rights and remedies of Lender or such holder hereunder shall be enforceable against Guarantors by such lender or other entity with the same force and effect and to the same extent as would have been enforceable by Lender or such holder but for such assignment.

7. If: (a) this Guaranty is placed in the hands of an attorney for collection or is collected through any legal proceeding; (b) an attorney is retained to represent Lender in any bankruptcy, reorganization, receivership, or other proceedings affecting creditors' rights and involving a claim under this Guaranty; (c) an attorney is retained to provide advice or other representation with respect to this Guaranty; or (d) an attorney is retained to represent Lender in any proceedings whatsoever in connection with this Guaranty and Lender prevails in any such proceedings, then Guarantors shall pay to Lender upon demand all attorney's fees, costs and expenses incurred in connection therewith (all of which are referred to herein as "Enforcement Costs"), in addition to all other amounts due hereunder, regardless of whether all or a portion of such Enforcement Costs are incurred in a single proceeding brought to enforce this Guaranty as well as the other Loan Documents.

8. The parties hereto intend and believe that each provision in this Guaranty comports with all applicable local, state and federal laws and judicial decisions. However, if any provision or provisions, or if any portion of any provision or provisions, in this Guaranty is found by a court of law to be in violation of any applicable local, state or federal ordinance, statute, law, administrative or judicial decision, or public policy, and if such court should declare such portion, provision or provisions of this Guaranty to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of all parties hereto that such portion, provision or provisions shall be given force to the fullest possible extent that they are legal, valid and enforceable, that the remainder of this Guaranty shall be construed as if such illegal, invalid, unlawful, void or unenforceable portion, provision or provisions were not contained therein, and that the rights, obligations and interest of Lender or the holder of the Note under the remainder of this Guaranty shall continue in full force and effect.

9. TO THE GREATEST EXTENT PERMITTED BY LAW, GUARANTORS HEREBY WAIVE ANY AND ALL RIGHTS TO REQUIRE MARSHALLING OF ASSETS BY LENDER. WITH RESPECT TO ANY SUIT, ACTION OR PROCEEDINGS RELATING TO THIS GUARANTY (EACH, A "PROCEEDING"), LENDER (BY ITS ACCEPTANCE HEREOF) AND GUARANTORS IRREVOCABLY (A) SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS HAVING JURISDICTION IN THE CITY OF CHICAGO, COUNTY OF COOK AND STATE OF ILLINOIS, AND (B) WAIVE ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT IN ANY SUCH COURT, WAIVE ANY CLAIM THAT ANY PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER WAIVE THE RIGHT TO OBJECT, WITH RESPECT TO SUCH PROCEEDING, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY. NOTHING IN THIS GUARANTY SHALL PRECLUDE LENDER FROM BRINGING A PROCEEDING IN ANY OTHER JURISDICTION NOR WILL THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE JURISDICTIONS PRECLUDE THE BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION. LENDER AND GUARANTORS FURTHER AGREE AND CONSENT THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY PROCEEDING IN ANY ILLINOIS STATE OR UNITED STATES COURT SITTING IN THE CITY OF CHICAGO AND COUNTY OF COOK MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE APPLICABLE PARTY AT THE ADDRESS INDICATED BELOW, AND SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT; EXCEPT THAT IF SUCH PARTY SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.

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10. Any indebtedness of Borrower to Guarantors now or hereafter existing is hereby subordinated to the payment of the Indebtedness. Guarantors agree that, until the entire Indebtedness has been paid in full, Guarantors will not seek, accept, or retain for its own account, any payment from Borrower on account of such subordinated debt. Any payments to Guarantors on account of such subordinated debt shall be collected and received by Guarantors in trust for Lender and shall be paid over to Lender on account of the Indebtedness without impairing or releasing the obligations of Guarantors hereunder.

11. Any amounts received by Lender from any source on account of the Loan may be utilized by Lender for the payment of the Indebtedness and any other obligations of Borrower to Lender in such order as Lender may from time to time elect. Additionally, if the indebtedness guaranteed hereby is less than the full indebtedness evidenced by the Note, all rents, proceeds and avails of the Project, including proceeds of realization of Lender's collateral, shall be deemed applied on the indebtedness of Borrower to Lender that is not guaranteed by Guarantors until such unguaranteed indebtedness of Borrower to Lender has been fully repaid before being applied upon the indebtedness guaranteed by Guarantors.

12. GUARANTORS AND LENDER (BY ITS ACCEPTANCE HEREOF) EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY CLAIM, CONTROVERSY, DISPUTE, ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS GUARANTY AND THE OTHER LOAN DOCUMENTS (INCLUDING WITHOUT LIMITATION ANY ACTIONS OR PROCEEDINGS FOR ENFORCEMENT OF THE LOAN DOCUMENTS) AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. GUARANTORS AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH OF THEM HAS RELIED ON THIS WAIVER IN ENTERING INTO THIS GUARANTY AND THE OTHER LOAN DOCUMENTS AND THAT EACH OF THEM WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. GUARANTORS AND LENDER EACH WARRANT AND REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

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13. Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and shall be deemed to have been properly given (a) if hand delivered, when delivered; (b) if mailed by United States Certified Mail (postage prepaid, return receipt requested), three (3) Business Days after mailing (c) if by any reliable overnight courier service, on the next Business Day after delivered to such courier service or (d) if by telecopier on the day of transmission, if before 3:00 p.m. (Chicago Time) on a Business Day so long as copy is sent on the same day by overnight courier as set forth below:

Guarantors:	Hersha Hospitality Limited Partnership
	510 Walnut Street, 9th Floor
	Philadelphia, Pennsylvania 19106
	Attention:	Chief Financial Officer
	Telephone:	215-238-1046
	Facsimile:	215-238-0157
	Mystic Hotel Investors, LLC
	914 Hartford Turnpike
	P.O. Box 715
	Waterford, CT 06385
	Telephone:	860-442-4559
	Facsimile:	860-437-7752
Lender:	Merrill Lynch Capital, a Division of
	Merrill Lynch Business Financial Services Inc.
	222 N. LaSalle Street - 16th Floor
	Chicago, IL 60601
	Attention:	National Portfolio Manager - Real Estate
	Telephone:	312-499-3812
	Facsimile:	312-499-3026
With a copy to:	Merrill Lynch Capital, a Division of
	Merrill Lynch Business Financial Services Inc.
	222 N. LaSalle Street - 16th Floor
	Chicago, IL 60601
	Attention:	Real Estate Legal
	Telephone:	312-499-3140
	Facsimile:	312-499-3026

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With a copy to:	Goldberg, Kohn, Bell, Black,
	Rosenbloom & Moritz, Ltd.
	55 East Monroe Street, Suite 3700
	Chicago, IL 60603
	Attention: James B. Rosenbloom, Esq.
	Telephone:	312-201-3925
	Facsimile:	312-332-2196

or at such other address as the party to be served with notice may have furnished in writing to the party seeking or desiring to serve notice as a place for the service of notice. Any notice or demand delivered to the person or entity named above to accept notices and demands for such party shall constitute notice or demand duly delivered to such party, even if delivery is refused.

14. To induce Lender to make the Loan, Guarantors make the following representations and warranties to Lender set forth in this Section. Guarantors acknowledge that but for the truth and accuracy of the matters covered by the following representations and warranties, Lender would not have agreed to make the Loan.

(a) Guarantors are duly formed, validly existing, and in good standing in its state of organization and has qualified to do business and is in good standing in any state in which it is necessary in the conduct of its business.

(b) Guarantors maintain an office at the address set forth for such party in Section 13.

(c) Any and all balance sheets, net worth statements, and other financial data with respect to Guarantors which have heretofore been given to Lender by or on behalf of Guarantors fairly and accurately present the financial condition of Guarantors as of the respective dates thereof.

(d) The execution, delivery, and performance by Guarantors of this Guaranty does not and will not violate (i) any Laws, order, rule, regulation, writ, injunction or decree now in effect of any Government Authority, or court having jurisdiction over Guarantors, (ii) any contractual restriction binding on or affecting Guarantors or Guarantors' property or assets which may adversely affect Guarantors' ability to fulfill its obligations under this Guaranty, (iii) the instruments creating any trust holding title to any assets included in Guarantors' financial statements, or (iv) the organizational or other documents of Guarantors.

(e) To the Guarantors' knowledge, this Guaranty creates legal, valid, and binding obligations of Guarantors enforceable in accordance with its terms subject to bankruptcy and general equity principles.

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(f) Except as disclosed in writing to Lender, there is no action, proceeding, or investigation pending or, to the knowledge of Guarantors, threatened or affecting Guarantors, which may adversely affect Guarantors' ability to fulfill its obligations under this Guaranty. There are no judgments or orders for the payment of money rendered against Guarantors for an amount in excess of $100,000.00 that have been undischarged for a period of ten (10) or more consecutive days and the enforcement of which is not stayed by reason of a pending appeal or otherwise. Guarantors are not in default under any agreements which may materially and adversely affect Guarantors' ability to fulfill its obligations under this Guaranty.

(g) All statements set forth in the Recitals are true and correct.

All of the foregoing representations and warranties shall be deemed remade on the date of the first disbursement of Loan proceeds, on the date of each advance of Loan proceeds, and upon any extension of the Loan pursuant to the Loan Agreement. Guarantors hereby agree to indemnify, defend and hold Lender free and harmless from and against all loss, cost, liability, damage, and expense, including attorney's fees and costs, which Lender may sustain by reason of the inaccuracy or breach of any of the foregoing representations and warranties as of the date the foregoing representations and warranties are made and are remade.

15. Guarantors shall deliver or cause to be delivered to Lender all of the Guarantors' financial statements to be delivered in accordance with the terms of the Loan Agreement.

16. This Guaranty shall be binding upon the heirs, executors, legal and personal representatives, successors and assigns of Guarantors. If more than one party executes this Guaranty, the liability of all such parties shall be joint and several.

17. THIS GUARANTY, THE NOTE, AND ALL OTHER INSTRUMENTS EVIDENCING AND SECURING THE LOAN SECURED HEREBY WERE NEGOTIATED IN THE STATE OF ILLINOIS, AND DELIVERED BY GUARANTORS OR BORROWER, AS APPLICABLE, AND ACCEPTED BY LENDER IN THE STATE OF ILLINOIS, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND THE UNDERLYING TRANSACTIONS EMBODIED HEREBY. IN ALL RESPECTS, INCLUDING, WITHOUT LIMITATION, MATTERS OF CONSTRUCTION OF THE IMPROVEMENTS AND PERFORMANCE OF THIS GUARANTY AND THE OBLIGATIONS ARISING HEREUNDER, THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

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18. Lender shall be entitled to honor any request for Loan proceeds made by Borrower and shall have no obligation to see to the proper disposition of such advances. Guarantors agree that its obligations hereunder shall not be released or affected by reason of any improper disposition by Borrower of such Loan proceeds.

19. This Guaranty may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same instrument.

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IN WITNESS WHEREOF, Guarantors have delivered this Guaranty in the State of Illinois as of the date first written above.

GUARANTORS:

HERSHA HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited partnership

By:

Name:

Its:

MYSTIC HOTEL INVESTORS, LLC, a Delaware limited liability company

By:

Name:

Its:

EX-10.9

Exhibit 10.9

CONDITIONAL PAYMENT GUARANTY

THIS CONDITIONAL PAYMENT GUARANTY ("Guaranty") made as of February 8, 2006, by HERSHA HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited partnership and MYSTIC HOTEL INVESTORS, LLC, a Delaware limited liability company (collectively, "Guarantors"), to and for the benefit of MERRILL LYNCH CAPITAL, a Division of Merrill Lynch Business Financial Services Inc., a Delaware corporation, its successors and assigns ("Lender").

R E C I T A L S

A.On or about the September 30, 2005, 315 Trumbull Street Associates, LLC, a Connecticut limited liability company ("Borrower") and Lender entered into that certain Loan Agreement ("Loan Agreement") whereby Lender agreed to make a first mortgage loan (the "Loan") available to Borrower in the maximum aggregate amount up to Twenty-Seven Million and No/100ths Dollars ($27,000,000.00), for, among other things, the refinance of the Hartford Hilton Hotel located in Hartford, Connecticut (the "Project"). Capitalized terms used and not otherwise defined herein shall have the meanings given to them in the Loan Agreement.

B.In connection with the Loan, Borrower executed and delivered a certain Promissory Note (the "Note") in favor of Lender of even date herewith in the maximum principal amount of the Loan, payment of which is secured by (i) a certain Open-End Mortgage Deed, Assignment of Leases and Rents, Security Agreement and Fixture Filing of even date herewith made by Borrower in favor of Lender (the "Mortgage") against the Project, and (ii) the other Loan Documents.

C.In connection with the Loan, Mystic Partners, LLC, a Delaware limited liability company ("Mystic") executed that certain Conditional Payment Guaranty dated September 30, 2005, in favor of Lender (the "Hilton Guaranty"), pursuant to which Mystic conditionally guaranteed the repayment of the Loan.

D.Concurrently herewith, Lender and Mystic have entered into a certain Amended and Restated Payment Guaranty (the "Amended and Restated Hilton Guaranty"), pursuant to which the Hilton Guaranty has been amended and restated in its entirety.

E.Concurrently herewith, Lender and Adriaen's Landing Hotel, LLC ("Marriott Borrower"), an affiliate of Borrower, have entered into a certain Loan Agreement pursuant to which Lender has agreed to make a Loan (the "Marriott Loan") available to Marriott Borrower in the maximum aggregate amount of up to Fifty Million and No/100ths Dollars ($50,000,000.00).

F.Guarantors collectively own one hundred percent (100%) of the membership interests in Mystic.

G.Mystic owns not less than eighty-five percent (85%) of the ownership interests in Borrower and Marriott Borrower.

H.Guarantors will derive material financial benefit from the Loan and the Marriott Loan.

I.  Lender has relied on the statements and agreements contained herein in agreeing to enter into the Amended and Restated Hilton Guaranty and make the Marriott Loan. The execution and delivery of this Guaranty by Guarantors is a condition precedent to the execution of the Amended and Restated Hilton Guaranty by Lender and the making of the Marriott Loan.

AGREEMENTS

NOW, THEREFORE, intending to be legally bound, Guarantors, in consideration of the matters described in the foregoing Recitals, which Recitals are incorporated herein and made a part hereof, and for other good and valuable consideration the receipt and sufficiency of which are acknowledged, hereby covenants and agrees for the benefit of Lender and its successors, indorsees, transferees, participants and assigns as follows:

1.  Guarantors absolutely, unconditionally and irrevocably guarantee:

(a) the full and prompt payment of the principal of and interest on the Note when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, and the full and prompt payment of all sums which may now be or may hereafter become due and owing under the Note, the Loan Agreement and the other Loan Documents;

(b) the prompt, full and complete performance of all of Borrower's obligations under each and every covenant contained in the Loan Documents; and

(c) the full and prompt payment of any Enforcement Costs (as hereinafter defined in Section 7 hereof);

All amounts due, debts, liabilities and payment obligations described in subsections (a) and (b) of this Section 1 shall be hereinafter collectively referred to as the "Indebtedness." Notwithstanding any provisions hereof to the contrary, the obligations and liabilities of Guarantors under this Guaranty are contingent upon the occurrence and continuation of a Condition Subsequent and, therefore, this Guaranty will only be effective and enforceable if a Condition Subsequent occurs. For purposes hereof, "Condition Subsequent" means if at any time and for any and all periods during which the net worth of Mystic Partners, LLC (calculated based on the undepreciated historical costs of the assets of Mystic Partners, LLC, as set forth on Schedule II to the Loan Agreement) is less than Fifty Million and No/100ths Dollars ($50,000,000.00). Notwithstanding anything contained in this Guaranty to the contrary, if (i) a Condition Subsequent occurs or is in existence at any time on or after the date on which Lender has accelerated the Loan in accordance with the Loan Agreement or (ii) Lender has commenced enforcement of this Guaranty, Lender shall at all times thereafter be entitled to enforce all of its rights and remedies hereunder.

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2.In the event of any default by Borrower in the payment of the Indebtedness, after the expiration of any applicable cure or grace period, Guarantors agree, on demand by Lender or any holder of the Note (which demand may be made concurrently with notice to Borrower that Borrower is in default of its obligations), to pay the Indebtedness regardless of any defense, right of set-off or claims which Borrower or Guarantors may have against Lender or the holder of the Note.

  All of the remedies set forth herein and/or provided for in any of the other Loan Documents or at law or equity shall be equally available to Lender, and the choice by Lender of one such alternative over another shall not be subject to question or challenge by Guarantors or any other person, nor shall any such choice be asserted as a defense, setoff, or failure to mitigate damages in any action, proceeding, or counteraction by Lender to recover or seeking any other remedy under this Guaranty, nor shall such choice preclude Lender from subsequently electing to exercise a different remedy. The parties have agreed to the alternative remedies provided herein in part because they recognize that the choice of remedies in the event of a default hereunder will necessarily be and should properly be a matter of good faith business judgment, which the passage of time and events may or may not prove to have been the best choice to maximize recovery by Lender at the lowest cost to Borrower and/or Guarantor. It is the intention of the parties that such good faith choice by Lender be given conclusive effect regardless of such subsequent developments.

3.Guarantors do hereby (a) waive notice of acceptance of this Guaranty by Lender and any and all notices and demands of every kind which may be required to be given by any statute, rule or law, (b) agree to refrain from asserting, until after repayment in full of the Loan, any defense, right of set-off or other claim which Guarantors may have against Borrower, (c) waive any defense, right of set-off or other claim which Guarantors or Borrower may have against Lender or the holder of the Note, (d) waive any and all rights Guarantors may have under any anti-deficiency statute or other similar protections, (e) waive all rights at law or in equity to seek subrogation, contribution, indemnification or any other form of reimbursement or repayment from Borrower or any other person or entity now or hereafter primarily or secondarily liable for any of the Indebtedness until the Indebtedness has been satisfied in full, (f) waive presentment for payment, demand for payment, notice of nonpayment or dishonor, protest and notice of protest, diligence in collection and any and all formalities which otherwise might be legally required to charge Guarantors with liability, and (f) waive any failure by Lender to inform Guarantors of any facts Lender may now or hereafter know about Borrower, the Project, the Loan, or the transactions contemplated by the Loan Agreement, it being understood and agreed that Lender has no duty so to inform and that Guarantors are fully responsible for being and remaining informed by Borrower of all circumstances bearing on the risk of nonperformance of Borrower's obligations. Credit may be granted or continued from time to time by Lender to Borrower without notice to or authorization from Guarantors, regardless of the financial or other condition of Borrower at the time of any such grant or continuation. Lender shall have no obligation to disclose or discuss with Guarantors its assessment of the financial condition of Borrower. Guarantors acknowledge that no representations of any kind whatsoever have been made by Lender. No modification or waiver of any of the provisions of this Guaranty shall be binding upon Lender except as expressly set forth in a writing duly signed and delivered by Lender.

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4.Guarantors further agree that Guarantors' liability as guarantors shall not be impaired or affected by any renewals or extensions which may be made from time to time, with or without the knowledge or consent of Guarantors of the time for payment of interest or principal under the Note or by any forbearance or delay in collecting interest or principal under the Note, or by any waiver by Lender under the Loan Agreement, Mortgageor any other Loan Documents, or by Lender's failure or election not to pursue any other remedies it may have against Borrower or Guarantors, or by any change or modification in the Note, Loan Agreement, Mortgage or any other Loan Document, or by the acceptance by Lender of any additional security or any increase, substitution or change therein, or by the release by Lender of any security or any withdrawal thereof or decrease therein, or by the application of payments received from any source to the payment of any obligation other than the Indebtedness even though Lender might lawfully have elected to apply such payments to any part or all of the Indebtedness, it being the intent hereof that, subject to Lender's compliance with the terms of this Guaranty, Guarantors shall remain liable for the payment of the Indebtedness, until the Indebtedness has been paid in full, notwithstanding any act or thing which might otherwise operate as a legal or equitable discharge of a surety. Guarantors further understand and agree that Lender may at any time enter into agreements with Borrower to amend and modify the Note, Loan Agreement, Mortgageor other Loan Documents, and may waive or release any provision or provisions of the Note, Loan Agreement, Mortgageand other Loan Documents or any thereof, and, with reference to such instruments, may make and enter into any such agreement or agreements as Lender and Borrower may deem proper and desirable, without in any manner impairing or affecting this Guaranty or any of Lender's rights hereunder or Guarantors' obligations hereunder.

5.This is an absolute, present and continuing guaranty of payment and not of collection. Guarantors agree that this Guaranty may be enforced by Lender without the necessity at any time of resorting to or exhausting any other security or collateral given in connection herewith or with the Note, Loan Agreement, Mortgageor any of the other Loan Documents through foreclosure or sale proceedings, as the case may be, under the Mortgageor otherwise, or resorting to any other guaranties, and Guarantors hereby waive any right to require Lender to join Borrower in any action brought hereunder or to commence any action against or obtain any judgment against Borrower or to pursue any other remedy or enforce any other right. Guarantors further agree that nothing contained herein or otherwise shall prevent Lender from pursuing concurrently or successively all rights and remedies available to it at law and/or in equity or under the Note, Loan Agreement, Mortgageor any other Loan Documents, and the exercise of any of its rights or the completion of any of its remedies shall not constitute a discharge of Guarantors' obligations hereunder, it being the purpose and intent of Guarantors that the obligations of Guarantors hereunder shall be absolute, independent and unconditional under any and all circumstances whatsoever. None of Guarantors' obligations under this Guaranty or any remedy for the enforcement thereof shall be impaired, modified, changed or released in any manner whatsoever by any impairment, modification, change, release or limitation of the liability of Borrower under the Note, Loan Agreement, Mortgageor other Loan Documents or by reason of the bankruptcy of Borrower or by reason of any creditor or bankruptcy proceeding instituted by or against Borrower. This Guaranty shall continue to be effective or be reinstated (as the case may be) if at any time payment of all or any part of any sum payable pursuant to the Note, Loan Agreement, Mortgageor any other Loan Document is rescinded or otherwise required to be returned by Lender upon the insolvency, bankruptcy, dissolution, liquidation, or reorganization of Borrower, or upon or as a result of the appointment of a receiver, intervenor, custodian or conservator of or trustee or similar officer for, Borrower or any substantial part of its property, or otherwise, all as though such payment to Lender had not been made, regardless of whether Lender contested the order requiring the return of such payment. In the event of the foreclosure of the Mortgageand of a deficiency, Guarantors hereby promise and agree forthwith to pay the amount of such deficiency notwithstanding the fact that recovery of said deficiency against Borrower would not be allowed by applicable law; however, the foregoing shall not be deemed to require that Lender institute foreclosure proceedings or otherwise resort to or exhaust any other collateral or security prior to or concurrently with enforcing this Guaranty.

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6.In the event Lender or any holder of the Note shall assign the Note in whole or part to any lender or other entity in accordance with the Loan Agreement, Guarantors will accord full recognition thereto and agree that all rights and remedies of Lender or such holder hereunder shall be enforceable against Guarantors by such lender or other entity with the same force and effect and to the same extent as would have been enforceable by Lender or such holder but for such assignment.

7.If: (a) this Guaranty is placed in the hands of an attorney for collection or is collected through any legal proceeding; (b) an attorney is retained to represent Lender in any bankruptcy, reorganization, receivership, or other proceedings affecting creditors' rights and involving a claim under this Guaranty; (c) an attorney is retained to provide advice or other representation with respect to this Guaranty; or (d) an attorney is retained to represent Lender in any proceedings whatsoever in connection with this Guaranty and Lender prevails in any such proceedings, then Guarantors shall pay to Lender upon demand all attorney's fees, costs and expenses incurred in connection therewith (all of which are referred to herein as "Enforcement Costs"), in addition to all other amounts due hereunder, regardless of whether all or a portion of such Enforcement Costs are incurred in a single proceeding brought to enforce this Guaranty as well as the other Loan Documents.

8.The parties hereto intend and believe that each provision in this Guaranty comports with all applicable local, state and federal laws and judicial decisions. However, if any provision or provisions, or if any portion of any provision or provisions, in this Guaranty is found by a court of law to be in violation of any applicable local, state or federal ordinance, statute, law, administrative or judicial decision, or public policy, and if such court should declare such portion, provision or provisions of this Guaranty to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of all parties hereto that such portion, provision or provisions shall be given force to the fullest possible extent that they are legal, valid and enforceable, that the remainder of this Guaranty shall be construed as if such illegal, invalid, unlawful, void or unenforceable portion, provision or provisions were not contained therein, and that the rights, obligations and interest of Lender or the holder of the Note under the remainder of this Guaranty shall continue in full force and effect.

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9.TO THE GREATEST EXTENT PERMITTED BY LAW, GUARANTORS HEREBY WAIVE ANY AND ALL RIGHTS TO REQUIRE MARSHALLING OF ASSETS BY LENDER. WITH RESPECT TO ANY SUIT, ACTION OR PROCEEDINGS RELATING TO THIS GUARANTY (EACH, A "PROCEEDING"), LENDER (BY ITS ACCEPTANCE HEREOF) AND GUARANTORS IRREVOCABLY (A) SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS HAVING JURISDICTION IN THE CITY OF CHICAGO, COUNTY OF COOK AND STATE OF ILLINOIS, AND (B) WAIVE ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT IN ANY SUCH COURT, WAIVE ANY CLAIM THAT ANY PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER WAIVE THE RIGHT TO OBJECT, WITH RESPECT TO SUCH PROCEEDING, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY. NOTHING IN THIS GUARANTY SHALL PRECLUDE LENDER FROM BRINGING A PROCEEDING IN ANY OTHER JURISDICTION NOR WILL THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE JURISDICTIONS PRECLUDE THE BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION. LENDER AND GUARANTORS FURTHER AGREE AND CONSENT THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY PROCEEDING IN ANY ILLINOIS STATE OR UNITED STATES COURT SITTING IN THE CITY OF CHICAGO AND COUNTY OF COOK MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE APPLICABLE PARTY AT THE ADDRESS INDICATED BELOW, AND SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT; EXCEPT THAT IF SUCH PARTY SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.

10.Any indebtedness of Borrower to Guarantors now or hereafter existing is hereby subordinated to the payment of the Indebtedness. Guarantors agree that, until the entire Indebtedness has been paid in full, Guarantors will not seek, accept, or retain for its own account, any payment from Borrower on account of such subordinated debt. Any payments to Guarantors on account of such subordinated debt shall be collected and received by Guarantors in trust for Lender and shall be paid over to Lender on account of the Indebtedness without impairing or releasing the obligations of Guarantors hereunder.

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11.Any amounts received by Lender from any source on account of the Loan may be utilized by Lender for the payment of the Indebtedness and any other obligations of Borrower to Lender in such order as Lender may from time to time elect. Additionally, if the indebtedness guaranteed hereby is less than the full indebtedness evidenced by the Note, all rents, proceeds and avails of the Project, including proceeds of realization of Lender's collateral, shall be deemed applied on the indebtedness of Borrower to Lender that is not guaranteed by Guarantors until such unguaranteed indebtedness of Borrower to Lender has been fully repaid before being applied upon the indebtedness guaranteed by Guarantors.

12.GUARANTORS AND LENDER (BY ITS ACCEPTANCE HEREOF) EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY CLAIM, CONTROVERSY, DISPUTE, ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS GUARANTY AND THE OTHER LOAN DOCUMENTS (INCLUDING WITHOUT LIMITATION ANY ACTIONS OR PROCEEDINGS FOR ENFORCEMENT OF THE LOAN DOCUMENTS) AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. GUARANTORS AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH OF THEM HAS RELIED ON THIS WAIVER IN ENTERING INTO THIS GUARANTY AND THE OTHER LOAN DOCUMENTS AND THAT EACH OF THEM WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. GUARANTORS AND LENDER EACH WARRANT AND REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

13.Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and shall be deemed to have been properly given (a) if hand delivered, when delivered; (b) if mailed by United States Certified Mail (postage prepaid, return receipt requested), three (3) Business Days after mailing (c) if by any reliable overnight courier service, on the next Business Day after delivered to such courier service or (d) if by telecopier on the day of transmission, if before 3:00 p.m. (Chicago Time) on a Business Day so long as copy is sent on the same day by overnight courier as set forth below:

Guarantors:	Hersha Hospitality Limited Partnership
	510 Walnut Street, 9th Floor
	Philadelphia, Pennsylvania 19106
	Attention:	Chief Financial Officer
	Telephone:	215-238-1046
	Facsimile:	215-238-0157
	Mystic Hotel Investors, LLC
	914 Hartford Turnpike
	P.O. Box 715
	Waterford, CT 06385
	Telephone:	860-442-4559
	Facsimile:	860-437-7752

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Lender:	Merrill Lynch Capital, a Division of
	Merrill Lynch Business Financial Services Inc.
	222 N. LaSalle Street - 16th Floor
	Chicago, IL 60601
	Attention:	National Portfolio Manager - Real Estate
	Telephone:	312-499-3812
	Facsimile:	312-499-3026
With a copy to:	Merrill Lynch Capital, a Division of
	Merrill Lynch Business Financial Services Inc.
	222 N. LaSalle Street - 16th Floor
	Chicago, IL 60601
	Attention:	Real Estate Legal
	Telephone:	312-499-3140
	Facsimile:	312-499-3026
With a copy to:	Goldberg, Kohn, Bell, Black,
	Rosenbloom & Moritz, Ltd.
	55 East Monroe Street, Suite 3700
	Chicago, IL 60603
	Attention: James B. Rosenbloom, Esq.
	Telephone:	312-201-3925
	Facsimile:	312-332-2196

or at such other address as the party to be served with notice may have furnished in writing to the party seeking or desiring to serve notice as a place for the service of notice. Any notice or demand delivered to the person or entity named above to accept notices and demands for such party shall constitute notice or demand duly delivered to such party, even if delivery is refused.

14.To induce Lender to make the Loan, Guarantors make the following representations and warranties to Lender set forth in this Section. Guarantors acknowledge that but for the truth and accuracy of the matters covered by the following representations and warranties, Lender would not have agreed to make the Loan.

(a) Guarantors are duly formed, validly existing, and in good standing in its state of organization and has qualified to do business and is in good standing in any state in which it is necessary in the conduct of its business.

(b) Guarantors maintain an office at the address set forth for such party in Section 13.

(c) Any and all balance sheets, net worth statements, and other financial data with respect to Guarantors which have heretofore been given to Lender by or on behalf of Guarantors fairly and accurately present the financial condition of Guarantors as of the respective dates thereof.

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(d) The execution, delivery, and performance by Guarantors of this Guaranty does not and will not violate (i) any Laws, order, rule, regulation, writ, injunction or decree now in effect of any Government Authority, or court having jurisdiction over Guarantors, (ii) any contractual restriction binding on or affecting Guarantors or Guarantors' property or assets which may adversely affect Guarantors' ability to fulfill its obligations under this Guaranty, (iii) the instruments creating any trust holding title to any assets included in Guarantors' financial statements, or (iv) the organizational or other documents of Guarantors.

(e) To the Guarantors' knowledge, this Guaranty creates legal, valid, and binding obligations of Guarantors enforceable in accordance with its terms subject to bankruptcy and general equity principles.

(f)  Except as disclosed in writing to Lender, there is no action, proceeding, or investigation pending or, to the knowledge of Guarantors, threatened or affecting Guarantors, which may adversely affect Guarantors' ability to fulfill its obligations under this Guaranty. There are no judgments or orders for the payment of money rendered against Guarantors for an amount in excess of $100,000.00 that have been undischarged for a period of ten (10) or more consecutive days and the enforcement of which is not stayed by reason of a pending appeal or otherwise. Guarantors are not in default under any agreements which may materially and adversely affect Guarantors' ability to fulfill its obligations under this Guaranty.

(g) All statements set forth in the Recitals are true and correct.

All of the foregoing representations and warranties shall be deemed remade on the date of the first disbursement of Loan proceeds, on the date of each advance of Loan proceeds, and upon any extension of the Loan pursuant to the Loan Agreement. Guarantors hereby agree to indemnify, defend and hold Lender free and harmless from and against all loss, cost, liability, damage, and expense, including attorney's fees and costs, which Lender may sustain by reason of the inaccuracy or breach of any of the foregoing representations and warranties as of the date the foregoing representations and warranties are made and are remade.

15.Guarantors shall deliver or cause to be delivered to Lender all of the Guarantors' financial statements to be delivered in accordance with the terms of the Loan Agreement.

16.This Guaranty shall be binding upon the heirs, executors, legal and personal representatives, successors and assigns of Guarantors. If more than one party executes this Guaranty, the liability of all such parties shall be joint and several.

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17.THIS GUARANTY, THE NOTE, AND ALL OTHER INSTRUMENTS EVIDENCING AND SECURING THE LOAN SECURED HEREBY WERE NEGOTIATED IN THE STATE OF ILLINOIS, AND DELIVERED BY GUARANTORS OR BORROWER, AS APPLICABLE, AND ACCEPTED BY LENDER IN THE STATE OF ILLINOIS, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND THE UNDERLYING TRANSACTIONS EMBODIED HEREBY. IN ALL RESPECTS, INCLUDING, WITHOUT LIMITATION, MATTERS OF CONSTRUCTION OF THE IMPROVEMENTS AND PERFORMANCE OF THIS GUARANTY AND THE OBLIGATIONS ARISING HEREUNDER, THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

18.Lender shall be entitled to honor any request for Loan proceeds made by Borrower and shall have no obligation to see to the proper disposition of such advances. Guarantors agree that its obligations hereunder shall not be released or affected by reason of any improper disposition by Borrower of such Loan proceeds.

19.This Guaranty may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same instrument.

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IN WITNESS WHEREOF, Guarantors have delivered this Guaranty in the State of Illinois as of the date first written above.

GUARANTORS:

HERSHA HOSPITALITY LIMITED PARTNERSHIP, a Virginia limited partnership

By:

Name:

Its:

MYSTIC HOTEL INVESTORS, LLC, a Delaware limited liability company

By:

Name:

Its:

EX-10.10

Exhibit 10.10

SUPPLEMENTAL LIMITED JOINDER

In order to induce Lender to make the Loan, the undersigned Net Worth Guarantor(s) have agreed to enter into this Supplemental Limited Joinder in connection with that certain Loan Agreement (the "Loan Agreement") dated February 8, 2006, between ADRIAEN'S LANDING HOTEL, LLC, a Connecticut limited liability company ("Borrower"), and MERRILL LYNCH CAPITAL, a Division of Merrill Lynch Business Financial Services Inc., a Delaware corporation (collectively, with its successors and assigns, "Lender"). (All capitalized terms not otherwise defined herein shall have the meanings set forth in the Loan Agreement.) Each Principal acknowledges that without this Supplemental Limited Joinder, Lender would be unwilling to make the Loan. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agree and covenant as follows:

1. Retained Liabilities. Except for the Retained Liabilities (defined below) and the obligations, if any, of any Principal under any separate guaranty provided to Lender in connection with the Loan, no Net Worth Guarantor shall be personally liable to pay the Loan, or any other amount due, or to perform any obligation, under the Loan Documents, and Lender agrees to look solely to all revenue and assets of Borrower, the Project and any other collateral heretofore, now, or hereafter pledged by any party to secure the Loan. The obligations of each Net Worth Guarantor hereunder are separate and independent obligations and are not secured by the grant or pledge by Borrower pursuant to the Mortgage. This Supplemental Limited Joinder is a guaranty of full and complete payment and performance and not of collectability. Each Net Worth Guarantor, jointly and severally, shall be personally liable for the following (the "Retained Liabilities"):

(a)All losses, damages, causes of actions, suits and Expenses incurred by Lender or any Affiliate or agent thereof as a result of (i) any failure after the occurrence and during the continuance of any default by Borrower (without benefit of any applicable grace or cure period) to apply any portion of the revenue from the Project to the Loan as required per the Loan Agreement or to customary operating expenses of the Project, (ii) fraud by any Borrower Party, (iii) misapplication, misappropriation or conversion by any Borrower Party of any rents, proceeds or funds deriving from (A) the Project, (B) any insurance proceeds paid by reason of any loss, damage or destruction to the Project and not used by Borrower for restoration or repair of the Project; and/or (C) any awards or amounts received in connection with condemnation of all or a portion of the Project and not used by Borrower or Operating Lessee for restoration or repair of the Project, (iv) material misrepresentation, (v) any material waste or abandonment of the Project, (vi) failure to keep the Project insured in accordance with the terms of the Loan Documents to the extent of Gross Revenue available therefore, (vii) any fees paid by Borrower or Operating Lessee to a Principal, Net Worth Guarantor, Manager, Asset Manager, Operating Lessee or any Affiliate after any default under the Loan Documents, (viii) any breach of the Environmental Obligations by Borrower or any Environmental Indemnitor or any representation or warranty contained in Article 6 of the Loan Agreement (Environmental Matters), (ix) Borrower's hiring of employees in violation of the Loan Documents, (x) voluntary termination of the License Agreement by Borrower or Operating Lessee, (xi) any failure of Borrower or any Principal (or any other holder of the liquor license or liquor permit) to fully cooperate with Lender in the transfer of the liquor license for the Project to Lender, or its designee, following a foreclosure or deed-in-lieu of foreclosure or in operating all bar and other facilities requiring a liquor license during such transition period; or (xi) any claim against Lender by any depository bank which is the holder of a Depository Account unless such claim is solely the result of Lender's gross negligence or willful misconduct; (xiii) the failure of Borrower to obtain the Final C/O on or before June 30, 2006, for any reason whatsoever; or (xiv) Lender becoming liable (by operation of law or pursuant to Lender's exercise of any rights or remedies under the Loan Documents or otherwise) for any of Borrower's liabilities under the Tax Assessment Fixing Agreement first arising prior to the date on which Lender (or its nominee) takes title to the Project whether by foreclosure of the Mortgage, deed-in-lieu thereof or otherwise.

(b)Repayment of the Loan, the Exit Fee, all costs and expenses of Lender, and all other payment obligations of Borrower under the Loan Documents in the event of (i) any breach by Borrower of any of the following covenants of the Loan Agreement in (A) Section 4.2(b) (transfers and change of control), (B) Section 4.2(l) (no additional debt or encumbrances), (C) Section 4.2(m) (organizational documents), (D) Section 4.2(n) (single purpose entity), or (E) Section 4.2(u) (depository accounts and credit card issuers), or (F) Section 4.2(cc) (revocation of the temporary c/o), or (ii) the filing by Borrower or Operating Lessee or any Net Worth Guarantor or any Principal, or the filing against Borrower or Operating Lessee or any Net Worth Guarantor or any Principal by any Principal or any Net Worth Guarantor or any Affiliate of any Principal or any Net Worth Guarantor, of any proceeding for relief under any federal or state bankruptcy, insolvency or receivership laws or any assignment for the benefit of creditors made by Borrower or Operating Lessee.

(c)Satisfaction of the obligations of Net Worth Guarantors under the Net Worth Guaranty of even date herewith in favor of Lender.

The liability of each Net Worth Guarantor shall be direct and immediate as a primary and not a secondary obligation or liability, and is not conditional or contingent upon the pursuit of any remedies against Borrower, or any other Net Worth Guarantor or any other person, or against any collateral or liens held by Lender.

The foregoing shall in no way limit or impair the enforcement against the Borrower, Project or any other collateral security granted by the Loan Documents of any of the Lender's rights and remedies pursuant to the Loan Documents.

"Borrower Party" means, collectively, Borrower, Operating Lessee, Manager, Asset Manager, Principal, Net Worth Guarantors and each of their agents and Affiliates.

2. Waivers.  To the fullest extent permitted by applicable law, each Net Worth Guarantor waives all rights and defenses of sureties, guarantors, accommodation parties and/or co-makers and agrees that its obligations under this Joinder shall be direct, primary, absolute and unconditional and that its obligations under this Joinder shall be unaffected by any of such rights or defenses, including,

(a) Any rights which it may have to require that (1) Lender first proceed against Borrower, any other Net Worth Guarantor or any other person or entity with respect to the Retained Liabilities or (2) Lender first proceed against any collateral held by Lender or (3) any party to be joined in any proceeding to enforce the Retained Liabilities;

(b) The incapacity, lack of authority, death or disability of Borrower, any Net Worth Guarantor or any other person or entity;

(c) The failure of Lender to commence an action against Borrower or any other person or entity or to proceed against or exhaust any security held by Lender at any time or to pursue any other remedy whatsoever at any time;

(d) Any duty on the part of Lender to disclose to any Net Worth Guarantor any facts it may now or hereafter know regarding Borrower regardless of whether Lender has reason to believe that any such facts materially increase the risk beyond that which any Net Worth Guarantor intends to assume or has reason to believe that such facts are unknown to any Net Worth Guarantor, each Net Worth Guarantor acknowledging that it is fully responsible for being and keeping informed of the financial condition and affairs of Borrower;

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(e) Lack of notice of default, demand of performance or notice of acceleration to Borrower, any other person or entity with respect to the Loan or the Retained Liabilities;

(f) The consideration for this Supplemental Limited Joinder;

(g) Any acts or omissions of Lender which vary, increase or decrease the risk on any Net Worth Guarantor;

(h) Any statute of limitations affecting the liability of any Net Worth Guarantor hereunder, the liability of Borrower or any guarantor under the Loan Documents, or the enforcement hereof, to the extent permitted by law;

(i) The application by Borrower of the proceeds of the Loan for purposes other than the purposes represented by Borrower to Lender or intended or understood by Lender or any Net Worth Guarantor;

(j) An election of remedies by Lender, including any election to proceed against any collateral by judicial or non-judicial foreclosure, whether real property or personal property, or by deed in lieu thereof, and whether or not every aspect of any foreclosure sale is commercially reasonable, and whether or not any such election of remedies destroys or otherwise impairs the subrogation rights of any Net Worth Guarantor or the rights of any Net Worth Guarantor to proceed against Borrower or any guarantor for reimbursement, or both;

(k) Any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in any other aspects more burdensome than that of a Net Worth Guarantor;

(1) Any rights to enforce any remedy which Lender may have against Borrower, any rights to participate in any security for the Loan and any rights of indemnity, reimbursement, contribution or subrogation which any Net Worth Guarantor may have against Borrower or any other Net Worth Guarantor or Person;

(m) Lender's election, in any proceeding instituted under the Federal Bankruptcy Code, of the application of Section 1111 (b)(2) of the Federal Bankruptcy Code or any successor statute; and

(n) Any borrowing or any grant of a security interest under Section 364 of the Federal Bankruptcy Code.

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3. Consents and Releases.  Each Net Worth Guarantor hereby consents and agrees that Lender may at any time, and from time to time, without notice to or further consent from any Net Worth Guarantor and either with or without consideration do any one or more of the following, all without affecting the agreements contained herein or the liability of any Net Worth Guarantor for the Retained Liabilities: (a) surrender without substitution any property or other collateral of any kind or nature whatsoever held by it, or by any person, firm or corporation on its behalf or for its account, securing the Loan or the Retained Liabilities; (b) modify the terms of any document evidencing, securing or setting forth the terms of the Loan; (c) grant releases, compromises and indulgences with respect to the Loan or the Retained Liabilities or any persons or entities now or hereafter liable thereon; or (d) take or fail to take any action of any type whatsoever with respect to the Loan or the Retained Liabilities; (e) release any Net Worth Guarantor hereunder; or (f) enforce this Supplemental Limited Joinder in separate actions against one or more of the Net Worth Guarantors, or by an action against some or all of the Net Worth Guarantors, or any combination of the foregoing. To the maximum extent permitted by law, each Net Worth Guarantor knowingly, voluntarily and intentionally agrees to be bound by the provisions of Article 3 of the Loan Agreement (solely with respect to providing financial information with respect to themselves), Section 4.2(m) of the Loan Agreement and Article 11 of the Loan Agreement, including, without limitation, the waiver of the right to a trial by jury in Section 11.2, and the consents to jurisdiction and the governing law of Illinois set forth in Sections 11.3, and 11.4, respectively.

4. Successors and Assigns.  Subject to the restrictions on transfer and assignment contained in Section 4.2(b) of the Loan Agreement, this Supplemental Limited Joinder shall be binding on Hersha Hospitality Limited Partnership and Mystic Hotel Investors, LLC, as applicable, and their respective heirs, successors and permitted assigns.

5. Enforcement.  Lender's right to enforce this Supplemental Limited Joinder against Net Worth Guarantors shall be subject to the terms and conditions relating to enforcement set forth in Section 4.4(b) of the Loan Agreement.

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Executed as of February _____, 2006
NET WORTH GUARANTORS:
HERSHA HOSPITALITY LIMITED
PARTNERSHIP, a Virginia limited partnership
By:	/s/ Ashish R. Parikh
Name:		Ashish R. Parikh
Address:
Tax ID #:			25-1811499
MYSTIC HOTEL INVESTORS, LLC, a Delaware limited liability company
By:
Name:
Address:
Tax ID #:

Signature Page to Supplemental Limited Joinder

Executed as of February _____, 2006
NET WORTH GUARANTORS:
HERSHA HOSPITALITY LIMITED
PARTNERSHIP, a Virginia limited partnership
By:
Name:
Address:
Tax ID #:
MYSTIC HOTEL INVESTORS, LLC, a Delaware limited liability company
By:	/s/ Glenn A. Jette
Name:		Glenn A. Jette
Address:			914 Hartford Turnpike
			Waterford, CT 06385
Tax ID #:				06-1547126

Signature Page to Supplemental Limited Joinder