Common use of Franchise Agreement Clause in Contracts

Franchise Agreement. The Parties acknowledge and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for a new franchise agreement for the operation of the Hotel under a hotel brand owned by Franchisor (the “New Franchise Agreement”), which New Franchise Agreement (including the PIP required thereunder) shall be in form and substance in all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status of the negotiations of the New Franchise Agreement.

Franchise Agreement. The Parties acknowledge Seller has entered into a (the “Existing Franchise Agreement”) with Hilton Hotels (the “Franchisor”) governing the use of the Hotel as a Homewood Suites by Hilton (the “Brand”). At the Closing, Buyer and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for Franchisor shall enter into a new franchise agreement agreement, effective as of the Closing Date, replacing the Existing Franchise Agreement and containing terms and conditions acceptable to Buyer. Buyer shall be responsible for the payment and completion of any Franchisor mandated product improvement plan. If Buyer pays the cost for the product improvement plan report (the “PIP Fee”), then, in the event this Contract is terminated and Closing does not occur (other than by reason of Buyer’s default), Seller shall reimburse Buyer for the PIP Fee. Seller and the Franchisor shall terminate the Existing Franchise Agreement, as of the Closing Date, and Buyer shall be solely responsible for all claims and liabilities arising thereunder. Seller and Buyer shall use all commercially reasonable efforts to obtain a release of Seller and any other guarantors as described in Section 5.2(d) above. Buyer agrees to apply for and use reasonable efforts, and Seller shall cooperate with Buyer, to obtain the new franchise agreement, together with the assignment to Buyer of all waivers of any brand standard necessary or appropriate for the operation of the Hotel under the Brand. It shall be a hotel brand owned by condition to Closing for Buyer and Seller that the Franchisor provide the foregoing consent; provided, however, that Buyer shall not be entitled, as a condition to Closing, to require amendments to the Existing Franchise Agreement (or to require a new franchise agreement (the “New Franchise Agreement”), which New ) that contains economic terms more favorable to the owner or franchisee than the economic terms of the Existing Franchise Agreement or that differ in any other material respect from the form of franchise agreement which Buyer and Franchisor have negotiated previously as their standard form of franchise agreement (including to the PIP required thereunder) extent such standard forms are applicable under the circumstances). Buyer shall be in form and substance in responsible for all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior costs related to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that termination of the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status execution of a new franchise agreement, including but not limited to, the negotiations payment of license, application, transfer and similar fees thereunder. Seller shall use best efforts to promptly provide all information required by the New Franchise AgreementFranchisor in connection with each such new franchise agreement, and Seller and Buyer shall diligently pursue obtaining each the same.

Franchise Agreement. The Parties acknowledge and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for a new franchise agreement for the operation of the Hotel under a hotel brand owned by Franchisor Within five (the “New Franchise Agreement”), which New Franchise Agreement (including the PIP required thereunder5) shall be in form and substance in all respects acceptable to and approved by Lessee JV. Prior to or immediately following Business Days after the Effective Date, Lessee JV Purchaser shall submit its application and $50,000 application fee to Existing Franchisor for approval of Lessee JV Purchaser as its new franchisee at the Hotel (“Franchise Approval”) pursuant to a New Franchise AgreementAgreement (as defined below), and shall contemporaneously provide a true, correct and complete copy thereof to Seller which may be partially redacted due to confidentiality concerns (together, thereafter, with any other correspondence and documentation from Existing Franchisor) and shall comply with all other requirements pursuant to the Existing Franchise Agreement (as defined below) in connection with Franchise Approval (and shall provide evidence thereof to Seller). Hersha Owner and Hersha Lessee agree Seller agrees to reasonably cooperate in a commercially reasonable manner with and assist Lessee JV Purchaser in its pursuit of Franchise Approval. Anything herein to the contrary notwithstanding, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be is not a condition to Hersha Owner’s and Hersha LesseePurchaser’s obligation to close and Owner JV(although Seller’s and Lessee JVrelease from its Existing Franchise Agreement without material cost to Seller is a condition to Seller’s obligation to close. Owner JV ); provided, however, Purchaser acknowledges and Lessee JV shall use diligent good faith efforts agrees that provided it has complied with its obligations herein to seek and obtain the Franchise Approval, Purchaser’s sole remedy in the event it does not secure Franchise Approval by no later than sixty (60) days after Existing Franchisor’s deemed receipt of the application, application fee and any other requirements to Franchise Approval required by Existing Franchisor, which date can be extended for an additional thirty (30) days at Purchaser’s written request to Seller in the event of no definitive approval or disapproval from Existing Franchisor (provided it has otherwise extended the Closing in accordance with Section 6.1(a) herein, including by delivering any Extension Deposit to Escrow Agent), but solely to obtain Franchise Approval (the “Franchisor Response Date”), shall be to terminate this Agreement on the earlier to occur of within five (5) Business Days after the earlier of: (i) the Franchisor Response Date or (ii) Existing Franchisor delivers notice categorically denying Franchise Approval (the “Franchisor Disapproval Termination Date”). Notwithstanding anything contained herein, Purchaser acknowledges that, except as otherwise expressly set forth in this Agreement, it shall only have the right to terminate this Agreement after the expiration of the Due Diligence Period and receive a return of the Deposit based solely on the failure of the Existing Franchisor to approve the New Franchise Agreement pursuant to this paragraph; provided, however, that Purchaser shall have provided the application, application fee and all other requested information to Existing Franchisor within all required timeframes. Should Purchaser not terminate this Agreement and Purchaser fails to obtain the approval of Existing Franchisor for a new franchise agreement for the Hotel for the same flag or brand (the “New Franchise Agreement”) by no later than fifteen (15) days prior to the Franchisor Disapproval Termination Date, then, at Seller’s sole option, the Closing Datemay nonetheless occur, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with in such Franchise Approval, it event Purchaser shall be a condition to Hersha Ownerresponsible for all termination fees, liquidated and other damages payable under Seller’s obligation to close that the currently-existing license franchise agreement between Hersha Lessee and with Existing Franchisor (the “Existing Franchise Agreement”) and Purchaser shall have been terminated without material cost to Hersha Owner or Hersha Lesseeperform all de-identification obligations under the Existing Franchise Agreement (the “De-Identification Obligations”), and Hersha Owner, Hersha Lessee Purchaser shall be responsible for any and any guarantors all De-Identification Obligations regardless of whether or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status of the negotiations of not Purchaser enters into the New Franchise Agreement or otherwise continues a franchise arrangement with Existing Franchisor or enters into a new agreement with another franchisor. Seller agrees to indemnify and hold Purchaser harmless for any claims brought by Existing Franchisor pursuant to the Seller’s obligations under the Existing Franchise Agreement, which relate to and arise from its obligations prior to the Closing.

Franchise Agreement. If we have approved the site, we will offer you a franchise to operate a WOB Tavern at the proposed site by delivering to you a Franchise Agreement in a form ready for signing by you. The Parties acknowledge and agree Franchise Agreement will be the standard form of Franchise Agreement we are then using to grant franchises for WOB Taverns, except that the transactions Franchise Fee will be reduced to $45,000 if the Tavern is your second or a subsequent Tavern being developed under this Agreement. The Franchise Fee for each Tavern must be paid on the date of the Franchise Agreement for that Tavern, but consistent with Section 5 above. Within 30 days after your receipt of the Franchise Agreement, you must: (a) sign and deliver such Franchise Agreement, together with any ancillary agreements required by the Franchise Agreement, to us and (b) pay us the applicable then-current Franchise Fee required by the Franchise Agreement, but consistent with Section 5 above. If you do not timely sign and return such Franchise Agreement and tender payment of the Franchise Fee, we may revoke our offer to grant you a franchise to operate a Tavern at such proposed site. Contemporaneously with the signing of the Franchise Agreement, each of your direct or indirect owners must sign and deliver to us a Principal Owner’s Guaranty in the form attached to the Franchise Agreement. You understand that any obligation or liability you incur with respect to the proposed Tavern or location before we have approved it in writing and countersigned the Franchise Agreement is at your sole risk and will be your sole responsibility. We will be under no obligation to execute and deliver a Franchise Agreement unless you have complied in a timely manner with all of the terms and conditions of this Agreement and satisfied all requirements set forth herein to the execution of the Franchise Agreement. In addition, we will be under no obligation to execute a Franchise Agreement if you are in breach or default of any other Franchise Agreement, Area Development Agreement, or any other agreement between you and us. If any Franchise Agreement contemplated by this Agreement are contingent upon Lessee JV obtaining approval for a new franchise agreement for the operation of the Hotel under a hotel brand owned is executed by Franchisor (the “New Franchise Agreement”)us, which New Franchise it will supersede this Agreement (including the PIP required thereunder) shall be in form and substance in all respects acceptable to and approved by Lessee JV. Prior to or immediately following govern the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at relationship between the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate parties with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior respect to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with Tavern that is the subject matter of such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status of the negotiations of the New Franchise Agreement.

Franchise Agreement. The Parties acknowledge and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for a new franchise agreement for the operation of the Hotel under a hotel brand owned by Franchisor (the “New Franchise Agreement”), which New Franchise Agreement (including the PIP required thereunder) shall be in form and substance in all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a 24 condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status of the negotiations of the New Franchise Agreement.

Franchise Agreement. The Parties acknowledge and agree that the transactions contemplated by So long as Purchaser complies with its obligations set forth in this Agreement are contingent upon Lessee JV obtaining approval for a new franchise agreement for the operation of the Hotel under a hotel brand owned by Franchisor (the “New Franchise Agreement”), which New Franchise Agreement (including the PIP required thereunder) shall be in form and substance in all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise ApprovalSection 4.9, it shall be a condition to Hersha OwnerPurchaser’s obligation to close Closing that Franchisor shall have entered into a new hotel franchise agreement with Purchaser or its designee on the existing form included in Franchisor’s current Franchise Disclosure Document (“FDD”) modified to give Purchaser the benefit of Seller’s license fee and area of protection terms (subject to Purchaser’s compliance with Section 11.2.2 of the Franchise Agreement) and reserve fund obligations that are set forth in the Franchise Agreement, the agreed property improvement plan (aka “PIP”) (PIP dated September 3, 2015) and such other commercially reasonable changes requested by Purchaser to the form franchise agreement between Hersha Lessee and Franchisor included in the FDD (the “Existing Material Franchise Terms”); provided, however, only those commercially reasonable changes that are consistent with the terms of the most recent franchise agreement between Franchisor and Purchaser or Affiliates of Purchaser shall be considered Material Franchise Terms for purposes of this Agreement. Franchisor’s written confirmation (or its customary equivalent) to, at Closing, enter into such franchise agreement with Purchaser upon the Material Franchise Terms, shall be referred to herein as the “Franchisor Approval”. Promptly after the Effective Date (and not later than three (3) Business Days), Purchaser shall file its application for a new franchise agreement with Franchisor and together therewith pay all required application fees. Purchaser shall use commercially reasonable efforts to pursue and negotiate in good faith the Franchisor Approval with Franchisor on or before expiration of the Inspection Period. Notwithstanding anything in this Agreement to the contrary, if the Franchisor Approval has not been granted by the expiration of the Inspection Period, Purchaser may elect to extend the Inspection Period for up to an additional five (5) Business Days, for the sole purpose allowing Purchaser to obtain Franchisor Approval and for no other reason whatsoever, by delivering written notice to Seller of such election (the “Extension Notice”) prior to the expiration of the Inspection Period (provided, however, in no event shall such extension of the Inspection Period grant Purchaser the right to terminate this Agreement for any reason other than for Franchisor’s failure or refusal to issue a Franchisor Approval). Seller acknowledges that as of the Effective Date, Purchaser has not received the Franchisor Approval and that Purchaser has timely delivered to Seller the Extension Notice and properly exercised its right to extend the Inspection Period as described in the previous sentence. If Purchaser does not deliver a written notice to Seller prior to 5:00 p.m. Dallas, Texas time on the fifth (5th) Business Day following the expiration of the Inspection Period informing Seller that despite Purchaser’s commercially reasonable efforts to obtain the Franchisor Approval, the Franchisor Approval has not been obtained and in connection therewith Purchaser is electing to terminate this Agreement pursuant to this Section 4.9 (the “Franchise Termination Notice”), then Purchaser shall be deemed to have fully and knowingly waived any right to terminate this Agreement pursuant to this Section 4.9 and thereafter the Deposit shall be non-refundable to Purchaser except as otherwise expressly provided in this Agreement. Upon receipt by Seller and the Escrow Company of such Franchise Termination Notice, (a) this Agreement shall automatically terminate, (b) the parties shall have been terminated without material no further obligations to or recourse against each other (except for the Surviving Obligations) and (c) the Escrow Company shall within one (1) Business Day of its confirmation of Seller’s receipt of the Franchise Termination Notice return to Purchaser the Deposit. Purchaser expressly acknowledges that (a) Seller has entered into this Agreement on the basis that no termination costs, fees or expenses or liquidated damages shall be payable by Seller as a result of the sale of the Property to Purchaser as a result of Purchaser or its designee (at Purchaser’s sole cost and expense) so entering into a new hotel franchise agreement with Franchisor for the Hotel and, (b) Seller must receive a written release from Franchisor, on Franchisor’s current standard form, of any obligations of Seller or any of its Affiliates under the Franchise Agreement first arising from and after Closing (including pursuant to Hersha Owner any guaranties from Seller or Hersha Lesseeany of its Affiliates pursuant to the Franchise Agreement but expressly excluding any amounts due and owing (or otherwise incurred or accrued) prior to the Closing Date other than any liquidated damages). If Closing occurs and Purchaser or its designee has not so entered into a new hotel franchise agreement with Franchisor as set forth above (and Seller has not obtained a release of Seller and its Affiliates as set forth above), in each case, such that no termination fees, liquidated damages or similar fees and penalties are payable by Seller or any of its Affiliates (including Seller or any entity owning a beneficial interest in Seller in its capacity as a guarantor or otherwise) as a result of the sale of the Property to Purchaser, then Purchaser shall be responsible for, and Hersha Ownershall save, Hersha Lessee protect, defend, indemnify and hold Seller (and any guarantors or co-obligors shall have been expressly released Affiliate of Seller) harmless from any further obligations such termination fees, liquidated damages or liability thereunder. Hersha Owner similar costs, fees and Hersha Lessee shall have penalties in connection with the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status termination of the negotiations Franchise Agreement as of the New Franchise AgreementClosing and any other Liabilities of Seller had the release of Seller and its Affiliates as set forth above been obtained. The provisions of this Section 4.9 shall survive the Closing.

Franchise Agreement. The Parties acknowledge Improvements on the Properties shall be operated under the terms and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for a new franchise agreement for the operation conditions of the Hotel Franchise Agreements. Borrower shall, or shall cause Mortgage Borrower to, or cause Operating Tenant to, (i) pay all sums required to be paid by Mortgage Borrower under a hotel brand owned by Franchisor (the “New Franchise Agreement”), which New (ii) diligently perform, observe and enforce all of the material terms, covenants and conditions of the Franchise Agreement (including on the PIP required thereunder) part of Mortgage Borrower or Operating Tenant to be performed, observed and enforced to the end that all things shall be done which are necessary to keep unimpaired the rights of Mortgage Borrower and Operating Tenant under the Franchise Agreement, (iii) promptly notify Lender of the giving of any notice to Mortgage Borrower or Operating Tenant of any default by Mortgage Borrower or Operating Tenant in form the performance or observance of any of the terms, covenants or conditions of the Franchise Agreement on the part of Mortgage Borrower or Operating Tenant to be performed and substance in all respects acceptable observed and deliver to Lender a true copy of each such notice, and approved (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditure plan, material notice, report and estimate received by Lessee JV. Prior to or immediately following it under the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner Neither Borrower nor Mortgage Borrower shall cause Operating Tenant to, without the prior consent of Lender, surrender the Franchise Agreement or terminate or cancel the Franchise Agreement or modify, change, supplement, alter or amend the Franchise Agreement, in any material respect, either orally or in writing. Notwithstanding the foregoing, Borrower or Operating Tenant may terminate a Franchise Agreement provided that Borrower simultaneously enters into a Replacement Franchise Agreement with a Qualified Franchisor. Subject to the rights of Mortgage Lender, if Mortgage Borrower or Operating Tenant shall default in the performance or observance of any material term, covenant or condition of the Franchise Agreement on the part of Mortgage Borrower or Operating Tenant to be performed or observed, then, without limiting the generality of the other provisions of this Agreement, and Hersha Lessee agree without waiving or releasing Borrower from any of its obligations hereunder, Borrower shall permit Lender to reasonably cooperate with pay any sums and assist Lessee JV in its pursuit to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of the Franchise ApprovalAgreement on the part of Mortgage Borrower or Operating Tenant to be performed or observed to be promptly performed or observed on behalf of Mortgage Borrower or Operating Tenant, at no material cost to Hersha Owner or Hersha Lessee. the end that the rights of Mortgage Borrower and Operating Tenant in, to and under the Franchise Approval Agreement shall be a condition to Hersha Owner’s kept unimpaired and Hersha Lessee’s free from default; provided, however, that Lender shall have no such obligation to close perform any such action. Borrower shall cause Lender and Owner JV’s any Person designated by Lender shall have, and Lessee JV’s obligation are hereby granted, the right to closeenter upon the Properties at any time and from time to time for the purpose of taking any such action. Owner JV If Franchisor shall deliver to Lender a copy of any notice sent to Borrower and Lessee JV Mortgage Borrower or Operating Tenant of default under the Franchise Agreement, such notice shall constitute full protection to Lender for any action taken or omitted to be taken by Lender in good faith, in reliance thereon. Borrower shall cause Mortgage Borrower, or shall cause Operating Tenant, from time to time, use diligent good faith its commercially reasonable efforts to obtain from Franchisor such certificates of estoppel with respect to compliance by Mortgage Borrower and Operating Tenant with the terms of the Franchise Approval no later than fifteen (15) days Agreement as may be requested by Lender. Borrower shall cause Mortgage Borrower and Operating Tenant shall exercise each individual option, if any, to extend or renew the term of the Franchise Agreement upon demand by Lender made at any time prior to or within the Closing Dateperiod in which any such option may be exercised, and Owner JV and Lessee JV provided, however that Borrower shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection not be required to comply with such request of Lender so long as Borrower is entering into a Replacement Franchise ApprovalAgreement, it the term of which shall begin upon the expiration of the Franchise Agreement currently in effect at the time of Lender’s request. Any sums expended by Lender pursuant to this paragraph shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Lender, shall be deemed to constitute a condition to Hersha Owner’s obligation to close that portion of the existing license agreement between Hersha Lessee and Franchisor (Debt, shall be secured by the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have lien of the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Pledge Agreement and the status of the negotiations of the New Franchise Agreementother Loan Documents and shall be immediately due and payable upon demand by Lender therefor.

Franchise Agreement. The Parties acknowledge and agree that Promptly following the transactions contemplated execution of this Agreement, Purchaser shall contact Franchisor to obtain approval by this Franchisor (“Franchisor Approval”) to a transfer of the Franchise Agreement are contingent upon Lessee JV obtaining approval for or issuance by Franchisor of a new franchise agreement for the operation of the Hotel under a hotel brand owned by Franchisor or license agreement to Purchaser (the “New Franchise Agreement”), which . Purchaser acknowledges and agrees that: (a) Purchaser shall be responsible for the payment of: (i) all fees and costs related to the assumption of the Franchise Agreement or issuance of a New Franchise Agreement (including the PIP required thereunder) shall be in form and substance in all respects acceptable to and approved by Lessee JV. Prior to without limitation any termination fee or immediately following the Effective Date, Lessee JV shall submit its application and application assignment fee that is payable to Franchisor for approval of Lessee JV pursuant to the existing Franchise Agreement - whether Seller is required to transfer the Franchise Agreement to Purchaser or if Purchaser is not approved as its new a franchisee at the Hotel (“Franchise Approval”) pursuant or issued a New Franchise Agreement. Hersha Owner Agreement by Franchisor); (ii) all amounts due to Franchisor in connection with the operation of the Hotel under the Franchise Agreement or New Franchise Agreement accruing or arising from and Hersha Lessee agree after Closing, including, for example, all royalties due and payable from and after Closing; and (iii) all costs in connection with any property improvement plans with Franchisor. (b) Purchaser shall provide to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise ApprovalSeller, at no or prior to Closing, written confirmation from Franchisor that Seller and Seller’s guarantor(s) (if any) under the Franchise Agreement have been released from all liability under the Franchise Agreement accruing subsequent to Closing, such documentation reflecting the same shall be subject to Seller’s reasonable approval. (c) Notwithstanding the foregoing, to the extent Purchaser's obligations in connection with any property improvement plan with Franchisor under the Franchise Agreement or any New Franchise Agreement during the first twelve months following closing exceed $500 per guest room, such excess amount shall be credited to Purchaser against the Purchase Price at Closing. (d) Seller shall use its best efforts in cooperation with Purchaser in Purchaser’s efforts to obtain Franchisor’s agreement to incorporate into the Franchise Agreement (to the extent Purchaser’s assumption thereof is approved by Franchisor) or any New Franchise Agreement, the material cost terms of the addendum to Hersha Owner or Hersha LesseeSeller’s Franchise Agreement attached hereto as Schedule 2.4, concerning reductions in franchise and marketing fees (the “Franchise Fee Reductions”). Notwithstanding the foregoing, Purchaser acknowledges that (i) the Franchisor may elect to grant Franchise Approval shall be a condition without agreeing to Hersha Ownerincorporate the Franchise Fee Reductions into the Franchise Agreement or New Franchise Agreement, as applicable, following Closing; and (ii) Purchaser’s and Hersha Lesseeobligations hereunder (including Purchaser’s obligation to close and Owner JV’s and Lessee JV’s obligation Close on the Property) are not subject or conditioned upon the agreement by the Franchisor to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain incorporate the Franchise Approval no later than fifteen (15) days prior to Fee Reductions into the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner Agreement or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status of the negotiations of the New Franchise Agreement, as applicable, following Closing. (e) This provision shall survive Closing or the termination of this Agreement.

Franchise Agreement. The Parties acknowledge Seller has entered into the Existing Franchise Agreement with Marriott International, Inc. or an affiliate thereof (the “Franchisor”) governing the use of the Hotel as a Hampton Inn (the “Brand”). At the Closing, Buyer and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for Franchisor shall enter into a new franchise agreement agreement, effective as of the Closing Date, replacing the Existing Franchise Agreement and containing terms and conditions acceptable to Buyer. Buyer shall be responsible for the payment and completion of any Franchisor mandated product improvement plan. If Buyer pays the cost for the product improvement plan report (the “PIP Fee”), then, in the event this Contract is terminated and Closing does not occur (other than by reason of Buyer’s default), Seller shall reimburse Buyer for the PIP Fee. Seller and the Franchisor shall terminate the Existing Franchise Agreement, as of the Closing Date, and Buyer shall be solely responsible for all claims and liabilities arising thereunder. Seller and Buyer shall use all commercially reasonable efforts to obtain a release of Seller and any other guarantors as described in Section 5.2(d) above. Buyer agrees to apply for and use reasonable efforts, and Seller shall cooperate with Buyer, to obtain the new franchise agreement, together with the assignment to Buyer of all waivers of any brand standard necessary or appropriate for the operation of the Hotel under the Brand. It shall be a hotel brand owned by condition to Closing for Buyer and Seller that the Franchisor provide the foregoing consent; provided, however, that Buyer shall not be entitled, as a condition to Closing, to require amendments to the Existing Franchise Agreement (or to require a new franchise agreement (the “New Franchise Agreement”), which New ) that contains economic terms more favorable to the owner or franchisee than the economic terms of the Existing Franchise Agreement or that differ in any other material respect from the form of franchise agreement which Buyer and Franchisor have negotiated previously as their standard form of franchise agreement (including to the PIP required thereunder) extent such standard forms are applicable under the circumstances). Buyer shall be in form and substance in responsible for all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior costs related to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that termination of the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status execution of a new franchise agreement, including but not limited to, the negotiations payment of license, application, transfer and similar fees thereunder. Seller shall use best efforts to promptly provide all information required by the New Franchise AgreementFranchisor in connection with each such new franchise agreement, and Seller and Buyer shall diligently pursue obtaining each the same.

Franchise Agreement. The Parties acknowledge and agree (a) Purchaser acknowledges that the transactions contemplated by this Franchise Agreement are contingent upon Lessee JV obtaining approval for provides that, in the event of a new franchise agreement for the operation proposed sale or lease of the Hotel under Hotel, Franchisor shall have a hotel brand owned by Franchisor (the “New Franchise Agreement”), which New Franchise Agreement (including the PIP required thereunder) shall be in form and substance in all respects acceptable to and approved by Lessee JVright of first offer with respect thereto. Prior to or immediately Promptly following the Effective Date, Lessee JV Seller shall submit use commercially reasonable efforts to obtain Franchisor’s waiver of such right. If Franchisor asserts that it has the right to purchase the Hotel and notifies Seller that it intends to exercise its application right to purchase the Hotel, Seller shall so notify Purchaser within two (2) business days, this Agreement shall terminate, neither party to this Agreement shall thereafter have any further rights or liabilities under this Agreement except with respect to those provisions that specifically provide that they survive the termination of this Agreement, and application fee Escrow Agent shall return the E▇▇▇▇▇▇ Money to Purchaser and Purchaser shall be entitled to payment from Seller of (i) Purchaser’s actual third-party out of pocket due diligence costs, including outside legal fees, in connection with this transaction in an amount not to exceed Fifty Thousand Dollars ($50,000) and (ii) Purchaser’s actual non-refundable fees and costs paid by Seller to Franchisor in connection with obtaining a new license or franchise agreement for approval the Property, in an amount not to exceed Seventy Five Thousand Dollars ($75,000). If Franchisor exercises its right to purchase the Hotel, but fails to consummate the purchase, then Purchaser shall have the option (which may be exercised in Purchaser’s sole discretion within thirty (30) days after Purchaser’s receipt of Lessee JV notice that Franchisor has failed to consummate the purchase) to reinstate the effectiveness of this Agreement and to complete the purchase of the Hotel, in which case the date of reinstatement shall become the new Effective Date. (b) Purchaser shall promptly and in good faith seek to obtain a new license or franchise agreement from Franchisor or from another hotel franchisor (“Other Franchisor”), or to assume the existing Franchise Agreement from the Franchisor, in accordance with all applicable provisions of the Franchise Agreement, including without limitation providing such financial and other information regarding Purchaser as its may be reasonably required by the Franchisor or by the Other Franchisor, as appropriate. In connection therewith, Seller shall, at no cost to Seller, cooperate in all reasonable respects with Purchaser in connection with such application for a new franchisee at license or franchise agreement or for the assumption of the existing Franchise Agreement. At Seller’s expense, Seller has caused Franchisor to inspect the Hotel and issue a property improvement plan which identifies improvements necessary to maintain a franchise agreement with Franchisor upon a sale of the Hotel (the “Franchise ApprovalPIP”) pursuant a New Franchise Agreement). Hersha Owner Purchaser acknowledges and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval agrees that it shall be a condition to Hersha Owner’s and Hersha LesseePurchaser’s obligation to close diligently pursue a transfer of the Franchise Agreement or a new license or franchise agreement for the Hotel from Franchisor or an Other Franchisor. Purchaser shall pay all application fees, transfer fees and Owner JV’s similar amounts as may be required by Franchisor or by such Other Franchisor, as appropriate, in connection with the issuance of a new license or franchise agreement to Purchaser or the assumption of the existing Franchise Agreement by Purchaser; provided, however, that Seller shall pay any and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior all termination fees or termination costs relating to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) , if any. Seller shall have been terminated without material cost no obligation with respect to Hersha Owner the PIP or Hersha Lesseeother work requirement agreed to by Purchaser. (c) Notwithstanding anything to the contrary set forth in Section 4.11(b), and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee Purchaser shall have the right not to assume the existing Franchise Agreement or not to obtain a new license or franchise agreement from Franchisor or an Other Franchisor, as applicable. (d) If Purchaser shall neither assume the Franchise Agreement nor obtain a new license or franchise agreement from Franchisor, then at all times the Closing, Seller shall be entitled to contact remove from the Property and return to Franchisor in order to confirm that Lessee JV is complying accordance with its obligations under this the Franchise Agreement and the status all items of personal property marked with Franchisor’s name or other marks, such items shall not be a part of the negotiations Purchased Assets and Purchaser shall receive no credit against the Purchase Price as a result of the New Franchise Agreementremoval of such items from the Property.

Franchise Agreement. The Parties acknowledge Seller has entered into the Existing Franchise Agreement with Marriott International, Inc. or an affiliate thereof (the “Franchisor”) governing the use of the Hotel as a Courtyard by Marriott (the “Brand”). At the Closing, Buyer and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for Franchisor shall enter into a new franchise agreement agreement, effective as of the Closing Date, replacing the Existing Franchise Agreement and containing terms and conditions acceptable to Buyer. Buyer shall be responsible for the payment and completion of any Franchisor mandated product improvement plan. If Buyer pays the cost for the product improvement plan report (the “PIP Fee”), then, in the event this Contract is terminated and Closing does not occur (other than by reason of Buyer’s default), Seller shall reimburse Buyer for the PIP Fee. Seller and the Franchisor shall terminate the Existing Franchise Agreement, as of the Closing Date, and Buyer shall be solely responsible for all claims and liabilities arising thereunder. Seller and Buyer shall use all commercially reasonable efforts to obtain a release of Seller and any other guarantors as described in Section 5.2(d) above. Buyer agrees to apply for and use reasonable efforts, and Seller shall cooperate with Buyer, to obtain the new franchise agreement, together with the assignment to Buyer of all waivers of any brand standard necessary or appropriate for the operation of the Hotel under the Brand. It shall be a hotel brand owned by condition to Closing for Buyer and Seller that the Franchisor provide the foregoing consent; provided, however, that Buyer shall not be entitled, as a condition to Closing, to require amendments to the Existing Franchise Agreement (or to require a new franchise agreement (the “New Franchise Agreement”), which New ) that contains economic terms more favorable to the owner or franchisee than the economic terms of the Existing Franchise Agreement or that differ in any other material respect from the form of franchise agreement which Buyer and Franchisor have negotiated previously as their standard form of franchise agreement (including to the PIP required thereunder) extent such standard forms are applicable under the circumstances). Buyer shall be in form and substance in responsible for all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior costs related to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that termination of the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status execution of a new franchise agreement, including but not limited to, the negotiations payment of license, application, transfer and similar fees thereunder. Seller shall use best efforts to promptly provide all information required by the New Franchise AgreementFranchisor in connection with each such new franchise agreement, and Seller and Buyer shall diligently pursue obtaining each the same.

Franchise Agreement. The Parties acknowledge Seller has entered into a (the “Existing Franchise Agreement”) with Hilton Hotels (the “Franchisor”) governing the use of the Hotel as a Hilton Garden Inn (the “Brand”). At the Closing, Buyer and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for Franchisor shall enter into a new franchise agreement agreement, effective as of the Closing Date, replacing the Existing Franchise Agreement and containing terms and conditions acceptable to Buyer. Buyer shall be responsible for the payment and completion of any Franchisor mandated product improvement plan. If Buyer pays the cost for the product improvement plan report (the “PIP Fee”), then, in the event this Contract is terminated and Closing does not occur (other than by reason of Buyer’s default), Seller shall reimburse Buyer for the PIP Fee. Seller and the Franchisor shall terminate the Existing Franchise Agreement, as of the Closing Date, and Buyer shall be solely responsible for all claims and liabilities arising thereunder. Seller and Buyer shall use all commercially reasonable efforts to obtain a release of Seller and any other guarantors as described in Section 5.2(d) above. Buyer agrees to apply for and use reasonable efforts, and Seller shall cooperate with Buyer, to obtain the new franchise agreement, together with the assignment to Buyer of all waivers of any brand standard necessary or appropriate for the operation of the Hotel under the Brand. It shall be a hotel brand owned by condition to Closing for Buyer and Seller that the Franchisor provide the foregoing consent; provided, however, that Buyer shall not be entitled, as a condition to Closing, to require amendments to the Existing Franchise Agreement (or to require a new franchise agreement (the “New Franchise Agreement”), which New ) that contains economic terms more favorable to the owner or franchisee than the economic terms of the Existing Franchise Agreement or that differ in any other material respect from the form of franchise agreement which Buyer and Franchisor have negotiated previously as their standard form of franchise agreement (including to the PIP required thereunder) extent such standard forms are applicable under the circumstances). Buyer shall be in form and substance in responsible for all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior costs related to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that termination of the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status execution of a new franchise agreement, including but not limited to, the negotiations payment of license, application, transfer and similar fees thereunder. Seller shall use best efforts to promptly provide all information required by the New Franchise AgreementFranchisor in connection with each such new franchise agreement, and Seller and Buyer shall diligently pursue obtaining each the same.

Franchise Agreement. The Parties acknowledge Seller has entered into the Existing Franchise Agreement with Hilton Hotels Corp. or an affiliate thereof (the “Franchisor”) governing the use of the Hotel as a Hilton Garden Inn (the “Brand”). At the Closing, Buyer and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for Franchisor shall enter into a new franchise agreement agreement, effective as of the Closing Date, replacing the Existing Franchise Agreement and containing terms and conditions acceptable to Buyer. Buyer shall be responsible for the payment and completion of any Franchisor mandated product improvement plan. If Buyer pays the cost for the product improvement plan report (the “PIP Fee”), then, in the event this Contract is terminated and Closing does not occur (other than by reason of Buyer’s default), Seller shall reimburse Buyer for the PIP Fee. Seller and the Franchisor shall terminate the Existing Franchise Agreement, as of the Closing Date, and Buyer shall be solely responsible for all claims and liabilities arising thereunder. Seller and Buyer shall use all commercially reasonable efforts to obtain a release of Seller and any other guarantors as described in Section 5.2(d) above. Buyer agrees to apply for and use reasonable efforts, and Seller shall cooperate with Buyer, to obtain the new franchise agreement, together with the assignment to Buyer of all waivers of any brand standard necessary or appropriate for the operation of the Hotel under the Brand. It shall be a hotel brand owned by condition to Closing for Buyer and Seller that the Franchisor provide the foregoing consent; provided, however, that Buyer shall not be entitled, as a condition to Closing, to require amendments to the Existing Franchise Agreement (or to require a new franchise agreement (the “New Franchise Agreement”), which New ) that contains economic terms more favorable to the owner or franchisee than the economic terms of the Existing Franchise Agreement or that differ in any other material respect from the form of franchise agreement which Buyer and Franchisor have negotiated previously as their standard form of franchise agreement (including to the PIP required thereunder) extent such standard forms are applicable under the circumstances). Buyer shall be in form and substance in responsible for all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior costs related to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that termination of the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status execution of a new franchise agreement, including but not limited to, the negotiations payment of license, application, transfer and similar fees thereunder. Seller shall use best efforts to promptly provide all information required by the New Franchise AgreementFranchisor in connection with each such new franchise agreement, and Seller and Buyer shall diligently pursue obtaining each the same.

Franchise Agreement. The Parties acknowledge Improvements on the Properties shall be operated under the terms and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for a new franchise agreement for the operation conditions of the Hotel Franchise Agreements. Borrower shall cause Mortgage Borrower to (i) pay all sums required to be paid by Mortgage Borrower under a hotel brand owned by Franchisor (the “New Franchise Agreement”), which New (ii) diligently perform, observe and enforce all of the terms, covenants and conditions of the Franchise Agreement (including on the PIP required thereunder) part of Mortgage Borrower to be performed, observed and enforced to the end that all things shall be done which are necessary to keep unimpaired the rights of Mortgage Borrower under the Franchise Agreement, (iii) promptly notify Lender of the giving of any notice to Borrower or Mortgage Borrower of any default by Mortgage Borrower in form the performance or observance of any of the terms, covenants or conditions of the Franchise Agreement on the part of Mortgage Borrower to be performed and substance in all respects acceptable observed and deliver to Lender a true copy of each such notice, and approved (iv) if applicable, promptly deliver to Lender a copy of each financial statement, business plan, capital expenditure plan, notice, report and estimate received by Lessee JV. Prior to or immediately following it under the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner Borrower shall cause Mortgage Borrower not to, without the prior consent of Lender, surrender the Franchise Agreement or terminate or cancel the Franchise Agreement or modify, change, supplement, alter or amend the Franchise Agreement, in any material respect, either orally or in writing, and Hersha Lessee agree Borrower hereby assigns to reasonably cooperate with Lender as further security for the payment of the Debt and assist Lessee JV for the performance and observance of the terms, covenants and conditions of this Agreement, all the rights and privileges of Mortgage Borrower to surrender the Franchise Agreement or to terminate, cancel, materially modify, change, supplement, alter or amend the Franchise Agreement in its pursuit any respect, and any such surrender of the Franchise ApprovalAgreement or termination, at no cancellation, material cost to Hersha Owner modification, change, supplement, alteration or Hersha Lessee. amendment of the Franchise Approval Agreement without the prior consent of Lender shall be a void and of no force and effect. Subject to the rights of Mortgage Lender, if Mortgage Borrower shall default in the performance or observance of any material term, covenant or condition of the Franchise Agreement on the part of Mortgage Borrower to Hersha Owner’s be performed or observed, then, without limiting the generality of the other provisions of this Agreement, and Hersha Lessee’s without waiving or releasing Borrower from any of its obligations hereunder, Borrower shall permit Lender to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of the Franchise Agreement on the part of Mortgage Borrower to be performed or observed to be promptly performed or observed on behalf of Mortgage Borrower, to the end that the rights of Mortgage Borrower in, to and under the Franchise Agreement shall be kept unimpaired and free from default; provided however, Lender shall have no such obligation to close perform any such action. Borrower shall cause Lender and Owner JV’s any Person designated by Lender to have the right to enter upon the Properties at any time and Lessee JV’s obligation from time to closetime for the purpose of taking any such action. Owner JV If Franchisor shall deliver to Lender a copy of any notice sent to Borrower and Lessee JV Mortgage Borrower of default under the Franchise Agreement, such notice shall constitute full protection to Lender for any action taken or omitted to be taken by Lender in good faith, in reliance thereon. Borrower shall cause Mortgage Borrower to, from time to time, use diligent good faith its best efforts to obtain from Franchisor such certificates of estoppel with respect to compliance by Mortgage Borrower with the terms of the Franchise Approval no later than fifteen Agreement as may be requested by Lender. Borrower shall cause Mortgage Borrower to exercise each individual option, if any, to extend or renew the term of the Franchise Agreement upon demand by Lender made at any time within one (151) days prior year of the last day upon which any such option may be exercised. Any sums expended by Lender pursuant to this paragraph shall bear interest at the Default Rate from the date such cost is incurred to the Closing Datedate of payment to Lender, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be deemed to constitute a condition to Hersha Owner’s obligation to close that portion of the existing license agreement between Hersha Lessee and Franchisor (Debt, shall be secured by the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have lien of the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Pledge Agreement and the status of the negotiations of the New Franchise Agreementother Loan Documents and shall be immediately due and payable upon demand by Lender therefor.

Franchise Agreement. The Parties acknowledge (a) Purchaser acknowledges and agree agrees that (i) the transactions contemplated Hotel is subject to that certain Amended and Restated License Agreement, effective as of February 1, 2002, as amended by this Agreement that certain First Amendment to Amended and Restated License Agreement, dated as of April 1, 2005, and as further amended by that certain Second Amendment to Amended and Restated License Agreement, dated and effective as of March 31, 2010 (as amended, the “Franchise Agreement”) by and between Seller and Radisson Hotels International, Inc., a Delaware corporation (“Franchisor”), (ii) with respect to the sale of the Property and the assignment of the Franchise Agreement, Purchaser and Seller are contingent upon Lessee JV obtaining required to abide by the terms of the Franchise Agreement, including without limitation, Section 11 of that agreement which governs transfers of the Hotel, (iii) Purchaser has advised Seller that Purchaser desires to continue to operate the Premises under the Radisson Hotel brand as a “System Hotel” (as defined in the Franchise Agreement), and (iv) notwithstanding the preceding clause (iii), Franchisor’s approval for of Purchaser as a new franchise agreement for licensee and/or the operation of the Hotel under the Franchise Agreement or replacement license is not a hotel brand owned condition to Purchaser’s obligations under this Agreement, including, without limitation, the obligation to purchase the Property. (b) Promptly after the Effective Date, Seller and Purchaser shall each notify Franchisor of the transaction contemplated by this Agreement and Purchaser shall submit an application on the form prescribed by Franchisor pursuant to the Franchise Agreement. Following receipt by Franchisor of such notice, Purchaser shall diligently take all commercially reasonable actions and promptly provide all information and documentation reasonably requested by Franchisor, and otherwise diligently pursue the consent of Franchisor to (i) the sale of the Property to Purchaser, and (ii) the approval of Purchaser as successor to Seller as owner of the Hotel. It is desired that, at Closing, Purchaser and Franchisor shall enter into a written agreement pursuant to which Purchaser shall assume the obligations of “Licensee” (as defined in the Franchise Agreement) under the Franchise Agreement, with any modifications thereto as may be reasonably acceptable to Purchaser (the “New Franchise AgreementLicense”), which New and (B) Seller and Franchisor shall enter into an agreement whereby Franchisor agrees that, at the Closing, Franchisor will terminate and release Seller from its obligations under the Franchise Agreement and any other documents executed in connection therewith to the extent accruing from and after Closing without payment of any penalty or termination amount (including Franchisor’s agreement to enter into a New License with Purchaser and to terminate the PIP required thereunder) Franchise Agreement and to release Seller from all obligations accruing from and after Closing is referred to herein collectively as the “Radisson Consent”), it being acknowledged and agreed that the Radisson Consent executed and delivered in substantially the form of Exhibit 16 attached hereto shall be deemed acceptable to each of Seller and Purchaser. Purchaser shall bear all costs and expenses of Purchaser and Franchisor in form connection with the attempted transfer of the Hotel to Purchaser under the Franchise Agreement, the Radisson Consent and substance the potential New License in favor of Purchaser including, without limitation, all application fees and costs, franchise fees and the reimbursement of Franchisor’s costs and expenses, provided that Purchaser shall have no liability for any other fees, costs or expenses accrued or payable by Seller prior to Closing in the ordinary course. (c) In the event that at any time prior to Closing, either party receives written notice (the “Denial Notice”) from Franchisor confirming that Franchisor will not approve the sale of the Hotel to Purchaser or enter into the New License with Purchaser, such party will promptly notify the other. In the event Franchisor issues a Denial Notice or the New License or the Radisson Consent shall not be obtained by the Scheduled Closing Date, (i) this Agreement shall remain in full force and effect without adjustment to the Purchase Price, and (ii) Seller shall terminate the Franchise Agreement and Purchaser shall (1) acquire the Hotel at Closing without the benefits or burdens of the Franchise Agreement, and (2) pay all termination fees due in connection with the termination (the “Termination Amounts”). (d) Seller agrees to cooperate in all reasonable respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV Purchaser in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha OwnerPurchaser’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain the Radisson Consent and the New License. Seller further agrees that, so long as (i) Purchaser proceeds diligently and in good faith in its efforts to enter into a New License, and (ii) Franchisor has confirmed in writing its willingness to approve Purchaser as a franchisee for the Hotel under terms consistent with this Agreement, then if Franchisor will not be able to enter into the New License for the Hotel until after the Closing, Seller will not terminate the Franchise Approval no later than fifteen Agreement until the effective date of the New License in order to permit the Hotel to continue to be operated as a “Radisson Hotel” during the period between the Closing Date and the date Purchaser and Franchisor enter into the New License (15the “Interim Period”); provided, however, that (A) Seller shall not be required to extend the termination date of the Franchise Agreement for the Hotel beyond the date which is twenty (20) days prior to following the Closing Date, and Owner JV (B) in the event that Purchaser is unable to obtain or enter into a New License prior to expiration of the Interim Period, Seller may elect in its sole discretion to terminate the Franchise Agreement effective at any time following expiration of the Interim Period and Lessee JV Purchaser shall provide Hersha Owner be liable for all Termination Amounts (and Lessee Owner if any such amounts are paid by Seller, Purchaser shall reimburse Seller for the Termination Amounts paid within 10 days following Seller’s written request). At Closing, Seller shall deliver to Purchaser a copy of Seller’s voluntary termination agreement with written notice immediately upon obtaining Franchisor or other evidence reasonably acceptable to Purchaser evidencing that, subject to the provisions of this Section 26(d), the Franchise ApprovalAgreement shall not be terminated until the end of the Interim Period. In connection with consideration of Seller’s agreement not to terminate the Franchise Agreement during the Interim Period, Purchaser shall indemnify Seller from and against any and all claims, losses, liabilities, costs and expenses (including without limitation reasonable attorneys’ fees) incurred by Seller and arising and accruing under the Franchise Agreement during the Interim Period (“Indemnified Claims”), other than any such Franchise ApprovalIndemnified Claims that are the result of the gross negligence or willful misconduct of Seller, it its agents, representatives or employees. The foregoing indemnity shall be a condition to Hersha Owner’s obligation to close that memorialized in indemnification agreement in the existing license agreement between Hersha Lessee and Franchisor form attached hereto as Exhibit 12 (the “Existing Franchise Indemnity Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, be entered into by Purchaser and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right Seller at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status of the negotiations of the New Franchise AgreementClosing.

Franchise Agreement. The Parties acknowledge and agree So long as Purchaser complies with its obligations set forth in this Section 4.8, it shall be a condition to Purchaser’s obligation to Closing that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for Franchisor shall have entered into a new hotel franchise agreement for the operation of the Hotel under a hotel brand owned by Franchisor (the “New Franchise Agreement”) with Purchaser or its designee on the form included in Franchisor’s current Franchise Disclosure Document (“FDD”) modified to (i) give Purchaser the benefit of Seller’s license fee and area of protection terms (subject to Purchaser’s compliance with Section 11.2.2 of the Franchise Agreement) and reserve fund obligations that are set forth in the Franchise Agreement, (ii) confirm that no PIP is required by Franchisor in connection with Purchaser’s acquisition of the Property and (iii) such other commercially reasonable changes requested by Purchaser to the form franchise agreement included in the FDD (the “Material Franchise Terms”); provided, which however, only those commercially reasonable changes that are consistent with the terms of the most recent franchise agreement between Franchisor and Purchaser or Affiliates of Purchaser shall be considered Material Franchise Terms for purposes of this Agreement. Notwithstanding the foregoing, Seller shall use commercially reasonable efforts (without any obligation to incur any out-of-pocket expenses) to cause the New Franchise Agreement (including the PIP required thereunder) to include a provision providing that all permitted transferees thereunder shall be in form and substance in all respects acceptable entitled to and approved assume the unamortized Key Money such that no unamortized Key Money would be due upon any transfer by Lessee JVPurchaser or any future transfers provided the permitted transferee assumes the unamortized portion (the “Key Money Provision”). Notwithstanding the foregoing, the Key Money Provision shall not be considered a Material Franchise Term or a closing condition hereunder. Prior to or immediately following the Effective Date, Lessee JV shall submit Purchaser has filed its application for a new franchise agreement with Franchisor and together therewith paid all required application fee fees. Purchaser expressly acknowledges that (a) Seller has entered into this Agreement on the basis that no termination costs, fees or expenses or liquidated damages shall be payable by Seller as a result of the sale of the Property to Purchaser or as a result of Purchaser or its designee (at Purchaser’s sole cost and expense) so entering into a new hotel franchise agreement with Franchisor for approval of Lessee JV as its new franchisee at the Hotel and, (“b) Seller must receive a written release from Franchisor, on Franchisor’s current standard form, of any obligations of Seller or any of its Affiliates under the Franchise Approval”) pursuant a New Agreement first arising from and after Closing (including with respect to the repayment of any unamortized Key Money (as defined in the Franchise Agreement. Hersha Owner ) or pursuant to any guaranties from Seller or any of its Affiliates pursuant to the Franchise Agreement but expressly excluding any amounts due and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner owing (or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15otherwise incurred or accrued) days prior to the Closing DateDate other than any liquidated damages). If Closing occurs and Purchaser or its designee has not so entered into a new hotel franchise agreement with Franchisor as set forth above (and Seller has not obtained a release of Seller and its Affiliates as set forth above), in each case, such that no termination fees, liquidated damages or similar fees and penalties (including the repayment of any unamortized portion of any Key Money under the Franchise Agreement) are payable by Seller or any of its Affiliates (including Seller or any entity owning a beneficial interest in Seller in its capacity as a guarantor or otherwise) as a result of the sale of the Property to Purchaser, then Purchaser shall be responsible for, and Owner JV shall save, protect, defend, indemnify and Lessee JV shall provide Hersha Owner hold Seller (and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In any Affiliate of Seller) harmless from any such termination fees, liquidated damages or similar costs, fees and penalties in connection with such the termination of the Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that Agreement as of the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee Closing and any guarantors or co-obligors other Liabilities of Seller had the release of Seller and its Affiliates as set forth above been obtained. The provisions of this Section 4.8 shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have survive the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status of the negotiations of the New Franchise AgreementClosing.

Franchise Agreement. (a) The Parties parties acknowledge that the transfer of the franchise rights granted under the Franchise Agreement to the Buyer is subject to the prior written consent of Franchisor under the Franchise Agreement. Immediately following the date of this Agreement, (i) the Seller shall proceed promptly and agree that in good faith to give the notices required under the Franchise Agreement with respect to the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for hereby and (ii) the Buyer shall proceed promptly and in good faith to effect the consent of Franchisor to the transfer of such franchise rights to the Buyer, which may require the execution of a new franchise agreement for with Franchisor. Accordingly, the operation Buyer shall promptly submit to Franchisor a complete application to become a franchisee of Franchisor’s franchise system accompanied by payment of the Hotel under applicable application fee. As part of the application process, the Buyer shall provide any and all information and documentation that Franchisor requires (including, without limitation, financial statements, organizational documents, background information regarding the owners of the Buyer and other documentation supporting its application). Without limiting the foregoing, the Buyer shall use commercially reasonable efforts to obtain the consent of the Franchisor to the transfer of the franchise rights and a hotel brand owned by Franchisor (new franchise agreement in place of the “New Franchise Agreement”), which New may entail promptly responding to requests from Franchisor and otherwise promptly complying with all obligations of a transferee under the Franchise Agreement (including the PIP required thereunder) shall be in form and substance in all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree The Seller agrees to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approvalcooperate, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent cost, in good faith efforts with the Buyer and Franchisor in such process. The Buyer shall agree with Franchisor to obtain accept and be bound by any property improvement plan required by Franchisor in connection with obtaining such consent (which may consist of the property improvement plan currently incorporated into the Franchise Approval no later than fifteen (15) days prior to the Closing DateAgreement, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approvalto complete such property improvement plan within the time periods set forth in such property improvement plan. In connection with such Franchise Approvalthe transfer of the franchise rights, it the Buyer shall be required to pay any and all fees and charges associated therewith (including, without limitation, any transfer fee mandated under the Franchise Agreement). (b) If Franchisor has not agreed to terminate the Franchise Agreement and enter into a condition new franchise agreement with the Buyer by the then scheduled Closing Date, the Closing Date shall be extended to Hersha Owner’s obligation to close a date that is the existing license earlier of (i) ten Business Days after receipt of such agreement between Hersha Lessee and Franchisor (ii) February 28, 2007 (the “Existing Franchise AgreementOutside Closing Date”). In the event Franchisor has not delivered such new franchise agreement by the Outside Closing Date, the Buyer and the Seller shall each have the option to terminate this Agreement by written notice to the other party (the “Termination Option”). In the event the Termination Option is elected by either the Seller or the Buyer, this Agreement shall terminate and provided the Buyer is not in default of any of its obligations pursuant to subsection 4.5(a) or otherwise, the E▇▇▇▇▇▇ Money shall be refunded to the Buyer and neither party shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further rights or obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have hereunder except for those that expressly survive the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under termination of this Agreement and the status of the negotiations of the New Franchise Agreement.

Franchise Agreement. The Parties acknowledge Seller has entered into a (the “Existing Franchise Agreement”) with Marriott International Inc. (the “Franchisor”) governing the use of the Hotel as a Courtyard by Marriott (the “Brand”). At the Closing, Buyer and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for Franchisor shall enter into a new franchise agreement agreement, effective as of the Closing Date, replacing the Existing Franchise Agreement and containing terms and conditions acceptable to Buyer. Buyer shall be responsible for the payment and completion of any Franchisor mandated product improvement plan. If Buyer pays the cost for the product improvement plan report (the “PIP Fee”), then, in the event this Contract is terminated and Closing does not occur (other than by reason of Buyer’s default), Seller shall reimburse Buyer for the PIP Fee. Seller and the Franchisor shall terminate the Existing Franchise Agreement, as of the Closing Date, and Buyer shall be solely responsible for all claims and liabilities arising thereunder. Seller and Buyer shall use all commercially reasonable efforts to obtain a release of Seller and any other guarantors as described in Section 5.2(d) above. Buyer agrees to apply for and use reasonable efforts, and Seller shall cooperate with Buyer, to obtain the new franchise agreement, together with the assignment to Buyer of all waivers of any brand standard necessary or appropriate for the operation of the Hotel under the Brand. It shall be a hotel brand owned by condition to Closing for Buyer and Seller that the Franchisor provide the foregoing consent; provided, however, that Buyer shall not be entitled, as a condition to Closing, to require amendments to the Existing Franchise Agreement (or to require a new franchise agreement (the “New Franchise Agreement”), which New ) that contains economic terms more favorable to the owner or franchisee than the economic terms of the Existing Franchise Agreement or that differ in any other material respect from the form of franchise agreement which Buyer and Franchisor have negotiated previously as their standard form of franchise agreement (including to the PIP required thereunder) extent such standard forms are applicable under the circumstances). Buyer shall be in form and substance in responsible for all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior costs related to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that termination of the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status execution of a new franchise agreement, including but not limited to, the negotiations payment of license, application, transfer and similar fees thereunder. Seller shall use best efforts to promptly provide all information required by the New Franchise AgreementFranchisor in connection with each such new franchise agreement, and Seller and Buyer shall diligently pursue obtaining each the same.

Franchise Agreement. (a) The Parties parties acknowledge that the transfer of the franchise rights granted under the Franchise Agreement to the Buyer is subject to the prior written consent of Franchisor under the Franchise Agreement. Immediately following the date of this Agreement, (i) the Seller shall proceed promptly and agree that in good faith to give the notices required under the Franchise Agreement with respect to the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for hereby and (ii) the Buyer shall proceed promptly and in good faith to effect the consent of Franchisor to the transfer of such franchise rights to the Buyer, which may require the execution of a new franchise agreement for with Franchisor. Accordingly, the operation Buyer shall promptly submit to Franchisor a complete application to become a franchisee of Franchisor’s franchise system accompanied by payment of the Hotel under applicable application fee. As part of the application process, the Buyer shall provide any and all information and documentation that Franchisor requires (including, without limitation, financial statements, organizational documents, background information regarding the owners of the Buyer and other documentation supporting its application). Without limiting the foregoing, the Buyer shall use commercially reasonable efforts to obtain the consent of the Franchisor to the transfer of the franchise rights and a hotel brand owned by Franchisor (new franchise agreement in place of the “New Franchise Agreement”), which New Franchise Agreement (including may entail promptly responding to requests from Franchisor and otherwise promptly complying with all obligations of a transferee under the PIP required thereunder) shall be in form and substance in all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree The Seller agrees to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approvalcooperate, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent cost, in good faith efforts with the Buyer and Franchisor in such process. The Buyer shall agree with Franchisor to obtain accept and be bound by any property improvement plan required by Franchisor in connection with obtaining such consent (which may consist of the property improvement plan currently incorporated into the Franchise Approval no later than fifteen (15) days prior to the Closing DateAgreement, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approvalto complete such property improvement plan within the time periods set forth in such property improvement plan. In connection with such Franchise Approvalthe transfer of the franchise rights, it the Buyer shall be required to pay any and all fees and charges associated therewith (including, without limitation, any transfer fee mandated under the Franchise Agreement). (b) If Franchisor has not agreed to terminate the Franchise Agreement and enter into a condition new franchise agreement with the Buyer by the then scheduled Closing Date, the Closing Date shall be extended to Hersha Owner’s obligation to close a date that is the existing license earlier of (i) ten Business Days after receipt of such agreement between Hersha Lessee and Franchisor (ii) July 3, 2007 (the “Existing Franchise AgreementOutside Closing Date”). In the event Franchisor has not delivered such new franchise agreement by the Outside Closing Date, the Buyer and the Seller shall each have the option to terminate this Agreement by written notice to the other party (the “Termination Option”). In the event the Termination Option is elected by either the Seller or the Buyer, this Agreement shall terminate and provided the Buyer is not in default of any of its obligations pursuant to subsection 4.5(a) or otherwise, the E▇▇▇▇▇▇ Money shall be refunded to the Buyer and neither party shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further rights or obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have hereunder except for those that expressly survive the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under termination of this Agreement and the status of the negotiations of the New Franchise Agreement.

Franchise Agreement. The Parties acknowledge Seller has entered into the Franchise Agreement governing the use of the Brand for the Hotel. At the Closing, Seller shall assign its interest in the Franchise Agreement to Buyer, and Buyer’s shall assume Seller’s obligations thereunder arising or required to be performed on and after the Closing Date, subject to the consent of Franchisor to such assignment and assumption and the release of Seller by Franchisor for liabilities under the Franchise Agreement accruing after the Closing and subject to any amendments as may be required to accommodate Buyer’s and/or Buyer’s Affiliates’ REIT structure. It shall not be a condition to Seller’s obligation to close that Franchisor release Seller in whole or in part from its obligations under the Franchise Agreement, it being understood that neither Seller nor Buyer can guarantee that Franchisor will agree that to any type of release. Buyer agrees to apply for and use reasonable efforts, and Seller shall cooperate with Buyer, to obtain the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for a new franchise agreement Franchisor’s written consent to the assignment to Buyer of the Franchise Agreement, together with the assignment to Buyer of all waivers of any brand standard necessary or appropriate for the operation of the Hotel under a hotel brand owned by Franchisor (the “New Franchise Agreement”), which New Franchise Agreement (including the PIP required thereunder) shall be in form and substance in all respects acceptable to and approved by Lessee JVBrand. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval It shall be a condition to Hersha Owner’s Closing for Buyer and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to closeSeller that the Franchisor provide the foregoing consent. Owner JV and Lessee JV Buyer shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior be responsible for paying all fees related to the Closing Dateassignment and amendment of the Franchise Agreement, including but not limited to, the payment of license, application, transfer and Owner JV similar fees thereunder, provided that Seller shall pay all costs and Lessee JV shall provide Hersha Owner fees of its attorneys and Lessee Owner consultants and all costs associated with written notice immediately upon obtaining Franchise Approval. In any releases or other provisions requested by or for the benefit of Seller, in each case, incurred in connection with such Franchise Approval, it assignment. Seller shall be a condition use reasonable commercial efforts to Hersha Owner’s obligation to close that promptly provide all information required by the existing license agreement between Hersha Lessee Franchisor in connection with each such assignment and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lesseeamendment, and Hersha Owner, Hersha Lessee Seller and any guarantors or co-obligors Buyer shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have diligently pursue obtaining each the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status of the negotiations of the New Franchise Agreementsame.

Franchise Agreement. The Parties acknowledge Seller has entered into a ______________ (the “Existing Franchise Agreement”) with Hilton Hotels (the “Franchisor”) governing the use of the Hotel as a Homewood Suites by Hilton (the “Brand”). At the Closing, Buyer and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for Franchisor shall enter into a new franchise agreement agreement, effective as of the Closing Date, replacing the Existing Franchise Agreement and containing terms and conditions acceptable to Buyer. Buyer shall be responsible for the payment and completion of any Franchisor mandated product improvement plan. If Buyer pays the cost for the product improvement plan report (the “PIP Fee”), then, in the event this Contract is terminated and Closing does not occur (other than by reason of Buyer’s default), Seller shall reimburse Buyer for the PIP Fee. Seller and the Franchisor shall terminate the Existing Franchise Agreement, as of the Closing Date, and Buyer shall be solely responsible for all claims and liabilities arising thereunder. Seller and Buyer shall use all commercially reasonable efforts to obtain a release of Seller and any other guarantors as described in Section 5.2(d) above. Buyer agrees to apply for and use reasonable efforts, and Seller shall cooperate with Buyer, to obtain the new franchise agreement, together with the assignment to Buyer of all waivers of any brand standard necessary or appropriate for the operation of the Hotel under the Brand. It shall be a hotel brand owned by condition to Closing for Buyer and Seller that the Franchisor provide the foregoing consent; provided, however, that Buyer shall not be entitled, as a condition to Closing, to require amendments to the Existing Franchise Agreement (or to require a new franchise agreement (the “New Franchise Agreement”), which New ) that contains economic terms more favorable to the owner or franchisee than the economic terms of the Existing Franchise Agreement or that differ in any other material respect from the form of franchise agreement which Buyer and Franchisor have negotiated previously as their standard form of franchise agreement (including to the PIP required thereunder) extent such standard forms are applicable under the circumstances). Buyer shall be in form and substance in responsible for all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior costs related to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that termination of the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status execution of a new franchise agreement, including but not limited to, the negotiations payment of license, application, transfer and similar fees thereunder. Seller shall use best efforts to promptly provide all information required by the New Franchise AgreementFranchisor in connection with each such new franchise agreement, and Seller and Buyer shall diligently pursue obtaining each the same.

Franchise Agreement. The Parties acknowledge (a) Effective as of the Close of Escrow, Buyer shall enter into a new Franchise Agreement with Franchisor (such new agreement is referred to as a “Transfer”); provided, however, if it has failed to obtain a Transfer prior to the Close of Escrow, Seller shall terminate the Franchise Agreement and agree that Buyer shall pay any and all fees, costs or liquidated damages incurred by Seller under the transactions contemplated by Franchise Agreement in connection with such termination. Buyer shall make such applications with the Franchisor within seven (7) days after the Effective Date of this Agreement are contingent upon Lessee JV obtaining approval for and shall use good faith and commercially reasonable efforts to obtain a new franchise agreement for the operation Transfer of the Hotel under Franchise Agreement. If after using good faith and commercially reasonable efforts Buyer is unable to obtain a hotel brand owned Transfer prior to the originally scheduled Closing Date, Buyer shall have the right to extend the Closing Date for thirty (30) days by Franchisor notifying Seller in writing not later than five ( 5 )business days prior to the originally scheduled Closing Date of its election to extend the Closing Date and simultaneously depositing with Escrow Holder, the sum of One Hundred Thousand Dollars ($100,000) (the “New Franchise AgreementExtension Deposit”). The Extension Deposit shall non-refundable to Buyer, which New Franchise Agreement (including except in the PIP required thereunder) event of Seller’s default and shall be applicable in form and substance in all respects acceptable full to and approved by Lessee JV. Prior the Purchase Price. (b) Subject to or immediately following Buyer’s right to extend the Effective DateClosing Date as provided above, Lessee JV the failure of the Buyer to obtain a Transfer prior to the Close of Escrow shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall not be a condition for the benefit of Buyer nor shall it delay the Close of Escrow but instead, Seller shall terminate the Franchise Agreement effective as of the Close of Escrow and Buyer shall pay any and all fees, costs or liquidated damages incurred by Seller under the Franchise Agreement in connection with such termination. (c) Prior to Hersha Ownerthe Close of Escrow and upon the request of Seller, Buyer shall update Seller as to Buyer’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later a Transfer. Buyer shall notify Seller not less than fifteen five (155) business days prior to the Closing DateDate (or any extension thereof), as to whether Buyer has obtained a Transfer of the Franchise Agreement. If Buyer notifies Seller that is unable to obtain a Transfer or if Buyer fails to provide Seller with any notice on or before five (5) business days prior to the Closing Date (or any extension thereof), then Seller shall cause the termination of the Franchise Agreement effective as of the Close of Escrow and Owner JV Buyer shall pay any and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining all fees, costs or liquidated damages incurred by Seller under the Franchise Approval. In Agreement in connection with such termination. The fees, costs, expenses and premiums associated with any Transfer of the Franchise Approval, it Agreement shall be a condition to Hersha Owner’s obligation to close that borne solely by Buyer; provided, however, Seller shall be solely responsible for any and all accrued franchise fees and other pre-closing expenses arising under the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status of the negotiations of the New Franchise Agreement.

Franchise Agreement. The Parties acknowledge Seller has entered into the Existing Franchise Agreements with Marriott International, Inc. or an affiliate thereof (the “Franchisor”) governing the use of the Hotels as Residence Inn by Marriott and agree that Fairfield Inn, as applicable, (the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for “Brand”). At the Closing, Buyer and the Franchisor shall enter into a new franchise agreement for each Property, effective as of the Closing Date, replacing the Existing Franchise Agreements and containing terms and conditions acceptable to Buyer. Buyer shall be responsible for the payment and completion of any Franchisor mandated product improvement plan. If Buyer pays the cost for the product improvement plan report (the “PIP Fee”), then, in the event this Contract is terminated and Closing does not occur (other than by reason of Buyer’s default), Seller shall reimburse Buyer for the PIP Fee. Seller and the Franchisor shall terminate the Existing Franchise Agreements, as of the Closing Date, and Buyer shall be solely responsible for all claims and liabilities arising thereunder. Seller and Buyer shall use all commercially reasonable efforts to obtain a release of Seller and any other guarantors as described in Section 5.2(d) above. Buyer agrees to apply for and use reasonable efforts, and Seller shall cooperate with Buyer, to obtain the new franchise agreement, together with the assignment to Buyer of all waivers of any brand standard necessary or appropriate for the operation of the Hotel Hotels under the Brand. It shall be a hotel brand owned by condition to Closing for Buyer and Seller that the Franchisor provide the foregoing consent; provided, however, that Buyer shall not be entitled, as a condition to Closing, to require amendments to the Existing Franchise Agreements (or to require a new franchise agreement (the “New Franchise Agreement”), ) that contains economic terms more favorable to the owner or franchisee than the economic terms of the Existing Franchise Agreements or that differ in any other material respect from the form of franchise agreement which New Franchise Agreement Buyer and Franchisor have negotiated previously as their standard form of franchise agreement (including to the PIP required thereunder) extent such standard forms are applicable under the circumstances). Buyer shall be in form responsible for all costs related to the termination of the Existing Franchise Agreements and substance in all respects acceptable to the execution of a new franchise agreement, including but not limited to, the payment of license, application, transfer and approved by Lessee JVsimilar fees thereunder. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV Seller shall use diligent good faith best efforts to obtain Franchise Approval no later than fifteen (15) days prior to promptly provide all information required by the Closing DateFranchisor in connection with each such new franchise agreement, and Owner JV Seller and Lessee JV Buyer shall provide Hersha Owner and Lessee Owner with written notice immediately upon diligently pursue obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that each the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status of the negotiations of the New Franchise Agreementsame.

Franchise Agreement. The Parties acknowledge and agree that the transactions contemplated by So long as Purchaser complies with its obligations set forth in this Agreement are contingent upon Lessee JV obtaining approval for a new franchise agreement for the operation of the Hotel under a hotel brand owned by Franchisor (the “New Franchise Agreement”), which New Franchise Agreement (including the PIP required thereunder) shall be in form and substance in all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise ApprovalSection 4.9, it shall be a condition to Hersha OwnerPurchaser’s obligation to close Closing that Franchisor shall have entered into a new hotel franchise agreement with Purchaser or its designee on the existing license form included in Franchisor’s current Franchise Disclosure Document (“FDD”) modified to include the same franchise fee structure, reserve fund obligations and area of protection terms that are set forth in the Franchise Agreement, the agreed PIP (PIP 6160 dated January 12th, 2015) and such other commercially reasonable changes requested by Purchaser to the form franchise agreement between Hersha Lessee and Franchisor included in the FDD (the “Existing Material Franchise Terms”); provided, however, only those commercially reasonable changes that are consistent with the terms of the most recent franchise agreement between Franchisor and Purchaser or Affiliates of Purchaser shall be considered Material Franchise Terms for purposes of this Agreement. Franchisor’s commitment in writing to, at Closing, enter into such franchise agreement with Purchaser upon the Material Franchise Terms, shall be referred to herein as the “Franchisor Approval”. Promptly after the Effective Date (and not later than three (3) Business Days), Purchaser shall have been terminated without material file its application for a new franchise agreement with Franchisor and together therewith pay all required application fees. Purchaser shall use commercially reasonable efforts to pursue and negotiate in good faith the new franchise agreement and the Franchisor Approval with Franchisor on or before February 23, 2015 and Purchaser shall undertake all such acts as may be reasonably necessary for obtaining a hotel franchise agreement (including, but not limited to, the payment of any fees to Franchisor) to satisfy the closing condition set forth in Section 9.1(e) in accordance with the terms of this Section 4.9 on or prior to the Closing Date. Purchaser expressly acknowledges that (a) Seller has entered into this Agreement on the basis that no termination costs, fees or expenses or liquidated damages shall be payable by Seller as a result of the sale of the Property to Purchaser as a result of Purchaser or its designee (at Purchaser’s sole cost and expense) so entering into a new hotel franchise agreement with Franchisor for the Hotel and, (b) Seller must receive a written release from Franchisor, on Franchisor’s current standard form, of any obligations of Seller or any of its Affiliates under the Franchise Agreement first arising from and after Closing (including pursuant to Hersha Owner any guaranties from Seller or Hersha Lesseeany of its Affiliates pursuant to the Franchise Agreement but expressly excluding any amounts due and owing (or otherwise incurred or accrued) prior to the Closing Date other than any liquidated damages). If Closing occurs and Purchaser or its designee has not so entered into a new hotel franchise agreement with Franchisor as set forth above (and Seller has not obtained a release of Seller and its Affiliates as set forth above), in each case, such that no termination fees, liquidated damages or similar fees and penalties are payable by Seller or any of its Affiliates (including Seller or any entity owning a beneficial interest in Seller in its capacity as a guarantor or otherwise) as a result of the sale of the Property to Purchaser, then Purchaser shall be responsible for, and Hersha Ownershall save, Hersha Lessee protect, defend, indemnify and hold Seller (and any guarantors or co-obligors shall have been expressly released Affiliate of Seller) harmless from any further obligations such termination fees, liquidated damages or liability thereunder. Hersha Owner similar costs, fees and Hersha Lessee shall have penalties in connection with the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status termination of the negotiations Franchise Agreement as of the New Franchise AgreementClosing and any other Liabilities of Seller had the release of Seller and its Affiliates as set forth above been obtained. The provisions of this Section 4.9 shall survive the Closing.

Franchise Agreement. The Parties acknowledge and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for Seller has entered into a new franchise agreement for the operation of the Hotel under a hotel brand owned by Franchisor (the “New Franchise Agreement”), which New Franchise Agreement (including the PIP required thereunder) shall be in form and substance in all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that the existing license agreement between Hersha Lessee and Franchisor ______________ (the “Existing Franchise Agreement”) with Marriott International (the “Franchisor”) governing the use of the Hotels as Residence Inns (the “Brand”). At the Closing, Buyer and the Franchisor shall have been enter into a new franchise agreement, effective as of the Closing Date, replacing the Existing Franchise Agreement and containing terms and conditions acceptable to Buyer. Buyer shall be responsible for the payment and completion of any Franchisor mandated product improvement plan. If Buyer pays the cost for the product improvement plan report (the “PIP Fee”), then, in the event this Contract is terminated without material cost to Hersha Owner or Hersha Lesseeand Closing does not occur (other than by reason of Buyer’s default), Seller shall reimburse Buyer for the PIP Fee. Seller and the Franchisor shall terminate the Existing Franchise Agreements, as of the Closing Date, and Hersha Owner, Hersha Lessee Buyer shall be solely responsible for all claims and liabilities arising thereunder. Seller and Buyer shall use all commercially reasonable efforts to obtain a release of Seller and any other guarantors as described in Section 5.2(d) above. Buyer agrees to apply for and use reasonable efforts, and Seller shall cooperate with Buyer, to obtain the new franchise agreements, together with the assignment to Buyer of all waivers of any brand standard necessary or co-obligors appropriate for the operation of the Hotels under the Brand. It shall be a condition to Closing for Buyer and Seller that the Franchisor provide the foregoing consent; provided, however, that Buyer shall not be entitled, as a condition to Closing, to require amendments to the Existing Franchise Agreements (or to require a new franchise agreement (the “New Franchise Agreements”)) that contains economic terms more favorable to the owner or franchisee than the economic terms of the Existing Franchise Agreements or that differ in any other material respect from the form of franchise agreement which Buyer and Franchisor have been expressly released from any further obligations or liability negotiated previously as their standard form of franchise agreement (to the extent such standard forms are applicable under the circumstances). Buyer shall be responsible for all costs related to the termination of the Existing Franchise Agreements and the execution of new franchise agreements, including but not limited to, the payment of license, application, transfer and similar fees thereunder. Hersha Owner and Hersha Lessee Seller shall have use best efforts to promptly provide all information required by the right at all times to contact Franchisor in order to confirm that Lessee JV is complying connection with its obligations under this Agreement each such new franchise agreement, and Seller and Buyer shall diligently pursue obtaining each the status of the negotiations of the New Franchise Agreementsame.

Franchise Agreement. As of the Closing Date, there is no Franchise Agreement in effect at the Property. The Parties acknowledge covenants and agree requirements of this clause (b) shall apply with respect to any proposed Franchisor and proposed Franchise Agreement and thereafter on an ongoing basis with respect a Franchisor and Franchise Agreement approved as set forth below. (i) If Borrower shall desire to enter into any new or amended Franchise Agreement with a new Franchisor, (A) the Franchise Agreement shall be for a Luxury Brand acceptable to Lender, and (B) Borrower shall: (i) obtain Lender’s prior written consent thereto, (ii) deliver a Rating Agency Confirmation from each applicable rating agency as to such new or amended Franchise Agreement and new Franchisor, (iii) pay all costs and expenses incurred in connection with such new or amended Franchise Agreement (including, without limitation, pre-funding an amount equal to the cost of any work required by the new or amended Franchise Agreement or required by any PIPS entered in to in connection with the new or amended Franchise Agreement and deposited by Borrower into the Cash Management Deposit Account, and the cost to obtain the Rating Agency Confirmation as required above, and reimbursement of Lender’s and Servicer's costs and expenses in connection with such review and approval), (iv) obtain any new or amended License as may be required in connection with such new or amended Franchise Agreement and (v) deliver to Lender simultaneously with the execution of such Franchise Agreement a comfort letter from the Franchisor in which Franchisor shall agree: (1) that Lender shall have the right, but not the obligation, to cure any defaults under the Franchise Agreement, (2) to give Lender written notice of, and a reasonable time to cure, any default of Borrower under the Franchise Agreement, (3) not to assert against Lender any defaults which by their nature are personal to Borrower and not curable by Lender; (4) to allow Lender to change managers of the hotel operated at the Property; (5) that, if Lender or its Affiliate shall acquire title to the Property, Lender or its Affiliate shall have an option to succeed to the interest of Borrower under the Franchise Agreement (or to be granted a new license agreement on the same terms as the Franchise Agreement) without payment of any fees to Franchisor; (6) that the transactions contemplated Franchise Agreement will remain in effect during any foreclosure proceedings by this Lender provided Lender cures all monetary defaults under the Franchise Agreement; (7) not to modify, cancel, surrender or otherwise terminate the Franchise Agreement are contingent upon Lessee JV obtaining during the Term without the consent of Lender; and (8) that if Lender or its Affiliate succeeds to Borrower’s interest under the Franchise Agreement, Lender may assign its rights therein to any entity which acquires the Property from Lender or its Affiliate (subject to Franchisor’s reasonable approval). The foregoing to the contrary notwithstanding, Lender will not unreasonably withhold approval of a Pre-Approved Franchisor's standard form of “comfort letter” addressing those matters set forth above. (ii) Borrower shall (A) promptly perform and/or observe all of the covenants and agreements required to be performed and observed by it under the Franchise Agreement and do all things necessary to preserve and to keep unimpaired its material rights thereunder; (B) promptly notify Lender of any default under the Franchise Agreement of which it is aware; (C) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, notice, report and estimate received by it under the Franchise Agreement; and (D) promptly enforce the performance and observance of all of the covenants and agreements required to be performed and/or observed by the Franchisor under the Franchise Agreement. (iii) Borrower shall not, without Lender’s prior written consent (A) surrender, terminate or cancel the Franchise Agreement; (B) reduce or consent to the reduction of the term of the Franchise Agreement; (C) increase or consent to the increase of the amount of any charges under the Franchise Agreement; or (D) otherwise modify, change, supplement, alter or amend, or waive or release any of its rights and remedies under, the Franchise Agreement. (iv) Without in any way limiting the covenants set forth in the Loan Documents, Borrower shall: (A) cause the hotel located on the Property to be operated, repaired and maintained as a well-maintained Luxury Brand hotel and (B) maintain Inventory in amounts sufficient to meet the hotel industry standard for a new franchise agreement Luxury Brand hotel and at levels sufficient for the operation of the Hotel under a hotel brand owned by Franchisor (located on the “New Franchise Agreement”), which New Franchise Agreement (including the PIP required thereunder) shall be in form and substance in all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee Property at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status of the negotiations of the New Franchise Agreementfull occupancy levels.

Franchise Agreement. The Parties acknowledge Seller has entered into a (the “Existing Franchise Agreement”) with Marriott International (the “Franchisor”) governing the use of the Hotel as a Residence Inn (the “Brand”). At the Closing, Buyer and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for Franchisor shall enter into a new franchise agreement agreement, effective as of the Closing Date, replacing the Existing Franchise Agreement and containing terms and conditions acceptable to Buyer. Buyer shall be responsible for the payment and completion of any Franchisor mandated product improvement plan. If Buyer pays the cost for the product improvement plan report (the “PIP Fee”), then, in the event this Contract is terminated and Closing does not occur (other than by reason of Buyer’s default), Seller shall reimburse Buyer for the PIP Fee. Seller and the Franchisor shall terminate the Existing Franchise Agreement, as of the Closing Date, and Buyer shall be solely responsible for all claims and liabilities arising thereunder. Seller and Buyer shall use all commercially reasonable efforts to obtain a release of Seller and any other guarantors as described in Section 5.2(d) above. Buyer agrees to apply for and use reasonable efforts, and Seller shall cooperate with Buyer, to obtain the new franchise agreement, together with the assignment to Buyer of all waivers of any brand standard necessary or appropriate for the operation of the Hotel under the Brand. It shall be a hotel brand owned by condition to Closing for Buyer and Seller that the Franchisor provide the foregoing consent; provided, however, that Buyer shall not be entitled, as a condition to Closing, to require amendments to the Existing Franchise Agreement (or to require a new franchise agreement (the “New Franchise Agreement”), which New ) that contains economic terms more favorable to the owner or franchisee than the economic terms of the Existing Franchise Agreement or that differ in any other material respect from the form of franchise agreement which Buyer and Franchisor have negotiated previously as their standard form of franchise agreement (including to the PIP required thereunder) extent such standard forms are applicable under the circumstances). Buyer shall be in form and substance in responsible for all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior costs related to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that termination of the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status execution of a new franchise agreement, including but not limited to, the negotiations payment of license, application, transfer and similar fees thereunder. Seller shall use best efforts to promptly provide all information required by the New Franchise AgreementFranchisor in connection with each such new franchise agreement, and Seller and Buyer shall diligently pursue obtaining each the same.

Franchise Agreement. The Parties acknowledge and agree Reference is made to that the transactions contemplated by this certain Franchise Agreement are contingent upon Lessee JV obtaining approval for a new franchise agreement for the operation of the Hotel under a hotel brand owned by Franchisor (as amended, the “New Franchise Agreement”), dated November 13, 1998, between Promus Hotels, Inc. as franchisor and Seller as franchisee. The parties acknowledge that Purchaser has completed and delivered an application (along with all other requested documentation) to Hilton Hotels Corporation (“Franchisor”), which New is the successor franchisor to Promus Hotels, Inc., in order to obtain Franchisor’s approval of a new Franchise Agreement for the Property between Franchisor and Purchaser and to enter into such new Franchise Agreement with Franchisor (including collectively, the PIP required thereunder) shall be in form and substance in all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Agreement Approval”) pursuant a New Franchise Agreement). Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV Purchaser shall use diligent good faith best efforts (for purposes of this definition best efforts does not include spending additional funds above typical franchise application fees or commencing litigation) to obtain the Franchise Agreement Approval no later than fifteen and, if obtained, agrees to execute a franchise agreement with the Franchisor in the form required by the Franchisor so long as it is reasonably consistent with the terms (15i) days prior set forth in other franchise agreements with Franchisor entered into by Purchaser or Purchaser’s affiliates with respect to other hotels owned or operated by Purchaser or Purchaser’s affiliates or (ii) which the Franchisor offers to other prospective franchisees. If, despite having exercised best efforts, Purchaser is unable to obtain the Franchise Agreement Approval by the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with as such Franchise Approvaldate may be extended pursuant to Section 6.1(a), it shall be a condition to Hersha Owner’s obligation to close that the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee Purchaser shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under terminate this Agreement and the status receive a return of the negotiations Deposit. Seller shall, at Purchaser’s sole cost and expense, reasonably cooperate with Purchaser in connection with obtaining the Franchise Agreement Approval. Purchaser shall agree to any commercially reasonable requirements of Franchisor in connection with obtaining the New Franchise Agreement.Agreement Approval, including without limitation, the implementation of any PIP. Purchaser shall pay any and all fees, costs and expenses payable to Franchisor in connection with the Franchise Agreement Approval or the entering into of a new franchise agreement with Franchisor at the Property

Franchise Agreement. The Parties acknowledge Seller has or will have entered into the Franchise Agreement with the Franchisor governing the use of the Brand for the Hotel prior to Closing. At the Closing, Seller shall assign its interest in the Franchise Agreement to Buyer, and agree that Buyer shall assume Seller’s obligations thereunder arising or required to be performed on and after the transactions contemplated Closing Date, subject to the consent of the Franchisor to such assignment and assumption and subject to such amendments thereto as may be required or otherwise agreed to by this Agreement are contingent upon Lessee JV obtaining approval for Buyer (including, without limitation, such amendments as may be required to accommodate Buyer’s and/or Buyer’s Affiliates’ REIT structure). Notwithstanding the foregoing, at Buyer’s option, in lieu of Seller’s assigning to Buyer Seller’s interest in the Franchise Agreement, Buyer and the Franchisor may enter into a new franchise agreement agreement, effective as of the Closing Date, replacing the existing Franchise Agreement and containing terms and conditions acceptable to Buyer. In such case, Seller and the Franchisor shall terminate the existing Franchise Agreement, as of the Closing Date, and Seller shall be solely responsible for all claims and liabilities arising thereunder. Buyer agrees to apply for and use reasonable efforts, and Seller shall cooperate with Buyer, to obtain the Franchisor’s written consent to the assignment to Buyer of the Franchise Agreement (or to a new franchise agreement, as the case may be), together with the assignment to Buyer of all waivers of any brand standard necessary or appropriate for the operation of the Hotel under a hotel brand owned by Franchisor (the “New Franchise Agreement”), which New Franchise Agreement (including the PIP required thereunder) shall be in form and substance in all respects acceptable to and approved by Lessee JVBrand. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval It shall be a condition to Hersha Owner’s Closing for Buyer and Hersha Lessee’s obligation Seller that the Franchisor provide the foregoing consent; provided, however, that Buyer shall not be entitled, as a condition to close and Owner JV’s and Lessee JV’s obligation Closing, to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior require amendments to the Closing DateFranchise Agreement (or to require a new franchise agreement) that differ in any material respect from the form of franchise agreement which Buyer and the Franchisor have negotiated previously as their standard form of franchise agreement (to the extent such standard form is applicable under the circumstances). Each of Seller and Buyer shall be responsible for paying one-half (1/2) of all costs related to the assignment and amendment of the Franchise Agreement (or to the termination of the Franchise Agreement and the execution of a new franchise agreement), including but not limited to, the payment of license, application, transfer and Owner JV similar fees thereunder, provided that Seller shall pay all costs and Lessee JV shall provide Hersha Owner fees of its attorneys and Lessee Owner consultants and all costs associated with written notice immediately upon obtaining Franchise Approval. In any releases or other provisions requested by or for the benefit of Seller, in each case, incurred in connection with such Franchise Approval, it assignment and/or termination and execution of new agreement. Seller shall be use commercially reasonable efforts to promptly provide all information reasonably required by the Franchisor in connection with each such assignment and amendment (or in connection with a condition to Hersha Owner’s obligation to close that the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lesseenew franchise agreement), and Hersha Owner, Hersha Lessee Seller and any guarantors or co-obligors Buyer shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have diligently pursue obtaining each the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status of the negotiations of the New Franchise Agreementsame.

Franchise Agreement. The Parties acknowledge Seller has entered into a (the “Existing Franchise Agreement”) with Hilton Hotels (the “Franchisor”) governing the use of the Hotel as a Homewood Suites (the “Brand”). At the Closing, Buyer and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for Franchisor shall enter into a new franchise agreement agreement, effective as of the Closing Date, replacing the Existing Franchise Agreement and containing terms and conditions acceptable to Buyer. Buyer shall be responsible for the payment and completion of any Franchisor mandated product improvement plan. If Buyer pays the cost for the product improvement plan report (the “PIP Fee”), then, in the event this Contract is terminated and Closing does not occur (other than by reason of Buyer’s default), Seller shall reimburse Buyer for the PIP Fee. Seller and the Franchisor shall terminate the Existing Franchise Agreement, as of the Closing Date, and Buyer shall be solely responsible for all claims and liabilities arising thereunder. Seller and Buyer shall use all commercially reasonable efforts to obtain a release of Seller and any other guarantors as described in Section 5.2(d) above. Buyer agrees to apply for and use reasonable efforts, and Seller shall cooperate with Buyer, to obtain the new franchise agreement, together with the assignment to Buyer of all waivers of any brand standard necessary or appropriate for the operation of the Hotel under the Brand. It shall be a hotel brand owned by condition to Closing for Buyer and Seller that the Franchisor provide the foregoing consent; provided, however, that Buyer shall not be entitled, as a condition to Closing, to require amendments to the Existing Franchise Agreement (or to require a new franchise agreement (the “New Franchise Agreement”), which New ) that contains economic terms more favorable to the owner or franchisee than the economic terms of the Existing Franchise Agreement or that differ in any other material respect from the form of franchise agreement which Buyer and Franchisor have negotiated previously as their standard form of franchise agreement (including to the PIP required thereunder) extent such standard forms are applicable under the circumstances). Buyer shall be in form and substance in responsible for all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior costs related to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that termination of the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status execution of a new franchise agreement, including but not limited to, the negotiations payment of license, application, transfer and similar fees thereunder. Seller shall use best efforts to promptly provide all information required by the New Franchise AgreementFranchisor in connection with each such new franchise agreement, and Seller and Buyer shall diligently pursue obtaining each the same.

Franchise Agreement. The Parties acknowledge Borrower will cause the hotel located on the Property to be operated pursuant to the Franchise Agreement. ​ ​ ​ LOAN AGREEMENT, PAGE 27 ​ Borrower will (i) promptly perform and/or observe all of the covenants and agreements required to be performed and observed by it under the Franchise Agreement and do all things necessary to preserve and to keep unimpaired its material rights thereunder, (ii) promptly notify Lender of any default under the Franchise Agreement of which it is aware, (iii) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, notice, report and estimate received by it under the Franchise Agreement, and (iv) promptly enforce the performance and observance of all of the covenants and agreements required to be performed and/or observed by the Franchisor under the Franchise Agreement. If Borrower will enter into any new or amended Franchise Agreement, Lender will receive within 30 days following the execution of such Franchise Agreement a Subordination Agreement from the Franchisor which is in form and substance reasonably acceptable to Lender and, without limiting the foregoing, pursuant to which Franchisor will agree (i) that Lender will have the right, but not the obligation, to cure any defaults under the Franchise Agreement, (ii) to give Lender written notice of, and a reasonable time to cure, any default of Borrower under the Franchise Agreement, (iii) not to assert against Lender any defaults which by their nature are personal to Borrower and not curable by Lender, (iv) to allow Lender, at Lender’s option, to either terminate the Franchisor upon the occurrence of an Event of Default or to require Franchisor to attorn to enter into a new Franchise Agreement with Lender on substantially the same terms as the existing Franchise Agreement, (v) that, if Lender or its Affiliate will acquire title to the Property, Lender or its Affiliate will have an option to succeed to the interest of Borrower under the Franchise Agreement without payment of any fees to Franchisor, (vi) that the transactions contemplated Franchise Agreement will remain in effect during any foreclosure proceedings by this Lender provided Lender cures all monetary defaults under the Franchise Agreement, (vii) not to modify, cancel, surrender or otherwise terminate the Franchise Agreement are contingent upon Lessee JV obtaining approval during the Term without the consent of Lender, and (viii) that if Lender or its Affiliate succeeds to Borrower’s interest under the Franchise Agreement, Lender may assign its rights therein to any entity which acquires the Property from Lender or its Affiliate (subject to Franchisor’s reasonable approval). Borrower will not, without Lender’s prior written consent (i) surrender, terminate or cancel the Franchise Agreement, (ii) reduce or consent to the reduction of the term of the Franchise Agreement, (iii) increase or consent to the increase of the amount of any charges under the Franchise Agreement, or (iv) otherwise modify, change, supplement, alter or amend, or waive or release any of its rights and remedies under, the Franchise Agreement. Without in any way limiting the covenants set forth in the Loan Documents, Borrower will: (i) cause the hotel located on the Property to be operated, repaired and maintained as a well-maintained hotel, providing amenities, services and facilities substantially equivalent to hotels of similar average room rate and targeted market segment from time to time operating in the same or comparable geographic area of the Property, taking into consideration the age and location of the hotel located on the Property and (ii) maintain Inventory in amounts sufficient to meet the hotel industry standard for a new franchise agreement hotels comparable to the hotel located on the Property and at levels sufficient for the operation of the Hotel under a hotel brand owned by Franchisor (located on the “New Franchise Agreement”), which New Franchise Agreement (including the PIP required thereunder) shall be in form and substance in all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee Property at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status of the negotiations of the New Franchise Agreementfull occupancy levels.

Franchise Agreement. The Parties acknowledge Seller has entered into a ______________ (the “Existing Franchise Agreement”) with Hilton Hotels (the “Franchisor”) governing the use of the Hotel as a Hampton Inn (the “Brand”). At the Closing, Buyer and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for Franchisor shall enter into a new franchise agreement agreement, effective as of the Closing Date, replacing the Existing Franchise Agreement and containing terms and conditions acceptable to Buyer. Buyer shall be responsible for the payment and completion of any Franchisor mandated product improvement plan. If Buyer pays the cost for the product improvement plan report (the “PIP Fee”), then, in the event this Contract is terminated and Closing does not occur (other than by reason of Buyer’s default), Seller shall reimburse Buyer for the PIP Fee. Seller and the Franchisor shall terminate the Existing Franchise Agreement, as of the Closing Date, and Buyer shall be solely responsible for all claims and liabilities arising thereunder. Seller and Buyer shall use all commercially reasonable efforts to obtain a release of Seller and any other guarantors as described in Section 5.2(d) above. Buyer agrees to apply for and use reasonable efforts, and Seller shall cooperate with Buyer, to obtain the new franchise agreement, together with the assignment to Buyer of all waivers of any brand standard necessary or appropriate for the operation of the Hotel under the Brand. It shall be a hotel brand owned by condition to Closing for Buyer and Seller that the Franchisor provide the foregoing consent; provided, however, that Buyer shall not be entitled, as a condition to Closing, to require amendments to the Existing Franchise Agreement (or to require a new franchise agreement (the “New Franchise Agreement”), which New ) that contains economic terms more favorable to the owner or franchisee than the economic terms of the Existing Franchise Agreement or that differ in any other material respect from the form of franchise agreement which Buyer and Franchisor have negotiated previously as their standard form of franchise agreement (including to the PIP required thereunder) extent such standard forms are applicable under the circumstances). Buyer shall be in form and substance in responsible for all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior costs related to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that termination of the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status execution of a new franchise agreement, including but not limited to, the negotiations payment of license, application, transfer and similar fees thereunder. Seller shall use best efforts to promptly provide all information required by the New Franchise AgreementFranchisor in connection with each such new franchise agreement, and Seller and Buyer shall diligently pursue obtaining each the same.

Franchise Agreement. The Parties acknowledge Seller has entered into the Existing Franchise Agreements with Hilton Hotels Corp. or an affiliate thereof (the “Franchisor”) governing the use of the Hotels as Homewood Suites by Hilton (the “Brand”). At the Closing, Buyer and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for Franchisor shall enter into a new franchise agreement for each Property, effective as of the Closing Date, replacing the Existing Franchise Agreements and containing terms and conditions acceptable to Buyer. Buyer shall be responsible for the payment and completion of any Franchisor mandated product improvement plan. If Buyer pays the cost for the product improvement plan report (the “PIP Fee”), then, in the event this Contract is terminated and Closing does not occur (other than by reason of Buyer’s default), Seller shall reimburse Buyer for the PIP Fee. Seller and the Franchisor shall terminate the Existing Franchise Agreements, as of the Closing Date, and Buyer shall be solely responsible for all claims and liabilities arising thereunder. Seller and Buyer shall use all commercially reasonable efforts to obtain a release of Seller and any other guarantors as described in Section 5.2(d) above. Buyer agrees to apply for and use reasonable efforts, and Seller shall cooperate with Buyer, to obtain the new franchise agreement, together with the assignment to Buyer of all waivers of any brand standard necessary or appropriate for the operation of the Hotel Hotels under the Brand. It shall be a hotel brand owned by condition to Closing for Buyer and Seller that the Franchisor provide the foregoing consent; provided, however, that Buyer shall not be entitled, as a condition to Closing, to require amendments to the Existing Franchise Agreements (or to require a new franchise agreement (the “New Franchise Agreement”), ) that contains economic terms more favorable to the owner or franchisee than the economic terms of the Existing Franchise Agreements or that differ in any other material respect from the form of franchise agreement which New Franchise Agreement Buyer and Franchisor have negotiated previously as their standard form of franchise agreement (including to the PIP required thereunder) extent such standard forms are applicable under the circumstances). Buyer shall be in form responsible for all costs related to the termination of the Existing Franchise Agreements and substance in all respects acceptable to the execution of a new franchise agreement, including but not limited to, the payment of license, application, transfer and approved by Lessee JVsimilar fees thereunder. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV Seller shall use diligent good faith best efforts to obtain Franchise Approval no later than fifteen (15) days prior to promptly provide all information required by the Closing DateFranchisor in connection with each such new franchise agreement, and Owner JV Seller and Lessee JV Buyer shall provide Hersha Owner and Lessee Owner with written notice immediately upon diligently pursue obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that each the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status of the negotiations of the New Franchise Agreementsame.

Franchise Agreement. The Parties acknowledge and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for a new franchise agreement for the operation of the Hotel under a hotel brand owned by Franchisor (the “New Franchise Agreement”), which New Franchise Agreement (including the PIP required thereunder) shall be in form and substance in all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval It shall be a condition to Hersha Owner’s and Hersha LesseePurchaser’s obligation to close Closing that Franchisor shall have agreed that Purchaser or its designee may assume the Franchise Agreement on the same material economic terms and Owner JVconditions set forth in the Franchise Agreement, which terms and conditions shall include the same franchise fees, termination rights and area of protection set forth in the Franchise Agreement (the “Material Franchise Terms”) or that Franchisor shall have entered into a new hotel franchise agreement with Purchaser or its designee on the form included in Franchisor’s current Uniform Franchise Offering Circular (“UFOC”) containing the Material Franchise Terms. Purchaser expressly acknowledges that Seller has entered into this Agreement on the basis that no termination fees or liquidated damages shall be payable by Seller as a result of the sale of the Property to Purchaser as a result of Purchaser or its designee (at Purchaser’s sole cost and Lessee JV’s obligation expense) either (i) so assuming the Franchise Agreement and obtaining any required consent of Franchisor in connection therewith or (ii) so entering into a new hotel franchise agreement with Franchisor for the Hotel and, in either instance, Seller receiving a written release from Franchisor of any obligations under the Franchise Agreement arising after Closing (including pursuant to closeany guaranties from Seller or any of its Affiliates pursuant to the Franchise Agreement). Owner JV If Closing occurs and Lessee JV Purchaser or its designee has not so assumed the Franchise Agreement and Seller shall not have obtained a release of Seller as set forth above or so entered into a new hotel franchise agreement with Franchisor set forth above, in each case such that no termination fees, liquidated damages or similar fees and penalties are payable by Seller or any of its Affiliates (including Seller or any entity owning a beneficial interest in Seller in its capacity as a guarantor or otherwise) as a result of the sale of the Property to Purchaser, then Purchaser shall be responsible for, and shall save, protect, defend, indemnify and hold Seller (and any Affiliate of Seller) harmless from any such termination fees, liquidated damages or similar fees and penalties (and any other Liabilities that Seller would not bear if the Franchise Agreement was not terminated pursuant to the sale of the Property to Purchaser) in connection with the termination of the Franchise Agreement as of the Closing. Purchaser and Seller shall cooperate with one another and each use diligent good faith its reasonable best efforts to obtain either (x) Franchisor’s written consent to the assumption of the Franchise Approval no later than fifteen Agreement as set forth above as of Closing or (15ii) days Franchisor’s written commitment to enter into a new franchise agreement with Franchisor as set forth above, in each case prior to the Closing Dateexpiration of the Inspection Period, and Owner JV and Lessee JV to provide a copy of such consent or commitment for deposit with Escrow Company (with a conforming copy provided to Seller). The provisions of this Section 4.09 shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that survive the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner Closing or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under termination of this Agreement and the status of the negotiations of the New Franchise Agreement.

Franchise Agreement. The Parties acknowledge Seller has entered into (the “Existing Franchise Agreements”) with Hilton Hotels (the “Franchisor”) governing the use of the Hotels as a Homewood Suites by Hilton (the “Brand”). At the Closing, Buyer and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for a Franchisor shall enter into new franchise agreement agreements, effective as of the Closing Date, replacing the Existing Franchise Agreements and containing terms and conditions acceptable to Buyer. Buyer shall be responsible for the payment and completion of any Franchisor mandated product improvement plan. If Buyer pays the cost for the product improvement plan report (the “PIP Fee”), then, in the event this Contract is terminated and Closing does not occur (other than by reason of Buyer’s default), Seller shall reimburse Buyer for the PIP Fee. Seller and the Franchisor shall terminate the Existing Franchise Agreements as of the Closing Date, and Buyer shall be solely responsible for all claims and liabilities arising thereunder. Seller and Buyer shall use all commercially reasonable efforts to obtain a release of Seller and any other guarantors as described in Section 5.2(d) above. Buyer agrees to apply for and use reasonable efforts, and Seller shall cooperate with Buyer, to obtain the new franchise agreement, together with the assignment to Buyer of all waivers of any brand standard necessary or appropriate for the operation of the Hotel Hotels under the Brand. It shall be a hotel brand owned by condition to Closing for Buyer and Seller that the Franchisor provide the foregoing consent; provided, however, that Buyer shall not be entitled, as a condition to Closing, to require amendments to the Existing Franchise Agreement (or to require a new franchise agreement (the “New Franchise Agreement”), which New ) that contains economic terms more favorable to the owner or franchisee than the economic terms of the Existing Franchise Agreement or that differ in any other material respect from the form of franchise agreement which Buyer and Franchisor have negotiated previously as their standard form of franchise agreement (including to the PIP required thereunder) extent such standard forms are applicable under the circumstances). Buyer shall be in form responsible for all costs related to the termination of the Existing Franchise Agreements and substance in all respects acceptable to the execution of a new franchise agreements, including but not limited to, the payment of license, application, transfer and approved by Lessee JVsimilar fees thereunder. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV Seller shall use diligent good faith best efforts to obtain Franchise Approval no later than fifteen (15) days prior to promptly provide all information required by the Closing DateFranchisor in connection with each such new franchise agreement, and Owner JV Seller and Lessee JV Buyer shall provide Hersha Owner and Lessee Owner with written notice immediately upon diligently pursue obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that each the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status of the negotiations of the New Franchise Agreementsame.

Franchise Agreement. The Parties acknowledge (a) During the Due Diligence Period, Purchaser shall, at its sole cost and agree that the transactions contemplated by this expense, promptly apply for and pursue in good faith a New Franchise Agreement are contingent upon Lessee JV obtaining approval for a new franchise agreement for the operation of with Franchisor to continue to operate the Hotel under as a hotel brand owned by Franchisor (the “New Franchise Agreement”)Holiday Inn, which New Franchise Agreement (including the PIP required thereunder) shall be entered into at or immediately after Closing. Purchaser shall use good faith efforts to submit a completed franchise application (the “Application”) to Franchisor within three (3) Business Days after the Effective Date, and shall thereafter diligently pursue the Application in good faith with Franchisor. As part of the application process, Purchaser shall promptly provide all information and documentation that Franchisor requests (including, without limitation, financial statements, organizational documents, background information regarding direct and indirect owners of Purchaser and other documentation supporting its Application). Without limiting the foregoing, Purchaser shall use prompt, diligent and good faith efforts to cause the Application to be approved by Franchisor. Purchaser shall keep Seller informed of the status of Purchaser’s efforts to cause the Application to be approved by Franchisor. (b) From and after the Effective Date, Purchaser shall work in good faith using commercially reasonable efforts to cause Franchisor to commit in writing, in form and substance in all respects reasonable acceptable to the parties, to at Closing allow Purchaser to receive a license to operate the Hotel as a Holiday Inn after the Closing pursuant to the New Franchise Agreement in the form and approved substance acceptable to Purchaser (in Purchaser’s reasonable discretion) (collectively, the “Franchisor Approval”). Solely in the event that Franchisor has not granted Franchisor Approval by Lessee JVthe expiration of the Due Diligence Period, Purchaser shall have an additional fifteen (15) days after the expiration of the Due Diligence Period (the “Franchisor Approval Period”) solely to allow Purchaser to obtain the Franchisor Approval, provided that Purchaser shall be obligated to (i) deposit the Second Deposit in accordance with Section 2.2(b), and (ii) notify Seller in writing, prior to the expiration of the Due Diligence Period, of its intent to utilize the Franchisor Approval Period. Prior For the avoidance of doubt, the additional Franchisor Approval Period pursuant to this Section 6.3(b) shall not result in any extension of the Closing Date. Upon receipt of the Franchisor Approval during the Franchisor Approval Period, (A) the Franchisor Approval Period shall automatically expire, and (B) Purchaser shall have no further right to terminate this Agreement pursuant to this Section 6.3(b); provided, however, solely in the event that Purchaser has not obtained the Franchisor Approval by 5:00 p.m. (EST) on the last day of the Franchisor Approval Period, Purchaser shall have the right to terminate this Agreement by delivery of written notice to Seller and Escrow Agent, whereupon, (1) this Agreement shall automatically terminate, (2) the Escrow Agent shall immediately release and return the ▇▇▇▇▇▇▇ Money (including any interest accrued thereon) to Purchaser, (3) each party shall pay one-half (1/2) of the expenses of escrow and (d) neither party shall have any further obligation to the other party hereunder, except for the Surviving Obligations. If Purchaser fails to deliver to Seller and Escrow Agent a written notice of termination on or immediately following before the Effective Dateexpiration of the Franchise Approval Period, Lessee JV Purchaser shall submit (x) no longer have any right to terminate this Agreement pursuant to this Section 6.3(b), and (y) be required to proceed with the transaction contemplated hereby. (c) Purchaser shall, at its application sole cost and application fee expense, cause Franchisor to deliver at or prior to Closing a signed counterpart of a voluntary notice of termination and a release of the guarantors under the Franchise Agreement from all liability thereunder (collectively, a “Voluntary Notice of Franchise Termination”) on Franchisor’s customary form with respect to the Hotel, with no cost or expense to Seller or Operating Tenant or any of their affiliates; provided, however, Purchaser shall be deemed to have satisfied this obligation if Franchisor delivers the Voluntary Notice of Franchise Termination in escrow with Escrow Holder subject only to the occurrence of the Closing and the delivery of the executed deed to Franchisor. In no event shall Purchaser be liable for any amounts owed to Franchisor for approval by Seller which accrued and were owing prior to termination of Lessee JV as its new franchisee at the Hotel Franchise Agreement. (“Franchise Approval”d) pursuant Notwithstanding anything to the contrary contained herein: (i) neither the entry into a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV Agreement by Purchaser nor the satisfaction of any conditions set forth in its pursuit of Franchise Approval, at no material cost to Hersha Owner the Franchisor Approval or Hersha Lessee. Franchise Approval any other conditions imposed upon Purchaser by Franchisor shall be a condition to Hersha Owner’s and Hersha LesseePurchaser’s obligation to close and Owner JV’s and Lessee JV’s consummate the transactions contemplated hereunder; (ii) Seller shall have no obligation to close. Owner JV perform and/or pay for any modernization, renovation or other upgrading or PIP work at the Hotel (expressly excluding any such amounts due and Lessee JV owing from Seller to Franchisor); and (iii) Purchaser shall use diligent good faith efforts have no right to obtain extend the Closing Date on account of the Franchise Approval no later than fifteen (15) days prior Agreement, including Purchaser’s failure to enter into a New Franchise Agreement on the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status of the negotiations of the New Franchise Agreement.

Franchise Agreement. The Parties acknowledge and agree that the transactions contemplated by this Agreement are contingent upon Lessee JV obtaining approval for a new franchise agreement for the operation of the Hotel under a hotel brand owned by Franchisor (the “New Franchise Agreement”), which New Franchise Agreement (including the PIP required thereunder) shall be in form and substance in all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a 25 condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise Approval, it shall be a condition to Hersha Owner’s obligation to close that the existing license agreement between Hersha Lessee and Franchisor (the “Existing Franchise Agreement”) shall have been terminated without material cost to Hersha Owner or Hersha Lessee, and Hersha Owner, Hersha Lessee and any guarantors or co-obligors shall have been expressly released from any further obligations or liability thereunder. Hersha Owner and Hersha Lessee shall have the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Agreement and the status of the negotiations of the New Franchise Agreement.

Franchise Agreement. The Parties acknowledge and agree that the transactions contemplated by So long as Purchaser complies with its obligations set forth in this Agreement are contingent upon Lessee JV obtaining approval for a new franchise agreement for the operation of the Hotel under a hotel brand owned by Franchisor (the “New Franchise Agreement”), which New Franchise Agreement (including the PIP required thereunder) shall be in form and substance in all respects acceptable to and approved by Lessee JV. Prior to or immediately following the Effective Date, Lessee JV shall submit its application and application fee to Franchisor for approval of Lessee JV as its new franchisee at the Hotel (“Franchise Approval”) pursuant a New Franchise Agreement. Hersha Owner and Hersha Lessee agree to reasonably cooperate with and assist Lessee JV in its pursuit of Franchise Approval, at no material cost to Hersha Owner or Hersha Lessee. Franchise Approval shall be a condition to Hersha Owner’s and Hersha Lessee’s obligation to close and Owner JV’s and Lessee JV’s obligation to close. Owner JV and Lessee JV shall use diligent good faith efforts to obtain Franchise Approval no later than fifteen (15) days prior to the Closing Date, and Owner JV and Lessee JV shall provide Hersha Owner and Lessee Owner with written notice immediately upon obtaining Franchise Approval. In connection with such Franchise ApprovalSection 4.9, it shall be a condition to Hersha OwnerPurchaser’s obligation to close Closing that Franchisor shall have agreed to Purchaser’s or its designee’s assumption of the existing license agreement between Hersha Lessee Franchise Agreement and Franchisor such amendments to the Franchise Agreement substantially in the same form as set forth in the form amendment attached hereto as Exhibit V (the “Existing Form Assignment and Amendment”). Franchisor’s commitment in writing to enter into the Form Assignment and Amendment at Closing subject to Franchisor’s customary conditions for the assumption of a franchise license agreement in connection with the sale of a hotel to a third party that is not an affiliate of the Seller, in accordance with the preceding sentence, shall be referred to herein as the “Franchisor Approval”; provided that, the Franchisor Approval shall also include Franchisor’s confirmation that the Property Improvement Plan dated April 3, 2014 is in final form and that no other scope changes, capital improvements or other material work is required as part of the first phase of such property improvement plan other than any capital improvements or replacements or additions to any fixtures, furniture or equipment required to comply with Franchisor’s fire-life safety standards. Purchaser shall file its application together with all other documents required under the Franchisor’s Franchise Disclosure Document (the “FDD”) for the assumption of the Franchise Agreement no later than January 6, 2015. Purchaser shall use commercially reasonable efforts to pursue and negotiate in good faith the final Form Assignment and Amendment and Purchaser shall undertake all such acts as may be reasonably necessary (including, but not limited to, the payment of any fees to Franchisor) to satisfy the closing condition set forth in Section 9.1(e) in accordance with the terms of this Section 4.9 on or prior to the Closing Date. At Closing, Purchaser shall assume all obligations of Seller under the Franchise Agreement; provided, however Seller shall remain solely responsible for the payment of any fees or expenses payable under the Franchise Agreement that accrued prior to the Cut Off Time (other than any obligation to pay any liquidated damages or any termination fees resulting from the Purchaser’s failure to assume the Franchise Agreement in accordance with this Agreement). If the Franchisor Approval has not been granted by the expiration of the Inspection Period, Purchaser may elect to extend the Inspection Period for up to an additional ten (10) Business Days, for the sole purpose allowing Purchaser to obtain Franchisor Approval and for no other reason whatsoever, by delivering written notice to Seller of such election (the “Extension Notice”) prior to the expiration of the Inspection Period. If Purchaser does not timely give an Extension Notice as aforesaid, Purchaser shall be deemed to have fully and knowingly waived such right of extension. If Purchaser timely exercises the extension of the Inspection Period set forth herein, then unless Purchaser shall deliver a written notice to Seller certifying that despite Purchaser’s commercially reasonable efforts to obtain the Franchisor Approval and in connection therewith that Purchaser is electing to terminate this Agreement pursuant to Section 4.4 prior to the expiration of the Inspection Period as so extended (the “Franchise Termination Notice”), then Purchaser shall be deemed to have fully and knowingly waived any right to terminate this Agreement pursuant to Section 4.4 or this Section 4.9 and thereafter the Deposit shall be non- refundable to Purchaser except as otherwise expressly provided in this Agreement. Upon receipt by Seller and the Escrow Company of such Franchise Termination Notice, (a) this Agreement shall automatically terminate, (b) the parties shall have been terminated without material no further obligations to or recourse against each other (except for the Surviving Obligations) and (c) the Escrow Company shall within one (1) Business Day of its confirmation of Seller’s receipt of the Franchise Termination Notice return to Purchaser the Deposit. Purchaser expressly acknowledges that (i) Seller has entered into this Agreement on the basis that no termination costs, fees or expenses or liquidated damages shall be payable by Seller as a result of the sale of the Property to Purchaser or as a result of Purchaser or its designee (at Purchaser’s sole cost to Hersha Owner or Hersha Lesseeand expense) assuming the Franchise, and Hersha Owner(ii) Seller must receive a written release from Franchisor, Hersha Lessee on Franchisor’s current standard form, of any obligations of Seller or any of its Affiliates under the Franchise Agreement arising from and after Closing (including pursuant to any guaranties from Seller or any of its Affiliates pursuant to the Franchise Agreement but expressly excluding any amounts due and owing prior to the Closing Date other than any liquidated damages). If Closing occurs and Purchaser or its designee has not so assumed the Franchise Agreement with Franchisor as set forth above (and Seller has not obtained a release of Seller and its Affiliates as set forth above), in each case, such that no termination fees, liquidated damages or similar fees and penalties are payable by Seller or any of its Affiliates (including Seller or any entity owning a beneficial interest in Seller in its capacity as a guarantor or otherwise) as a result of the sale of the Property to Purchaser, then Purchaser shall be responsible for, and shall save, protect, defend, indemnify and hold Seller (and any guarantors or co-obligors shall have been expressly released Affiliate of Seller) harmless from any further obligations such termination fees, liquidated damages or liability thereunder. Hersha Owner similar costs, fees and Hersha Lessee shall have penalties in connection with the right at all times to contact Franchisor in order to confirm that Lessee JV is complying with its obligations under this Franchise Agreement and the status as of the negotiations Closing and any other Liabilities of Seller had the New Franchise Agreementrelease of Seller and its Affiliates as set forth above been obtained. The provisions of this Section 4.9 shall survive the Closing.